In a crucial ruling, the Allahabad High Court has quashed an order rejecting a stamp duty refund, holding that a retrospective amendment imposing a limitation period cannot extinguish an accrued right. The Division Bench comprising Justice Shekhar B. Saraf and Justice Vipin Chandra Dixit delivered the judgment in Writ-C No. 39180 of 2024 (Seema Padalia & Another v. State of U.P. & Others) on March 6, 2025.
Case Background
The petitioners, represented by Advocates Rahul Sahai and Saumitra Anand, had purchased stamp papers worth ₹4,37,000 in 2015 for executing a tripartite sale and sublease agreement with the New Okhla Industrial Development Authority (NOIDA) and M/s AGC Realty Private Ltd. for a residential unit in “Homes 121,” Sector 121, Noida. However, the agreement remained unregistered due to NOIDA’s restrictions on sale and transfer of flats in the project.
After surrendering their allotment in November 2023, the petitioners applied for a refund of the unused stamp duty on April 27, 2024. However, their application was rejected by the authorities citing Rule 218 of the U.P. Stamp (5th Amendment) Rules, 2021, which imposes an eight-year limitation period on such claims.
Court’s Observations & Ruling
The respondents, represented by the C.S.C. (Chief Standing Counsel) and Advocate Kaushalendra Nath Singh, argued that the 2021 amendment governed the refund claim since the petitioners applied after its enactment. However, the Court disagreed, relying on the Supreme Court’s judgment in Harshit Harish Jain & Anr. v. State of Maharashtra & Ors. (2025 Law Suit SC 105).
The Supreme Court had held that limitation amendments cannot retrospectively curtail an accrued right and that equitable principles must guide fiscal decisions to prevent unjust enrichment by the State.
Applying this precedent, the High Court found that:
The petitioners purchased the stamp papers in 2015, well before the 2021 amendment.
Their right to seek a refund accrued under the unamended rules, and the new limitation could not retrospectively bar their claim.
The impugned order rejected the refund purely on technical grounds, without considering the Supreme Court’s settled law.
Accordingly, the Court quashed the rejection order and directed the authorities to reconsider the refund application in light of the Supreme Court’s ruling, within three months.
