The Bombay High Court is set to decide the issue of whether separate stamp duty is payable on the instruments executed during redevelopment projects in Maharashtra with individual members, like on permanent alternate accommodation agreement (PAAA) [Adityaraj Builders v. State of Maharashtra and Ors.].
A Bench of Justices GS Patel and Madhav Jamdar framed the issue during the hearing of three writ petitions filed by Adityaraj Builders challenging the validity of two circulars dated June 23, 2015 and March 30, 2017 by the Inspector General of Registration and Controller of Stamps, Maharashtra State.
The circulars pertained to the payment of stamp duty on documents executed after the redevelopment of a property of a registered housing society is complete.
The circulars clarified about the stamp duty to be charged while giving premises in the new building for redevelopment project.
It stated that if a development agreement has been entered into between the society and the developer, the stamp duty is to be charged as per provisions of the Maharashtra Stamp Act.
Additionally, if there is a separate document transferring units to the individual members, those will be treated as independent documents and hence the stamp duty for the area approved for the society is to be charged against the construction cost.
The petitioner builder approached the Court as they had an estimated stamp duty liability of ₹27 lakh per petition on the PAAA and were required to submit at least 50 per cent of the amount with the department.
On the undertaking of depositing 50 per cent of the amount and to pay the balance based on the outcome of the petitions, the Court permitted the petitioner to proceed with the registration of PAAAs.
Since the verdict in these petitions was going to affect a large number of redevelopment projects across the State especially in Mumbai, as it pertained to stamp duty correctly payable on instruments in such projects, the Bench appointed advocate Samit Shukla, partner at law firm DSK Legal, to assist the Court as Amicus Curiae.
Considering the fact that issue is likely to have a significant impact, the Court listed this matter with urgent priority for February 3, 2022, for final disposal.