Division Bench Upholds Limitation Period Under Section 33-A of Indian Stamp Act, 1899, Dismissing Revenue Department's Appeal
In a significant judgment delivered on September 9, 2026, the Division Bench of the Madras High Court, comprising Justices Abdul Quddhose and R. Rajesh Vivekananthan, upheld the limitation period prescribed under the Indian Stamp Act, 1899, for demanding deficit stamp duty. The court dismissed the writ appeal filed by the Inspector General of Registration and others against the respondent N. Natarajan, affirming that any demand for deficit stamp duty beyond three years from the date of registration of the instrument is barred by limitation as per the second proviso to Section 33-A of the Indian Stamp Act.
The dispute arose when the Registration Department issued a demand notice on June 26, 2025, claiming deficit stamp duty on a partition deed registered on September 26, 2014. The respondent challenged this demand on the ground that it was made after the three-year limitation period stipulated by the second proviso to Section 33-A of the Indian Stamp Act.
The appellants contended that since the proceedings to recover the deficit stamp duty were initiated within three years by issuing a notice, the final demand made subsequently should not be considered barred by limitation. However, the court rejected this argument, holding that the limitation period for making the demand strictly begins from the date of registration of the instrument, not from the date when proceedings are initiated.
The court referred to the decision of the Division Bench in the case of The Chief Controlling Revenue Authority and Inspector General of Registration vs. Hiranandani Township Private Limited (dated February 5, 2024), which clarified that the prohibition under the second proviso to Section 33-A is mandatory and not merely directory. The judgment emphasized that no inquiry or demand for deficit stamp duty can be commenced after the expiry of three years from the date of registration of the instrument.
Applying this principle, the court found the demand made on June 26, 2025, was beyond the three-year limitation period from the registration date of September 26, 2014. Consequently, the demand was held to be hopelessly barred by limitation.
The judgment reaffirms the importance of strict compliance with limitation periods prescribed in revenue recovery laws and protects parties from belated demands for deficit stamp duty long after the registration of instruments. It also provides clarity on the interpretation of Section 33-A of the Indian Stamp Act, ensuring that revenue authorities act within the prescribed timeframe.
The writ appeal was dismissed, confirming the order of the learned Single Judge who had earlier allowed the writ petition filed by the respondent. There was no order as to costs.
Bottom Line:
Indian Stamp Act, 1899 - Demand for deficit stamp duty - Demand must be made within three years from the date of registration of the instrument as per the second proviso to Section 33-A - Demand made beyond the limitation period is barred.
Statutory provision(s): Indian Stamp Act, 1899 Section 33-A (Second Proviso)
Inspector General of Registration v. N.Natarajan, (Madras)(DB) : Law Finder Doc Id # 2981478
