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Tax & Customs LawSupreme Court of India

Dr. Poornima Advani v. Government of NCT

Civil Appeal · 2025 INSC 262Decided 18 Feb 2025
C.A. No.-002643-002643 - 2025 (arising out of S.L.P.(C) No. 594 of 2020)
Justice J.B. Pardiwala · Justice R. Mahadevan

Background

The appellants, a husband and wife, bought an e-stamp paper worth Rs. 28,10,000 in July 2016 to purchase a property in Delhi, but the sale deed's execution was delayed because their loan had not closed in time. The broker holding the e-stamp paper then reported it misplaced, forcing the couple to buy a fresh e-stamp paper and complete the sale, while also filing a police complaint and public notices about the lost one. The Collector of Stamps rejected their request to refund the duty paid on the misplaced (now unusable) e-stamp paper, and the Delhi High Court's Single Judge and Division Bench gave only partial relief, ordering the principal refunded but denying interest.

Decision Breakdown

The Supreme Court held that once petitioners proved (through the police complaint, newspaper notices, and indemnity bond) that the original e-stamp paper was lost and could not be misused, the State had no constitutional authority under Article 265 to keep money collected without legal basis, so retaining the stamp duty was impermissible. Relying on the doctrine of restitution and precedent that money wrongfully retained by the State must carry interest, the Court found the High Court erred in denying interest merely because the refund wasn't explicitly provided for in the Stamp Act. It calculated interest at 8% (later reduced for a period) on the amounts through various stages, totaling Rs. 4,35,968.58, and directed payment within two months.

Lesson Learnt

When a government authority holds money it had no legal right to collect or retain (such as stamp duty on a lost, unused e-stamp paper), citizens are entitled not just to a refund of the principal but to interest for the entire period of wrongful retention: the absence of an express refund provision in the statute doesn't bar this constitutional right.

Dr. Poornima Advani v. Government of NCT – Legal Case Shots | LegalAware