Background and Facts
In Writ – C No. 13451 of 2025, M/s DLF Home Developers Pvt. Ltd. challenged ongoing stamp duty recovery proceedings before the Collector, Gautam Budh Nagar, seeking a stay or quashing of Stamp Case No. D202211270001599.
The company argued that the matter was already under arbitration and pending before the Delhi court in OMP (Comm) 450/2023 and Arb A (Comm) 45/2023, and hence the stamp authorities should abstain from proceeding.
The petitioner’s main prayer was for:
- A direction to adjourn the stamp case proceedings sine die until the arbitral award or Delhi Court judgment, or
- Quash the stamp proceedings as being without jurisdiction.
Issues Before the Court
- Can a writ be entertained against a show-cause notice in stamp duty matters?
- Do arbitration proceedings prevent stamp authorities from taking action?
- Was the Interplay judgment of the Supreme Court a bar to such proceedings?
Arguments by the Petitioner (DLF)
- Stamp authorities lack jurisdiction while arbitration is ongoing.
- The matter of sufficiency of stamp duty lies within the Arbitrator’s domain.
- Premature determination of duty may prejudice arbitration rights.
- Cited:
- Interplay between Arbitration Agreements and Stamp Act, (2024) 6 SCC 1
- Oryx Fisheries Pvt. Ltd. v. Union of India, (2010) 13 SCC 427
- Arezzo Developers v. State of U.P., MANU/UP/1896/2009
They argued the show-cause notice was premeditated, thus a writ was maintainable.
Respondents’ Submissions
- Stamp duty adjudication is distinct and governed by statute, not subject to arbitration.
- Arbitration had in fact been stayed by Delhi Court (Annexure 16 & 17).
- Cited clauses in the agreement itself admitted seller’s liability to pay stamp duty.
- The Interplay judgment does not bar stamp proceedings post-arbitrator appointment.
- Writ was premature as no final adverse order was passed.
Court’s Analysis
Justice Piyush Agrawal considered both legal and factual submissions and held:
- The Interplay judgment applies to appointment stage objections; here the Arbitrator is already appointed.
- No bar in the SC judgment preventing stamp authorities from acting during arbitration.
- The show-cause notices were not without jurisdiction.
- Mere presence of imputation in notices does not imply predetermination or bias.
- Cited judgments:
- Siemens Ltd. v. State of Maharashtra, (2006) 12 SCC 33
- Union of India v. Vicco Laboratories, (2007) 12 SCC 270
- Oryx Fisheries, Krishna Wax, and Malladi Drugs
Thus, the petition was held to be premature, and dismissed.
Conclusion
This decision reiterates the settled principle that writ petitions against show-cause notices should be entertained only in cases of clear jurisdictional error or procedural abuse. Here, the stamp authorities were found to be acting within their statutory domain, and the mere pendency of arbitration did not oust their jurisdiction.
FAQs:
1. Why was DLF’s writ petition dismissed?
Because it challenged a show-cause notice without proving that the stamp authority acted without jurisdiction.
2. Can stamp duty be assessed during arbitration?
Yes. The court ruled that stamp authorities can initiate proceedings even when arbitration is pending.
3. Does the Interplay judgment stop stamp authorities from acting?
No. It only applies to the appointment stage of arbitration, not when an Arbitrator is already appointed.
4. Is a show-cause notice considered a final order?
No. It’s an opportunity to respond. Courts usually don’t interfere unless there’s clear misuse or lack of authority.
5. What should a party do after receiving a stamp duty notice?
Respond to the notice. If an adverse order is later passed, it can be challenged as per provisions of the Stamp Act.
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