- 1 - HC-KAR NC: 2025:KHC:50454-DB WA No. 1860 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF DECEMBER, 2025 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MR. JUSTICE C.M. POONACHA WRIT APPEAL NO. 1860 OF 2025 (GM-ST/RN) BETWEEN: 1. THE STATE OF KARNATAKA REP. BY PRL. SECRETARY TO GOVERNMENT DEPARTMENT OF PWD PORTS INLAND WATER TRANSPORT VIKASA SOUDHA BENGALURU - 560 001 2. THE CHIEF EXECUTIVE ENGINEER NATIONAL HIGHWAYS PWD DEPARTMENT K.R. CIRCLE BENGALURU - 560 001 3. THE EXECUTIVE ENGINEER NATIONAL HIGHWAYS DIVISION CHITRADURGA - 577 501 4. THE DISTRICT REGISTRAR CHITRADURGA DCRM COMPLEX 1ST FLOOR, APMC YARD ROAD CHITRADURGA - 577 501 …APPELLANTS (BY SMT. NAMITHA MAHESH B.G., AGA) Digitally signed by SUMATHY KANNAN Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:50454-DB WA No. 1860 of 2025 AND: 1. M/S. MADHU CONSTRUCTION PWD CLASS I CONTRACTOR NO.9/18, 2ND CROSS GANDHINAGARA BELLARY - 583 101 DISTRICT BALLARI REPRESENTED BY ITS MANAGING PARTNER BASAVARAJ S/O LINGANNA AGED ABOUT 45 YEARS R/AT NO.9/18, 2ND CROSS GANDHINAGARA BELLARY - 583 101 DISTRICT - BELLARY …RESPONDENT THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE FINAL IMPUGNED ORDER DATED 30.05.2024 PASSED BY THE LEARNED SINGLE JUDGE OF THE HON'BLE HIGH COURT IN WRIT PETITION No. 397/2017 AND ETC. THIS APPEAL, COMING ON FOR PRELIMINARY HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC:50454-DB WA No. 1860 of 2025 CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MR. JUSTICE C.M. POONACHA ORAL JUDGMENT (PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE) 1. The appellants / State have filed the present appeal impugning an order dated 30.05.2024 passed by the learned Single Judge in W.P.No.397/2017 [impugned order] captioned 'M/s. Madhu Construction vs. State of Karnataka & Others'. 2. The respondent had filed the said writ petition impugning a notice dated 31.05.2016 [impugned notice] issued by appellant No.3 (Executive Engineer, National Highways Division, Chitradurga), calling upon the respondent to pay a sum of Rs.24,24,142/- as stamp duty. The appellant No.3 claimed that in terms of Section 20 read with Article 32-A of the Schedule to the Karnataka Stamp Act, 1957 [the Act], the respondent was required to pay 8% of stamp duty on the amount paid to the State of Karnataka. 3. The learned Single Judge allowed the said petition and set aside the impugned notice on the ground that the time period for - 4 - HC-KAR NC: 2025:KHC:50454-DB WA No. 1860 of 2025 initiating proceedings under Section 46-A of the Act, had expired. Thus, no proceedings for recovery of stamp duty, which was allegedly short levied, could be initiated. 4. The respondent, a contractor, had furnished his bid for the award of contract for collection of toll fee at Hagari Bridge (NH-63) at KM 358 for the period from 01.04.2005 to 31.03.2008. The respondent's bid was the highest and an agreement dated 31.03.2005 was executed between the Executive Engineer, National Highway Division, Chitradurga and M/s Madhu Constructions. The respondent furnished security amount as required under tender conditions. After the term of the agreement had expired, the respondent sought recovery of his security deposit of a sum of Rs.25,25,260/-. 5. It is stated that at that stage, the appellant no. 3 (Executive Engineer) brought up the issue of short levy of stamp duty on the agreement dated 31.03.2005 executed between the parties, and declined to refund the security deposit as claimed. The Executive Engineer called upon the respondent to pay an amount of Rs.40,50,982/-. - 5 - HC-KAR NC: 2025:KHC:50454-DB WA No. 1860 of 2025 6. Aggrieved by the same, the respondent filed writ petitions, being W.P.No.10694/2013 and W.P.No.11835/2013, assailing the demand notice dated 21.11.2012 whereby the Executive Engineer had demanded a sum of Rs.40,50,982/- on account of short levy of stamp duty. The said writ petitions were disposed of by an order dated 03.07.2015. The learned Single Judge observed that there was no material to indicate that appellants (State) had retained the security deposit on account of the claim for short levy of stamp duty. Accordingly, the Court directed that the respondent's representation be examined by appellant No.3 with a further direction to take a decision in regard to whether the security deposit is refundable. Additionally, the Court also reserved the liberty of the competent authority to initiate proceedings as contemplated in law. 7. On 13 / 19.05.2016, appellant No.4 issued a notice, inter alia stating that the Accountant General, Bengaluru, had raised objection regarding short recovery of stamp fee and accordingly, instructions were issued for recovery of stamp duty in terms of Article 32-A of the Schedule to the Act. On examining the - 6 - HC-KAR NC: 2025:KHC:50454-DB WA No. 1860 of 2025 agreement entered into between the State Government and the respondent, it was found that the respondent had paid a sum of Rs.3,03,03,030/- to the Government and therefore, 8% of the said amount was payable as stamp fee. It was directed that the stamp fee be paid to the office of appellant No.4 and failure to do so would invite action under Section 46 of the Act. 8. Thereafter on 06.06.2016, appellant No.4 issued a notice to the respondent inter alia stating that the prescribed stamp duty was not paid. Therefore, action is required to be taken under Section 67-B and Section 33 of the Act for confiscating the document in question. The respondent was called upon to submit its written statement within a period of fifteen days. 9. The respondent responded to the said notice by letter dated 16.06.2016, inter alia disputing its liability and further contending that the proceedings for recovery of stamp duty were barred, as more than five years had elapsed since execution of the agreement. It is stated that no hearing was conducted pursuant to the said response. The respondent also sent a remainder in August 2016. However, the same did not elicit any response. Thereafter, - 7 - HC-KAR NC: 2025:KHC:50454-DB WA No. 1860 of 2025 the respondent once again furnished its objections to appellant No.4 (District Registrar) on 03.10.2016, inter alia, contending that there was no basis for the said demand. 10. Appellant No.3 issued an order dated 06.12.2016 forfeiting the security deposit furnished by the respondent. It is in the said backdrop, the petitioner filed the writ petition, which was disposed of by the impugned order. 11. It is well-settled that stamp duty is payable on an instrument and not the transaction. In the given facts, it is the case of the appellants / State that stamp duty was payable on the agreement dated 31.03.2005 that was executed between the respondent and Government of Karnataka. 12. Section 46-A of the Act, provides for recovery of stamp duty not levied or short levied. The said section is set out below: "46A. [ Recovery of stamp duty not levied or short levied. (1) Where any instrument chargeable with duty has not been duly stamped, the Chief Controlling Revenue Authority or any other officer authorized by the State Government (hereinafter referred to as the authorized officer) may, within five years from the date of commencement of the Karnataka Stamp (Amendment) Act, 1980 or the date on which the duty - 8 - HC-KAR NC: 2025:KHC:50454-DB WA No. 1860 of 2025 became payable whichever is later, serve notice on the person by whom the duty was payable requiring him to show cause why the proper duty or the amount required to make up the same should not be collected from him: Provided that where the non-payment was by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the provisions of this sub-section shall have effect, as if for the words five years the words ten years were substituted: Provided further that nothing in this sub-section shall apply to instruments executed prior to first day of April, 1972. Explanation. - Where the service of a notice, under this sub- section is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of five years or ten years, as the case may be. (2) The Chief Controlling Revenue Authority or the authorized officer shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of duty due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. (3) Any person aggrieved by an order under sub-section (2), may prefer an appeal before the Karnataka Appellate Tribunal within three months from the date of such order. (4) All duties payable under this section shall be recovered in accordance with provisions of section 46." 13. It is apparent from the plain language of sub-section (1) of Section 46-A of the Act, that the Chief Controlling Revenue Authority or any other Officer authorized by him may, within a - 9 - HC-KAR NC: 2025:KHC:50454-DB WA No. 1860 of 2025 period of five years from the date of which duty became payable, serve a notice on the person from whom the duty was payable, calling upon him to show cause why proper duty or the amount required to make up the same, should not be collected from him. 14. Indisputably, in the present case, no such notice was issued within a period of five years from the date when the duty was allegedly payable, that is, from 31.03.2005 being the date on which the agreement was executed. 15. The question whether any stamp duty was payable on the quantum of consideration paid to the State of Karnataka, is also a contentious one. However, it is not necessary to examine the same in these proceedings, as the respondent has succeeded in on the ground that initiation of proceedings for recovery of allegedly short-levied stamp duty, is barred by time. 16. We find no infirmity with the decision of the learned Single Judge. 17. We also note that the present appeal has been filed after an inordinate delay of 508 days. The application – I.A.No.1/2025 - 10 - HC-KAR NC: 2025:KHC:50454-DB WA No. 1860 of 2025 seeking condonation of delay, does not set out any sufficient cause, which prevented the appellants from filing the present appeal within time. It is stated that the final order dated 30.05.2024 impugned in the present appeal, was communicated by the office of the Advocate General on 02.08.2024 to the Head of the Legal Cell, Department of Public Works, Ports, Inland Water Transport, Bengaluru. But there is no explanation as to why the final order was communicated after a period of two months. Even thereafter, no immediate steps were taken for three months. Later, on 23.10.2024. the Superintending Engineer had sent a letter seeking necessary directions. The letters to the said effect were stated to have been sent to the Chief Executive Engineer as well as to the Secretary to Government, Public Works Department, in November 2024. However, there is no explanation as to what transpired subsequently for over a period of eight months. However, on 30.05.2025, the Government decided to prefer an appeal, on 11.08.2025, the State Government issued an order for preferring an appeal. Thereafter the Government issued another order dated 10.11.2025 to include appellant No.4 as an appellant. The present appeal was filed on 17.11.2025. - 11 - HC-KAR NC: 2025:KHC:50454-DB WA No. 1860 of 2025 18. It is settled law that each and every day's delay is required to be explained by giving sufficient reason. However, in the present case, the appellant have failed to demonstrate that they were prevented by sufficient cause from filing the appeal within the prescribed time. 19. In view of the above, the present appeal is dismissed both on merits as well as on limitation. 20. Pending applications also stand disposed of. Sd/- (VIBHU BAKHRU) CHIEF JUSTICE Sd/- (C.M. POONACHA) JUDGE KS List No.: 2 Sl No.: 19