Punjab Government's Revenue Drive from Cooperative Societies Encounters Significant Obstacles
The Punjab Government's ambitious initiative to bolster its finances by approximately Rs 200 crore through the mandatory registration of properties in cooperative housing societies has encountered substantial resistance. This policy, introduced retrospectively, is now under reconsideration following widespread criticism and legal challenges.
Retrospective Notification Sparks Controversy
In a notification dated November 21, 2025, the state government mandated that all apartment owners in cooperative housing societies register their units by paying stamp and collector's duties with retrospective effect. This directive impacted an estimated 50,000 apartment owners across roughly 600 cooperative housing societies, creating immediate discontent among property holders.
The government's decision to apply this requirement retrospectively has not been well-received, with many owners expressing frustration over what they perceive as an unfair financial burden. The notification stipulated that registration must be completed within 90 days of property transfer or possession, with penalties for delays reaching up to 100 percent of outstanding dues.
Legal Challenges Force Government Review
Facing mounting criticism, including a petition filed in the Punjab and Haryana High Court challenging the constitutional validity of the notifications, the government has been compelled to reconsider its stance. A highly placed source revealed that the file regarding the review of this decision is currently before Chief Minister Bhagwant Mann, awaiting his signature to implement amendments.
The proposed amendment would make registration mandatory only for new or prospective buyers, exempting those who have already paid transfer fees to their societies. This shift in policy represents a significant concession to the affected property owners and acknowledges the legal complexities surrounding retrospective application.
Concessions and Amnesty Window Offered
In an attempt to mitigate the backlash, the government introduced a 120-day amnesty window for existing property holders, offering a 50 percent rebate on stamp duty for registrations completed by March 20, 2026. Additional notifications provided graduated stamp duty rates for non-original allottees, with rates increasing from 1 percent to 6 percent depending on registration timing.
However, these concessions have done little to assuage concerns, with many property owners describing the government's approach as resembling that of "a small-time shopkeeper trying to sell off his product at discounted prices." The tight deadlines and legal uncertainties have created anxiety among those awaiting the high court's decision on the matter.
Constitutional and Legal Challenges Mount
The petition filed by the Punjab IAS/PCS Cooperative House Building Society Limited challenges the constitutional validity of notifications S.O. 311 and S.O. 312, arguing they represent "arbitrary and confiscatory levying of stamp duty." The petitioners contend that the notifications:
- Operate retrospectively despite the 2025 amendment Act containing no provision for retrospective application
- Impose stamp duty on current market rates for transactions that occurred years earlier
- Create conflict with the central Registration Act 1908
- Subject cooperative members to double taxation on land where stamp duty was already paid
The high court has acknowledged these concerns, questioning whether the notification should operate prospectively given the amendment's prospective nature.
Government's Revenue Objectives and Defense
The revenue drive comes as the government seeks to mobilize resources in the final year of its tenure, including funding for its promise of Rs 1,000 monthly payments to women. A government official, speaking anonymously, defended the notifications as necessary to "protect society members and improve revenue integrity."
The official argued that mandatory registration would provide legal clarity, secure property ownership, reduce disputes, and close regulatory loopholes in cooperative housing societies. However, this rationale has done little to convince affected property owners who view the retrospective application as fundamentally unfair.
Broader Implications for Property Registration
This controversy highlights the delicate balance between government revenue generation and property owners' rights. The Punjab Government's attempt to streamline property documentation in cooperative societies has revealed significant implementation challenges when applied retrospectively.
As the review process moves forward and legal proceedings continue, the outcome will likely set important precedents for how state governments can regulate property registration in cooperative housing societies while respecting constitutional protections against retrospective taxation.
The situation remains fluid, with property owners anxiously awaiting both the government's amended notification and the high court's final adjudication on the constitutional questions raised by the petitioners.
