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THE INDIAN STAMP ACT

The Indian Stamp Act, 1899 extends to the whole of India e except the state of Jammu & Kashmir. The Stamp Act is a fiscal measure enacted to secure revenue for the state on certain classes of instruments. It is not enacted to arm a litigant with a weapon of technicality to meet the case of his opponent. The stringent provisions of the stamp Act have been enacted with a view to see that the revenue of the State are realized to the utmost extent as provided by law. The primary object to prevent evasion of the revenue is attained by excluding the document from the evidence entirely and by not acting upon it. But this object apart, it may, in other respects, be considered in flavor of the subject.

Once that object is secured according to law, the party staking his claim on the instrument will not be defeated on the ground of the initial defect in the instrument.

Indian Stamp (Delhi Second Amendment) Ordinance, 2001

Promulgated by the Lieutenant Governor of the National Capital territory of Delhi in the Fifty-second Year of the republic of India An ordinance further to amend the Indian Stamp Act, 1899 in its application to the National Capital Territory of Delhi

In exercise of the powers conferred by clause (1) of article 239(B) read with clause (8) of article 239(AA) of the Constitution, the Lieutenant Governor of the National Capital Territory of Delhi is pleased to promulgate the following Ordinance after obtaining the instructions from the President of India in that behalf

It is pertinent to mention that the matter of interpretation of the legislation involving fiscal impositions has been invariably discussed by various High Courts as well as in a number of cases by the Supreme Court of India,. On the one hand there are pronouncements which call upon the courts to adhere to the precise connotations of the words and phrases used in such Statutes while at the same time courts have also contemplated the pragmatic and beneficial construction of the laws. In the former proposition intention of the legislature to collect revenue for the State is highlighted whereas on the latter construction emphasis has been laid on perusing the statutory stipulations in the ordinary parlance.

It is now firmly established that an objection with respect to admissibility of a document on account of insufficiency of stamps or improper cancellation of stamps cannot be entertained after evidence has been adduced and document exhibited on record in such cases where a document has been admitted and placed on record as an exhibit the same cannot be controverter either by the trial court or the appellate court or in revision. However, a mere marking of a document as an exhibit on record does not dispense with the proof thereof

Adjudication as to proper stamp

When any instrument, whether executed or not and whether previously stamped or not, is brought to the Collector, and the p[person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is chargeable, and pays a fee of such amount (not exceeding five rupees and not less than fifty naye paise) as the Collector may in each case direct, the Controller shall determine the duty with which, in his judgment, the instrument is chargeable. For this purpose the Collector may require to be furnished with an abstract of the instrument, and also with such affidavit or other evidence as he may deem necessary to provide that all the facts and circum stances affecting the chargeability of the instrument with duty, or the amount of the duty with which it is chargeable, are fully and truly and truly set forth therein, and may refuse to proceed upon any such application until such abstract and evidence have been furnished accordingly.

Certificate by the collector

When an instrument brought to the Collector under Sec.31 is, in his opinion, one of a description chargeable with duty, and

a) the Collector determines that it is already fully stamped or

b) the duty determined by the Collector under Sec31, or such a sum as, with the duty already paid
in respect of the instrument, is equal to the duty so determined, has been paid

When such instrument is, in his opinion, not chargeable withdrew, the Collector shall certify in manner aforesaid that such instrument is not so chargeable.

Any instrument upon which an endorsement has been made under this section, shall be deemed to be duly stamped or not chargeable with duty, as the case may be, and if chargeable with duty, shall be receivable in evidence or otherwise, and may be acted upon and registered as if it had been originally duly stamped.

Provided that nothing in this section shall authorize the Collector to endorse.

a) any instrument executed or first executed in and brought to him after the expiration of one moth from the date of its execution or first execution, as the case may be

b) any instrument executed or first executed out of and brought to him after the expiration of three months after it has been first received in

c) any instrument chargeable or any bill of exchange or promissory note, when brought to him, after the drawing or execution thereof, on paper not duly stamped.

Examination and impounding of instruments.
Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.

For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in when such instrument was executed or first executed.

For the purposes of this section, in cases of doubt-
May determine what offices shall be deemed to be public offices
May determine who shall be deemed to be persons in charge of public offices

Collector's power to refund penalty paid under Sec38(1)

1. When a copy of an instrument is sent to the Collector under sec38(1), he may, if he thinks fit refund any portion of the penalty in excess of five rupees which has been paid in respect of such instrument.

2. When such instrument has been impounded only because it has been written in contravention of Sec10 or Sec14, the Collector may refund the whole penalty so paid

Collector's power to stamp instruments impounded

1. When the Collector impounds any instrument under Sec33, or receives any instrument sent to him under Sec.38 sub-section 92), not being an instrument chargeable not exceeding ten nayepaise only or a bill of exchange or promissory-not, he shall adopt the following procedure.

a) if he is of opinion that such instrument is duly stamped, or is not chargeable with duty, he shall
certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the
case may be;

b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the proper duty or the amount required to make up the same, together
with a penalty of five rupees, or, if he thinks fit, ten times the amount of the proper duty or of
the deficient portion thereof whether such amount exceeds or falls short of five rupees.

Provides that, when such instrument has been impounded only because it has been written in contravention of Sect.13 or Sec.14, the Collector may, if he thinks fit, remit the whole penalty prescribed by the section.

2. Every certificate under CI.

a) of sub-section (1) shall for the purposes of this Act, be conclusive evidence of the matters
stated therein.

3. Where an instrument has been sent to the Collector under Sec.38, Sub-sec (2), the Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer.

Allowance for spoiled stamps

Subject to such rules as may be made by State Government as to the evidence to be required, or the enquiry to be made, the Collector may, on application made within the period prescribed in Sec.50, and if he is satisfied as the facts, make allowance for impressed stamps spoiled in the cases hereinafter mentioned, namely

a) the stamp on any paper inadvertently and undersigned spoiled, obliterated or by error in writing
or any other means rendered unfit for the purpose intended before any instrument written
thereon is executed by any person'

b) the stamp on any document which is written out wholly or in part, but which is not signed or executed by any party thereto,

c) in the case of bills of exchange, payable otherwise than on demand or promissory notes:-

the stamp on signed by or on behalf of the drawer which has not been accepted or made use of in any manner whatever or delivered out of his hands for any purpose other than by way of tender for acceptance.

Provided that the paper on which any such stamp is impressed, does not bear any signature intended as or for the acceptance of any bill of exchange to be afterwards written thereon

The stamp on any promissory note signed by or on behalf of the maker which has not been made use of in any manner whatever or delivered out of his hands,

The stamp used or intended to be used for such bill of exchange or promissory note signed by, or on behalf of, the drawer thereof, but which from any omission or error has been spoiled or rendered useless, although the same, being a bill of exchange, may have been presented for acceptance or accepted or endorsed, or being a promissory note, may have been delivered to the payee: provided that another completed and duly stamped bill of exchange, or promissory note is produced identical in every particular, except in the correction of such omission or error as aforesaid, with the spoiled bill, or note

Allowance for misused stamps

a) When any person has inadvertently used for an instrument chargeable with duty a stamp of a description other than that prescribed for such instrument by the rules made under this Act, or a stamp of greater value than was necessary or has inadvertently used any stamp for an
instrument not chargeable with any duty or

b) When any stamp used for an instrument has been inadvertently rendered useless under sec 15 owing to such instrument having been written in contravention of the provision of Sec13.

The Collector may, on application made within six months after the date of the instrument, or, if it is not dated, within six months after the execution thereof by the person by whom it was first or alone executed, and upon the instrument, if chargeable with duty, being re-stamped with the proper duty, cancel and allow as spoiled, the stamp so misused or rendered useless.

Jurisdiction of Magistrate

No magistrate or a Magistrate, who powers are not less than those of a Magistrate of second class, shall try any offence under this Act.

Magistrate: This includes every person exercising all or any of the powers of a Magistrate under the Code of Criminal Procedure for the time being in force. What a Magistrate has to adjudicate upon, on a prosecution coming before him, is whether an offence against the Act has been committed, and whether the prosecution has been brought before him by the proper officer.

It should be clearly set out in the conviction, or be discoverable by a fair reading of the conviction or judgment, what the instrument is in respect of which the penalty is inflicted, how he is liable to the penalty, and what the proper stamp-duty was.

Stamp Duty on Instruments

Affidavit: Including an affirmation or declaration in the case of person by law allowed to affirm or declare instead of swearing Duty Rs. 10.00.

Conveyance: Conveyance according to Sec2(1) includes a conveyance on each and every instrument by which property whether moveable or immoveable is transferred inter vivos and which is not otherwise specifically provided for by Sch.1 Duty 8% Transfer Duty 5%.

Gift: Instrument of not being a Settlement, or will , or transfer. Gift is the transfer of certain existing moveable or immovable property made voluntarily and without consideration by one person, called the donor, to another called the donee and accepted by or on behalf of the done. Such acceptance must be made during the lifetime of the donor, and while he is still capable of giving. If the donee dies before acceptance e, the gift is void. For the purpose of making a gift of immoveable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses. The purpose of making a gift of immoveable property, the transfer may be effected either by a registered instrument signed as aforesaid or by delivery. Such delivery may be made in the same way as goods sold may be delivered.

Lease: Since the word "lease" is defined in the Act one is not justified in trying to import any definition or interpretation clause from any other Act. If the document comes within the definition of a "lease" as given in Sec.2(16) of the Stamp Act it is liable to stamp duty under Art. 35 of the Sch.I to that Act. Article 35 would indicate that it is not only a lease which is converted by this Article, but also "any agreement to let". An agreement to let need not be a lease. In order to determine whether in any given case, it is reasonable to infer the existence of an agreement, one has to see if one party has made an offer and the other party has accepted the same. To constitute an agreement, it is necessary that the intention of the parties must be definite and common to both. This can be achieved if the terms and conditions are expressly arrived at or could impliedly tob found.

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Last Updated : 11 Sep,2015