Rahul’s

a blue print of success

NOTES ON INDIAN STAMP ACT,1899

Objectives of the Indian Stamp Act, 1899
The Indian Stamp Act, 1899, is a fiscal legislation designed to regulate the stamping
of instruments that record transactions. The primary objectives of the Act are:
1. Revenue Generation for the State:
o The primary aim of the Stamp Act is to serve as a source of revenue for the
government by imposing duties on certain instruments such as deeds,
agreements, and promissory notes.
o The taxation ensures a steady stream of income for state finances without
creating a direct tax burden on individuals.
2. Authentication of Documents:
o Stamps act as evidence that the required stamp duty has been paid,
validating the document as legally enforceable.
o Proper stamping helps authenticate the genuineness of documents, thereby
reducing the scope for fraudulent transactions.
3. Facilitation of Legal Enforceability:
o Instruments that are adequately stamped are admissible as evidence in
courts. This ensures that parties comply with the legal requirements before
presenting documents in disputes or claims.
4. Uniformity in Taxation:
o The Act provides a consistent framework for the application of stamp duties
across various transactions, creating uniformity in fiscal policy and legal
practices.
o It prevents discrepancies in tax collection and ensures all parties are treated
equitably under the law.
5. Deterrence Against Evasion:
o By mandating stamping and penalizing non-compliance, the Act discourages
tax evasion and ensures compliance with revenue laws.
o It imposes fines and penalties for the use of unstamped or insufficiently
stamped instruments, thus deterring fraudulent activities.
6. Encouragement of Proper Documentation:
o The Act promotes the habit of executing formal documents for transactions,
ensuring proper record-keeping and accountability in business and personal
dealings.

1
7. Legal Safeguards:
o Properly stamped documents safeguard the interests of parties involved by
ensuring that agreements and transactions are recorded and legally
recognized.
o It provides clarity on obligations, rights, and liabilities, thus reducing legal
disputes.
8. Adaptation to Modern Needs:
o With amendments, the Act has expanded its scope to cover newer forms of
transactions, such as those involving depositories and digital records,
ensuring it remains relevant in modern economic contexts.
These objectives collectively ensure fiscal efficiency, legal clarity, and the integrity of
commercial and private transactions in India.
Features of the Indian Stamp Act, 1899
1. Scope and Applicability:
o The Act applies across India.
o It governs the imposition of stamp duties on various instruments executed in
India.
2. Objective:
o It aims to generate revenue for the government by taxing certain transactions
documented through instruments.
3. Instruments Chargeable to Duty:
o Documents mentioned in Schedule I of the Act, including conveyances,
leases, mortgages, powers of attorney, and agreements. [Schedule I-A, as
applicable to Himachal Pradesh].
o Certain exemptions are provided, such as instruments executed by or on
behalf of the government.
4. Types of Stamps:
o Adhesive Stamps: These are affixed to documents.
o Impressed Stamps: Instruments written on paper with pre-impressed
stamps.
5. Ad Valorem and Fixed Duties:
o The Act imposes two types of duties:
▪ Ad Valorem Duty: Based on the value of the transaction.
▪ Fixed Duty: A specific amount regardless of transaction value.

2
6. Time of Stamping:
o Instruments executed in India must be stamped before or at the time of
execution.
o Instruments (except Bill of exchange and promissory note) executed outside
India must be stamped within three months of being received in India.
o Bill of exchange and promissory note, executed outside India, to be stamped
before presentation.
7. Penalties for Non-Compliance:
o Instruments not duly stamped are inadmissible in evidence and subject to
penalties.
o Penalties may include fines or additional duties.
8. Determination and Adjudication:
o Authorities like Collectors are empowered to adjudicate the sufficiency of
stamps.
o Instruments can be impounded if found unstamped or insufficiently stamped.
9. Exemptions and Reductions:
o The Act allows the government to exempt certain classes of instruments or
reduce duties via notifications.
10. Offences and Penalties:
o Failure to cancel adhesive stamps or non-compliance with provisions like
payment of duties may attract penalties under Chapter VII.
11. Modes of Payment:
o Duties can be paid through physical stamps, e-stamps, or other prescribed
methods.
12. Special Provisions for Modern Transactions:
o The Act has been amended to include provisions for transactions involving
electronic records and securities (e.g., depositories and dematerialization).
13. Strategic and Policy-Driven Exemptions:
o Certain instruments related to strategic disinvestments, securitization, and
warehousing receipts are exempted.
14. Allowances for Unused Stamps:
o Provisions for refunds or allowances exist for spoiled, misused, or unused
stamps.
15. Jurisdiction and Adjudication:
o Disputes regarding the interpretation of stamp laws can be escalated to high
courts or the Supreme Court for resolution.

3
Introduction
The Indian Stamp Act, 1899 is a fiscal statute enacted to consolidate and amend
laws relating to stamp duties on instruments in India. It aims to generate revenue for
the state through the imposition of stamp duties on various instruments, which
includes documents such as agreements, receipts, deeds and other negotiable
instruments.
Key Features and Provisions
1. Preliminary (Chapter I)
Short Title and Extent: The Act applies to the whole of India. It came into
force on 1st July 1899.
Definitions: Includes definitions of key terms such as "instrument," "bill of
exchange," "mortgage-deed," "lease," and others, to determine the scope and
applicability.
2. Instruments Chargeable with Duty (Chapter II)
Chargeability (Section 3): All instruments listed in Schedule I are
chargeable with duties as specified. [Include Schedule I-A, for the state of
Himachal Pradesh].
Liability on Multiple Instruments (Section 4): When multiple instruments
are used for a transaction (e.g., sale or mortgage), only the principal
instrument attracts full duty; others attract nominal duty.
Valuation: Duty is based on the value of the subject matter, consideration, or
market value, depending on the nature of the transaction.
Stamp Duties: Key Instruments
1. Agreements and Contracts
Agreements creating a right or liability are chargeable with duty.
Instruments related to assignment or transfer of rights often attract
exemptions, particularly in modern scenarios involving financial instruments.
2. Conveyance
Definition: Includes sale deeds and other instruments transferring property.
Valuation: Stamp duty is calculated based on consideration or market value
at the time of execution.
3. Mortgages and Debentures
Mortgage Deeds: Defined broadly to include security over movable and
immovable properties.
Debentures: Instruments issued by companies to raise loans attract duties,
though exemptions exist under special circumstances like stock market
transactions.

4
Exemptions
Several instruments are exempted from duties under specified circumstances:
1. Transactions in Special Economic Zones (Section 3).
2. Negotiable Warehouse Receipts (Section 8-C).
3. Agreements for Financial Asset Transfers (Section 8-F).
4. Government Transactions: Transfers by or in favour of the government may be
exempt.
Compliance and Penalties (Chapter IV)
1. Admissibility in Evidence
Instruments not duly stamped are inadmissible in court unless the required
duty and penalty are paid.
2. Penalties
Executing unstamped or improperly stamped instruments attracts penalties
under Section 62, including fines and potential prosecution.
3. Rectification
Instruments can be impounded and duly stamped retrospectively, subject to
penalties and adjudication.
Adjudication and Recovery (Chapters III & VI)
Adjudication (Section 31): The Collector determines the proper duty payable
on an instrument.
Recovery of Duties (Section 48): The government has mechanisms to
recover unpaid duties, including penalties.
Amendments
The Act has evolved to include provisions for financial instruments and digital
transactions:
1. Stock Exchanges and Depositories (Sections 9-A & 9-B): Duties are
collected through exchanges or depositories for securities transactions.
2. Electronic Instruments: Recognized under the Information Technology
Act, 2000, electronic records and e-stamping are part of modern compliance
mechanisms.
Case Law Insights
1. Revenue Protection: The Act primarily aims to secure state revenue but
does not empower parties to avoid obligations on technicalities (Chiranji Lal v.
Hari Das).
2. Nature of Instruments: Courts look at the substance of an instrument rather
than its form to determine its liability under the Act (Kothuri Venkata Subba
Rao v. Registrar).

5
Relevance and Importance
The Indian Stamp Act remains integral to:
Legal documentation compliance.
Revenue generation for states.
Legal enforceability of documents in judicial proceedings.
The Indian Stamp Act, 1899, though over a century old, remains vital in regulating
fiscal measures on instruments, balancing between state revenue and legal
formalities. Continuous amendments have kept it relevant, particularly in modern
financial and electronic transactions. Compliance ensures both enforceability and
avoidance of penalties in legal and business contexts.
Amendments
The Indian Stamp Act of 1899 serves as the foundational legislation governing stamp
duties on instruments in India. Over the years, Himachal Pradesh has enacted
several amendments to tailor the Act to its specific requirements. Following is a
comprehensive overview of these amendments:
1. The Indian Stamp (Himachal Pradesh Amendment) Act, 1952
Objective: To modify the Indian Stamp Act, 1899, for its application within
Himachal Pradesh.
Key Amendments:
o Section 2: Amended to include references to Schedule I-A, introducing a
new schedule specific to Himachal Pradesh.
o Section 3: Introduced a proviso specifying that instruments listed in
Schedule I-A, executed within or outside Himachal Pradesh but relating to
properties or matters within the state, are chargeable with duties as per
Schedule I-A.
o Section 6-A: Added to address the payment of stamp duty on copies,
counterparts, or duplicates when the principal instrument hasn't been duly
stamped in accordance with the charges in the state of Himachal Pradesh.
o Schedule I-A: Introduced a new schedule detailing stamp duties
applicable to various instruments in Himachal Pradesh.
2. The Indian Stamp (Himachal Pradesh Amendment) Act, 1988
Objective: To further amend the Indian Stamp Act, 1899, enhancing the
accuracy of property valuations for stamp duty purposes.
Key Amendments:
o Section 27: Revised to mandate that instruments set forth not only the
consideration but also the market value of the property.

6
 o Section 47-A: Introduced to empower the Registering Officer to refer
instruments to the Collector if the market value or consideration appears
undervalued, ensuring proper stamp duty is levied.
3. The Indian Stamp (Himachal Pradesh Amendment) Act, 1992
Objective: To update the stamp duty applicable to partition instruments.
Key Amendment:
o Article 45 of Schedule I-A: Revised to stipulate that the stamp duty for
partition instruments is equivalent to that of a bond (No. 15) for the value
of the separated share(s) of the property.

4. The Indian Stamp (Himachal Pradesh Amendment) Act, 2023

Objective: To revise stamp duty rates for various instruments to reflect
current economic conditions.
Key Amendments:

o Article 3: Increased the stamp duty from ₹100 to ₹1,000.

o Article 4: Raised the duty from ₹10 to ₹20.

o Article 5: Enhanced the duty from ₹50 to ₹100.

o Article 48: Adjusted clauses (a), (b), and (c) to increase duties to ₹1,000,
₹1,500, and ₹2,000, respectively.

o Article 58 (Clause A): Modified to set the duty at a minimum of ₹2,000

and a maximum of ₹5,000.
5. The Indian Stamp (Himachal Pradesh Second Amendment) Act, 2023
Objective: To address stamp duties concerning corporate restructuring and
mining leases.

Key Amendments:
o Article 23(B): Inserted to cover conveyances in the nature of
amalgamation, merger, or demerger of companies under sections 232 and
234 of the Companies Act, 2013, or section 44A of the Banking Regulation
Act, 1949.
o Article 35 (Clause c): Introduced a formula for calculating stamp duty on
mining lease deeds.
These amendments reflect Himachal Pradesh's efforts to adapt the Indian Stamp
Act, 1899, to its unique administrative and economic context, ensuring effective
revenue collection and legal clarity within the state.

7
 CHAPTER I
PRELIMINARY
Chapter I of the Indian Stamp Act, 1899 serves as the introductory framework for the
legislation. It sets out the scope, definitions, and foundational principles necessary to
interpret and apply the Act. This chapter is critical for understanding the terms and
jurisdictional application of the Stamp Act.
1. Short Title, Extent, and Commencement (Section 1)
Short Title: The Act is officially titled as "The Indian Stamp Act, 1899."
Extent: It extends across the whole of India.
Commencement: The Act came into force on 1st July 1899.
2. Definitions (Section 2)
Definitions are integral to Chapter I as they provide clarity on terms frequently used
throughout the Act. Significant terms include:
"Bill of Exchange":
o Defined as per the Negotiable Instruments Act, 1881.
o Includes instruments entitling or purporting to entitle any person to payment or
to draw upon another person.
"Bond":
o Includes instruments obliging payment under conditions, such as performance
or non-performance of a specified act.
"Chargeable":
o Instruments that are liable to stamp duty under the law.
"Conveyance":
o Refers to instruments transferring property inter vivos (between living
persons) unless otherwise specified.
"Duly Stamped":
o An instrument bearing stamps of the proper amount and canceled
appropriately under the law.
"Instrument":
o Includes any document creating, transferring, or extinguishing a right or
liability. This term is comprehensive and extends to electronic records under
the IT Act, 2000.
"Lease":
o Includes patta, kabuliyat, or contracts granting rights over immovable property
for consideration.
o A patta is an instrument given by the Collector of District or any other receiver
of the revenue, to the cultivator, specifying the condition or conditions upon

8
 which the lands are to be held and the value or proportion of the produce to
be paid therefor.
o A Kabuliyat is executed by the lessee, accepting the terms of the lease and
undertaking to abide by them. Although, it is not a lease under Section 105 of
the Transfer of Property Act, it is expressly included in the definition for the
purposes of the Stamp Act.
o Toll is a tax paid for some liberty or privilege, such as for passage over a
bridge, ferry, along a highway or for the sale of articles in a market or fair or
the like. It does not include 'octroi' or 'chungi'.
"Settlement":
o Non-testamentary dispositions of property, including agreements for religious
or charitable purposes.
"Stamp":
o Encompasses impressed or adhesive marks authorized for indicating
payment of duty.
"Marketable Security":
o Securities tradable on recognized stock exchanges.
Key Judicial Observations on Definitions
Nature of Instruments: The nomenclature or language used in an instrument
is not decisive. Courts focus on the substance and the intended legal effect of
the document "Conveyance" Definition: Broadly includes sales, leases, and
releases that effectively transfer property rights (State of Uttaranchal v.
Khurana Bros).
"Settlement" and Trust Deeds: Trust deeds may also fall within the scope of
settlement deeds if they meet definitional criteria (S.N. Mathur v. Board of
Revenue).
Significance of Definitions
These definitions are pivotal for interpreting instruments subject to stamp duty
under the Act.
They assist in determining the appropriate stamp duty and the legality of
instruments used in commercial and property transactions.
Legislative Purpose
The Indian Stamp Act, 1899 is primarily a fiscal statute designed to:
Raise revenue for the state by imposing duties on certain instruments.
Provide guidelines for the execution, stamping, and registration of documents.
Penalise non-compliance to ensure uniformity and adherence to statutory
requirements.

9
 CHAPTER II
STAMP DUTY
Introduction to Stamp-Duties
Chapter II of the Indian Stamp Act, 1899, elaborates on the applicability, collection,
and administration of stamp duties, which serve as a critical source of revenue for
the government. The provisions delineate the liability of various instruments to stamp
duty, the modes of stamping, valuation principles, and exemptions. This chapter is
structured into several parts, encompassing the liability to duty, the mode of using
stamps, the timing of stamping, valuations for duty, and the persons responsible for
payment.
A. Instruments Liable to Duty
1. Chargeability (Section 3): Instruments mentioned in Schedule I are subject
to stamp duty. The liability arises based on the nature of the transaction and
its execution in or relation to India. Specific exemptions include instruments
executed in favor of or by the Government, among others.
2. Multiple Instruments in a Single Transaction (Section 4): In cases
involving multiple instruments for a single transaction, only the principal
instrument is charged with the full duty. Other instruments attract nominal
duties, ensuring fairness in taxation.
3. Distinct Matters and Multiple Descriptions (Sections 5 and 6):
Instruments covering multiple distinct matters or fitting several descriptions in
Schedule I are charged at the highest applicable duty rate.
B. Exemptions and Special Categories
1. Exemptions (Sections 8A-8G): Certain categories of transactions are
exempt from stamp duty:
o Transactions involving securities in depositories.
o Instruments related to corporatization and demutualization schemes.
o Strategic sales or disinvestments of immovable property by government
entities.
2. Power to Remit Duty (Section 9): The government retains the power to
reduce or remit stamp duties, either prospectively or retrospectively, for
specific categories of instruments or persons.
C. Mode of Using Stamps
1. Payment of Duties (Section 10): Duties are payable through adhesive or
impressed stamps, depending on the nature of the instrument. Rules also
regulate the size and number of stamps used.
2. Cancellation of Adhesive Stamps (Section 12): To prevent reuse, adhesive
stamps must be cancelled by marking or signing across them. Uncanceled
adhesive stamps render the instrument unstamped.

10
 3. Restrictions on Use of Stamped Paper (Section 14): Instruments written on
already-used stamped paper are deemed unstamped unless specific
exceptions apply.

D. Timing and Valuation for Duty

1. Timing of Stamping (Sections 17-19):

o Instruments executed in India must be stamped before or at the time of

execution.

o Instruments executed outside India may be stamped within three months

of receipt in India.

2. Valuation Rules (Sections 20-26):

o Conversion of foreign currency values is governed by the prevailing

exchange rate on the date of execution.

o Ad valorem duties are based on the market value of securities, stock, or

other subject matters.

o For instruments with indeterminate subject matter values, specific

valuation rules ensure appropriate duty calculation.

E. Payment and Liability

1. Persons Liable (Section 29): The parties to an instrument bear the primary
responsibility for payment of the stamp duty. Specific rules assign this liability
based on the type of instrument.

2. Obligations for Receipts (Section 30): The obligation to provide a stamped

receipt arises in certain financial transactions, ensuring compliance with
statutory requirements.

Key Judicial Interpretations

1. Nature of the Instrument: The nomenclature of an instrument is secondary

to its substantive content in determining stamp duty applicability. For instance,
a lease may be deemed validly executed even when framed under another
title.

2. Exemptions and Scope: Judicial precedents emphasize a purposive

interpretation to balance revenue interests with transactional convenience,
particularly in cases involving exemptions.

Chapter II forms the backbone of the Indian Stamp Act by defining the scope of
instruments subject to duty, their valuation, and payment procedures. It ensures
robust regulatory oversight while incorporating mechanisms for exemptions and
flexibility. This chapter is vital for understanding the fiscal framework of transactions
in India.

11
 CHAPTER III
ADJUDICATION AS TO STAMPS
Chapter III of the Indian Stamp Act, 1899, titled "Adjudication as to Stamps",
provides a framework for determining the adequacy of stamp duty paid on an
instrument. This chapter ensures that instruments are properly stamped to avoid
disputes, enhance legal enforceability, and prevent revenue loss to the government.
Section 31: Adjudication as to Proper Stamp
This section allows individuals to seek a formal determination of the stamp duty
payable on an instrument. An instrument may be submitted to the Collector for
adjudication if there is ambiguity about the stamp duty applicable. The section
outlines that:
The person making the application must provide a full and true statement of facts
and circumstances surrounding the execution of the instrument.
The Collector, upon receiving the application, determines the proper stamp duty
payable and informs the applicant accordingly.
This provision is particularly helpful in avoiding penalties or legal challenges due to
under-stamping.
Section 32: Certificate by Collector
Upon adjudication, if the Collector determines the instrument has been adequately
stamped, they issue a certificate stating so. The certificate affirms that no further
stamp duty is required, provided the circumstances disclosed are accurate. This
certificate:
Acts as conclusive proof of the instrument's proper stamping.
Can be used in legal proceedings as evidence of compliance with the Act.

Key Features of Chapter III

1. Preventive Mechanism: By enabling individuals to approach the Collector for
adjudication, the chapter serves as a preventive mechanism against future
disputes over stamp duty.
2. Clarity in Transactions: It ensures clarity in financial and legal transactions by
confirming the adequacy of stamps on instruments.
3. Protection Against Penalties: Instruments adjudicated under this chapter are
shielded from penalties for inadequate stamping, provided no material facts were
concealed.

12
Practical Applications
Property Transactions: In cases of high-value property transfers, where
ambiguity about stamp duty often arises, adjudication ensures compliance.
Commercial Agreements: Businesses and corporations often utilize this
provision to validate their agreements and avoid penalties.
Legal Certainty: Courts rely on adjudicated certificates to establish whether
instruments meet the requirements of the Stamp Act.
This chapter plays a critical role in facilitating revenue collection, minimizing
litigation, and fostering trust in contractual transactions. It is a testament to the Act’s
objective of combining fiscal responsibility with administrative fairness.

CHAPTER IV
INSTRUMENTS NOT DULY STAMPED
Chapter IV of the Indian Stamp Act, 1899 deals with the consequences, legal
treatment, and provisions related to instruments that are not duly stamped. It
emphasizes compliance with the stamping requirements and provides mechanisms
for impounding, adjudication, and penalties for such instruments.
1. Examination and Impounding of Instruments (Section 33):
Authority to Inspect: The person responsible for an instrument's execution
or the authorised officer has the power to examine whether the instrument is
properly stamped.
Impounding: If found not duly stamped, the officer must impound the
instrument, meaning to retain it until the duty and penalty are paid.
2. Special Provisions for Receipts (Section 34):
Certain unstamped receipts (below specific monetary thresholds) are
exempted from penal provisions if they meet certain conditions.
3. Admissibility in Evidence (Section 35):
Instruments not duly stamped are inadmissible in evidence for legal
proceedings.
They cannot be acted upon unless the required duty, along with a prescribed
penalty, is paid.
4. Admission Not to be Questioned (Section 36):
Once an improperly stamped instrument has been admitted as evidence (after
penalty and duty payment), its validity cannot be questioned during the same
proceeding.

13
5. Improperly Stamped Instruments (Section 37):
If an improperly stamped instrument has been inadvertently admitted, it can
still be acted upon subject to penalties and proper adjudication.
6. Dealing with Impounded Instruments (Section 38):
Collector's Role: The impounded document is sent to the Collector for
adjudication.
Duty and Penalty: The Collector assesses the proper stamp duty and levies
a penalty (generally upto ten times the unpaid duty).

7. Refund of Penalty (Section 39):

In certain circumstances, the Collector has the power to refund penalties paid
under Section 38(1).
8. Stamping by the Collector (Section 40):
The Collector can validate and affix the necessary stamp on instruments,
provided the unpaid duty and penalties are paid.
9. Accidental Improper Stamping (Section 41):
If the improper stamping was unintentional or due to clerical errors, leniency
may apply.
10. Endorsement of Duty Paid (Section 42):
When duty is paid under Sections 35, 40, or 41, the instrument must be
endorsed, indicating compliance with stamping requirements.
11. Prosecution for Offenses (Section 43):
Individuals who execute or attempt to use instruments that evade proper
stamping may be subject to prosecution.
12. Recovery Mechanisms (Section 44-48):
Provisions for recovering the duty and penalties paid by individuals on behalf
of others under specified conditions.
Practical Implications:
1. Immovable Property Transactions: Instruments such as sale deeds and
lease agreements are often impounded for not being properly stamped.
Courts strictly enforce the inadmissibility clause under Section 35.

2. Corporate Transactions: Share transfers and security agreements must

comply with stamping requirements to avoid penalties.
3. Leniency in Accidental Cases: Sections 39 and 41 offer relief where non-
compliance is due to inadvertence.

14
 CHAPTER V
ALLOWANCES FOR STAMPS IN CERTAIN CASES

The Indian Stamp Act, 1899, Chapter V, outlines provisions related to allowances for
stamps in specific scenarios where the stamps may have been spoiled, misused, or
otherwise rendered unsuitable for their intended use. The provisions are designed to
ensure that taxpayers do not bear unnecessary burdens while maintaining the fiscal
integrity of the stamp duty system.
Section 49: Allowance for Spoiled Stamps
This section allows for refunds or allowances in cases where stamps have been
inadvertently spoiled or rendered unfit for use. The spoiled stamps must meet criteria
such as having never been used or being rendered void due to an act or
circumstance beyond the purchaser’s control. The provision is meant to protect
users from incurring losses from unused stamps.
Section 50: Application for Relief Under Section 49
Section 50 details the procedure for claiming relief for spoiled stamps. It mandates
that the application must be made within a prescribed period and accompanied by
necessary evidence, including the spoiled or unused stamps. The section ensures
an efficient mechanism for addressing grievances related to stamp spoilage.
Section 51: Allowance for Printed Forms Unused by Corporations
This provision caters to corporations that have bulk-printed forms with impressed
stamps but no longer require their use. The allowance reflects an understanding of
the unique needs of corporate entities, preventing wastage of fiscal resources.
Section 52: Allowance for Misused Stamps
Section 52 permits refunds for stamps that have been misapplied, provided they
meet certain conditions. For instance, the stamps should not have been executed or
used in a manner that fulfils the instrument’s purpose. This provision is aimed at
addressing errors in the application of stamp duties.
Section 53: Procedure for Allowances Under Sections 49-52
This section provides guidelines on how allowances for spoiled or misused stamps
are to be granted. Applications for refunds must be accompanied by evidence of the
defect and filed within a stipulated timeframe. The procedural rigor ensures
accountability and reduces potential misuse of the system.

Section 54: Allowance for Stamps Not Required for Use

In instances where purchased stamps are no longer required, allowances can be
claimed under this section. The applicant must prove that the stamps were
purchased genuinely but remained unused due to valid reasons.

15
Section 54-A and 54-B: Specific Allowances
Section 54-A provides allowances for stamps in denominations of annas.
Section 54-B pertains to refugee relief stamps, reflecting a socio-political
nuance, likely introduced to address specific historical exigencies.
Section 55: Allowance on Renewal of Certain Debentures
This provision facilitates allowances where debentures are renewed and new stamps
are affixed. The refund or credit aims to avoid double taxation on the same financial
instrument.

Chapter V of the Indian Stamp Act, 1899, represents a balanced approach to fiscal
responsibility and taxpayer fairness. By addressing various contingencies related to
spoiled, unused, or misapplied stamps, the Act ensures that individuals and entities
are not unduly penalized while maintaining the integrity of the stamp duty system.
Each section is structured to provide clear guidance on eligibility, application
processes, and the scope of relief, thus promoting efficient administration of stamp-
related allowances.
CHAPTER VI
REFERENCE AND REVISION
Chapter VI of the Indian Stamp Act, 1899, focuses on the mechanisms for reviewing
decisions related to stamp duty. It encompasses procedures for referring cases to
higher authorities and revising decisions to ensure proper enforcement of the law.
This chapter ensures the rectification of any errors in stamp-related adjudications,
thus safeguarding revenue and upholding procedural justice.
1. Control of Revenue Authorities and Case Statements to Higher Authorities
(Section 56)
This section empowers the Chief Controlling Revenue Authority (CCRA) to
maintain oversight over subordinate revenue officers.
When any subordinate authority encounters a legal doubt concerning the
stamp duty of an instrument, it can refer the case to the CCRA.
The CCRA has the authority to make a final determination or, if necessary,
forward the case to the High Court for a more authoritative ruling.
2. Reference to the High Court by CCRA (Section 57)
The CCRA may state a case to the High Court for its opinion on the
correctness of a stamp duty adjudication.
This provision ensures uniformity in the interpretation and application of stamp
duty laws across jurisdictions.

16
 Such references require the CCRA to frame specific legal questions for the
High Court's consideration.
3. High Court's Powers to Seek Further Information (Section 58)
The High Court, upon receiving a reference, is empowered to seek further
details or clarifications about the case.
This provision ensures that decisions are made with a complete
understanding of the facts and legal complexities involved.
4. Disposition of Case by the High Court (Section 59)

Once the High Court has considered the reference, it provides its decision on
the matter.
The judgment is binding on the revenue authorities, ensuring finality in
disputes over stamp duty.
5. Reference by Other Courts to the High Court (Section 60)
Courts (other than revenue courts) may also refer cases involving the
sufficiency of stamps to the High Court.
This typically occurs when stamp-related issues arise during the adjudication
of civil or criminal matters.
6. Revision of Decisions Regarding Stamp Sufficiency (Section 61)
Subordinate courts’ decisions regarding whether an instrument is adequately
stamped can be reviewed and revised.
This provision serves as a corrective mechanism to address errors or
inconsistencies in judicial decisions.
CHAPTER VII
CRIMINAL OFFENCES AND PROCEDURE
Chapter VII of the Indian Stamp Act, 1899 outlines provisions related to criminal
offences and procedural safeguards to enforce compliance with the Act's
requirements. This chapter is pivotal in ensuring that instruments are appropriately
stamped and any contraventions are penalized to safeguard revenue interests.

1. Penalties for Non-Compliance

Section 62: This section stipulates penalties for executing or signing an

instrument that is not duly stamped. Such actions attract fines proportional to
the nature and extent of the contravention.

Section 62-A: This newly inserted provision penalizes failure to adhere to

obligations under Section 9-A, which deals with stamp duty in stock
exchanges and depositories.

17
 Section 63: Failure to cancel adhesive stamps is specifically addressed.
Improper cancellation can result in fines to prevent reuse and potential
revenue leakage.

Section 64: Addresses omissions in complying with Section 27, which

mandates declaring all relevant facts affecting duty. Non-compliance invites
penalties.

2. Fraud and Malfeasance

Section 65: Refusal to issue receipts or creating devices to evade stamp duty
are punishable. The section aims to counteract attempts to undermine the
Act’s objectives through fraudulent practices.

Section 66: Relates to improperly executed insurance policies, emphasizing

the need for appropriate stamping before the document becomes operative.

Section 67: Regulates the issuance of incomplete sets of bills or marine

insurance policies to deter fraudulent practices.

3. Revenue Safeguards

Section 68: Penalizes actions like postdating bills or using other manipulative
methods to defraud revenue authorities.

Section 69: Any breaches of rules regarding the sale of stamps or

unauthorized sales are addressed here, with specific penalties laid down to
prevent malpractices in the supply chain.

4. Prosecution and Judicial Oversight

Section 70: Empowers the government to initiate prosecutions for violations

of the Stamp Act. This section provides a clear mandate for enforcement
agencies to act against defaulters.

Section 71: Details the jurisdiction of Magistrates who can preside over
offences under the Act. This ensures that cases are handled by appropriate
judicial authorities.

Section 72: Clarifies the venue of trials for offences, usually based on the
location where the offence occurred or where the accused resides, providing
logistical clarity for enforcement.

5. Enforcement Mechanism

This chapter underlines the role of the Collector and other revenue officials in
examining instruments, impounding them when required, and initiating legal action
against defaulters. The judiciary is empowered to assess and decide on disputes
regarding penalties or the adequacy of stamping.

18
The provisions under Chapter VII are crafted to:

Deter evasion of stamp duty.

Ensure compliance with stamping requirements through robust penalties.

Grant enforcement authorities, the necessary powers to uphold fiscal integrity.

The chapter not only penalizes non-compliance but also sets procedural standards
to ensure fairness in trials, thereby balancing state interests with individual rights.
These provisions highlight the Act's dual objectives of revenue collection and legal
certainty.

CHAPTER VIII

SUPPLEMENTAL PROVISIONS

Chapter VIII of the Indian Stamp Act, 1899, deals with supplemental provisions that
outline the administrative and regulatory framework supporting the enforcement of
the Act. These provisions provide clarity on the inspection, rule-making authority,
delegation, and savings related to stamp duties.
1. Books and Records Open to Inspection (Section 73)
This section empowers authorities to inspect books, registers, and documents to
ensure compliance with the Act. This ensures accountability and allows revenue
authorities to confirm that instruments chargeable with duty are properly stamped.
Such inspections are a crucial mechanism to prevent fraud and revenue loss.
2. Rule-Making Powers of the Central Government (Section 73-A and Section
74)
Sections 73-A and 74 confer powers on the Central Government to make rules for
implementing the provisions of the Act effectively. This includes:
Section 73-A: Authorizing specific authorities to issue directions and
instructions, thereby ensuring uniform application of the Act.
Section 74: Lays down the power to create rules for the sale of stamps and
other procedural aspects. The rules must be published, providing
transparency and accessibility.
3. Delegation of Powers (Section 76-A)
Section 76-A permits the Central Government to delegate certain powers vested in it
under the Act to subordinate authorities. Such delegation facilitates the
decentralization of responsibilities and aids in the smoother implementation of the
Act across various jurisdictions.
4. Saving Provisions
Section 77: This section ensures that the provisions of the Stamp Act do not
affect the court fees levied under specific laws, such as the Court Fees Act,
1870.

19
 Section 77-A: Protects instruments executed before the commencement of
amendments from the application of the revised provisions, thereby avoiding
retrospective imposition of duties.
5. Publication of Rules (Section 76)
Rules framed under the Act are required to be published in the Official Gazette,
ensuring public awareness. This transparency is critical for maintaining the rule of
law and enabling affected parties to familiarize themselves with compliance
requirements.
6. Accessibility and Translation of the Act (Section 78)
Section 78 mandates the Act's translation into regional languages to ensure
accessibility to diverse linguistic groups. It also stipulates that copies should be sold
at reasonable rates, promoting widespread understanding and adherence.
These provisions under Chapter VIII serve as the backbone for the implementation,
enforcement, and operational efficiency of the Indian Stamp Act, 1899. They provide
clarity on administrative actions, uphold the transparency of rules, and establish
mechanisms for resolving ambiguities in the Act’s application.
Additional note on Section 6A of the Indian Stamp (Himachal Pradesh
Amendment) Act, 1952
The provision under Section 6-A of the Indian Stamp (Himachal Pradesh
Amendment) Act, 1952 establishes specific rules regarding the payment of stamp
duty on copies, counterparts, or duplicates of instruments when the principal or
original instrument has not been appropriately stamped. Here's a detailed
explanation:
Key Elements of Section 6-A
1. Overriding Effect:
o This section begins with a non-obstante clause: "Notwithstanding anything
contained in sections 4 or 6 or in any other law."
o This means that the provisions of Section 6-A will override other conflicting
provisions of the Indian Stamp Act, 1899, or any other law concerning stamp
duty.
2. Duty Requirement on Principal/Original Instrument:
o It specifies that unless it is proven that stamp duty chargeable under the
Himachal Pradesh Amendment has been paid on:
(a) The principal or original instrument; or
(b) Any counterpart, duplicate, or copy, as per this section,
o Then, the instrument (sale, mortgage, or settlement), counterpart, duplicate,
or copy will be subject to the stamp duty at a rate applicable to the principal
or original instrument.

20
3. Applicability to Higher Rates:
o If the principal or original instrument is received in Himachal Pradesh and
would have been chargeable with a higher rate of duty under the Himachal
Pradesh Amendment, the counterpart, duplicate, or copy must also be
stamped with this higher rate.
o This ensures uniformity in the treatment of original documents and their
replicas in terms of stamp duty.
4. Bar on Use in Evidence:
o Section 6-A(2) prohibits instruments, counterparts, duplicates, or copies
chargeable under this section from being admitted as evidence in any legal
proceedings unless the appropriate stamp duty has been paid.
o This restriction is significant for legal enforceability and admissibility of
documents in courts or other legal forums.
5. Relief Through Payment of Duty:
o Proviso to Section 6-A(2):
▪ If an unstamped or insufficiently stamped counterpart, duplicate, or copy is
produced before a court, the court has the discretion to allow payment of
the deficient stamp duty.
▪ Once the requisite stamp duty is paid, the document can then be admitted
in evidence.
Objective and Implications
Purpose:
o The provision ensures that the government does not lose revenue due to
unstamped or insufficiently stamped documents, whether original or
copies.
o It seeks to maintain consistency in the stamp duty treatment of original
instruments and their replicas.
Implications:
o Parties must ensure that the appropriate stamp duty is paid on both the
principal instrument and its counterparts or duplicates to avoid legal
hurdles.
o Failure to comply with the stamp duty requirements can lead to
inadmissibility of documents, resulting in delays or complications in legal
proceedings.
Summary
Suppose a person executes a sale deed (principal instrument) in another
state with a lower stamp duty and later uses a copy of it in Himachal Pradesh.

21
 If the original document would have attracted a higher rate of stamp duty in
Himachal Pradesh, the counterpart or copy must also bear this higher rate to
be admissible.
This provision emphasises compliance with Himachal Pradesh's specific stamp duty
requirements, safeguarding the state's revenue while providing a mechanism for
rectifying deficiencies in stamping.
Following is an example to illustrate the application of Section 6-A of the Indian
Stamp (Himachal Pradesh Amendment) Act, 1952:
1. Original Instrument Executed in Another State:
o A Sale Deed for property is executed and stamped in Punjab, where the
applicable stamp duty is 2% of the transaction value.
o The property being sold is located in Himachal Pradesh, where the
applicable stamp duty under the Himachal Pradesh Stamp Act is 5% of
the transaction value.
2. Counterpart/Duplicate Produced in Himachal Pradesh:
o The buyer or seller produces a duplicate or copy of the sale deed in
Himachal Pradesh for some legal purpose (e.g., registering the property,
using it in court, or as proof of ownership).
Application of Section 6-A
Analysis under Section 6-A(1):
The principal or original instrument (Sale Deed) was stamped in Punjab at a
lower rate (2%).
Since the stamp duty payable in Himachal Pradesh is higher (5%), and the
original instrument was not stamped with this higher rate, the duplicate or copy
also becomes liable to stamp duty at the higher rate applicable in Himachal
Pradesh.
Bar on Evidence under Section 6-A(2):
If the duplicate or copy is produced in Himachal Pradesh without paying
the additional stamp duty (3%), it cannot be admitted as evidence in legal
proceedings.
Example: A Himachal Pradesh court would reject the unstamped duplicate or
copy if submitted as evidence in a dispute related to the property.
Relief under the Proviso to Section 6-A(2):
If the insufficiently stamped document is produced in court, the court can allow
the party to pay the deficient stamp duty (3%) and any applicable penalty.

22
 Once the deficient duty is paid, the duplicate or copy will be considered properly
stamped and can be admitted as evidence.
Illustration

Transaction Value: ₹50,00,000

Stamp Duty in Punjab: 2% of ₹50,00,000 = ₹1,00,000

Stamp Duty in Himachal Pradesh: 5% of ₹50,00,000 = ₹2,50,000

Deficient Duty Payable: ₹2,50,000 - ₹1,00,000 = ₹1,50,000

If the counterpart or duplicate is presented in Himachal Pradesh, the party would
need to pay ₹1,50,000 as additional stamp duty (plus penalties, if applicable) to
make it admissible. This example highlights how Section 6-A ensures that
counterparts, duplicates, or copies of instruments used in Himachal Pradesh adhere
to the state’s stamp duty requirements, even if the original was stamped at a lower
rate in another state. It prevents revenue loss for the Himachal Pradesh government
and ensures proper compliance.

23