Time of stamping instruments executed within India – Indian Stamp Act


A fiscal charge known as “stamp duty” must be paid to the government in India for any documents that create a title or any other interest in the property, including business contracts. States also have their statutes and regulations, even though the Indian Stamp Act of 1899, a significant piece of legislation, oversees transactions involving the payment of stamp duty. These statutes take into account situations where stamp paper is purchased but not used right away or are otherwise “spoilt” in addition to regulating the various rates of stamp duty payable on documents like sale deeds, lease deeds, and securities and offering penalties in the event of undervaluation of duty.

Although there are procedures for approval or reimbursement of such spoiled stamps, the time restriction for considering such claims has been a point of contention and the cornerstone of the ongoing battle. How long does a stamp paper have a stamp on it? Can a stamp duty refund be requested if it won’t be put to use right away? What options are there for recovering damaged stamps? Is hardship a good reason to consider a late request for a refunded stamp? Indian courts frequently deal with these issues and try to strike a balance between a belated claim for reimbursement and unjust enrichment of the state, as is highlighted in the discussion below.

Stamping instruments executed within India

Since stamp duty is a matter of the State, it varies from one State to another. In many states, the stamp duty is paid in accordance with the market value determined by the stamp office. When a document needs to be stamped, it must be unsigned and undated. Once the Stamp Office has stamped the document, it can then be signed and executed. The Stamp Duty Calculator could be used to determine the Stamp Duty payable in various states. The Indian Stamp Act of 1899 contains the provisions for the imposition, collection, and payment of Stamp Duty. According to the Stamp Act, various papers must be legitimated by paying the appropriate Stamp Duty.

The State receives the Stamp Duty revenue collected during any fiscal year. The Indian Stamp Act of 1899’s primary goal is to bring in money for the government. Nevertheless, throughout time, marked documents are seen as being considerably more authentic and trustworthy than unstamped documents.

Kinds of stamp papers

Judicial stamp papers are used for legal and court activity, whereas non-judicial stamp papers are used to make contracts, and agreements, register documents, enter into leases, buy-sell transactions, and other similar activities.

Method of payment of stamp duty

Stamps that are embossed or sticky can be used to pay Stamp Duty. A stamp must be applied either before or during the execution of an instrument in India. Within three months of the initial receipt in India, an instrument that was executed outside of India may be stamped.

Section 18 in The Indian Stamp Act, 1899

Instruments other than bills and notes were executed out of India.

1. Every instrument chargeable with duty executed only out of 45 [India] and not being a bill of exchange 46 [***] or promissory note, may be stamped within three months after it has been first received in 45 [India].

2. Where any such instrument cannot, with reference to the description of stamp prescribed therefor, be duly stamped by a private person, it may be taken within the said period of three months to the Collector, who shall stamp the same, in such manner as the 47 [State Government] may by rule prescribe, with a stamp of such value as the person so taking such instrument may require and pay for.

Limitation Period

The Indian Stamp Act’s limitation period has generated a lot of discussions since, while it does not preclude a right, it does preclude the remedy of requesting a return of unused stamps in Indian courts. In general, if a stamp is spoiled under section 49, a refund may be requested within six months of the instrument’s date or the date the stamp was spoiled, whichever comes first. Relevantly, the Indian Stamp Act does not provide for an extension of time to submit an application or take into account any claim of a late application. In P.C. Jain Textile Pvt. Ltd v. State of Haryana, CWP No. 1016 of 2013, the petitioner stated that a belated claim must be permitted since the vendor delayed the matter and ultimately refused to sell his land. The High Court of Punjab & Haryana clarified this. According to the court’s ruling in this case, “the limitation established for moving the application under Section 50(2) of the Act has a sacredness that cannot be swept aside, making the provision superfluous and nugatory.” It is also important to remember that certain tax laws, such as the Income Tax Act of 1962’s section 119(b), provide the income tax authorities the authority to take late requests for exemptions or refunds into account in situations of actual hardship. It’s crucial to distinguish these situations from the Indian Stamp Act, self-contained legislation, where the legislators forbade any such late claims.

A taxing statute must be interpreted within its bounds, even though the principle of unjust enrichment exists in administrative law and is applicable to the activities of a state. In accordance with this, when interpreting sections 49 and 50 of the Indian Stamp Act, the courts must promote a rigorous reading to give effect to the statute. It is also reasonable to argue that the State’s failure to issue a refund after the statute of limitations expired does not violate article 265 of the Constitution’s prohibition on double taxation or the lawless retention of tax because it falls within the bounds of the statute. Furthermore, it is not arbitrary as the executive can only act in accordance with the authority granted to it by the legislature.




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