STAMP ACT, 1899:
Q: What is Stamp duty?
Ans: Stamp duty is collected with a view to recognize the transaction by the state and protect the right under it. It’s a device to collect money. They are divided into impressed and adhesive. They are already explained in the introduction part. Originally, only stamps are affixed, now in case of value more than Rs.100/- money is paid. Thus stamp act lost its nominal significance. Section which creates liability to pay duty.
S.3 is the charging section. It says every instrument mentioned in the schedule of the Act shall be chargeable with the duty of the amount indicated therein.
S.4: If several instruments are employed to complete one transaction, only one of them is chargeable with duty and for remaining Rs.1/- only the fee.
Cancellation: Every stamp must be cancelled by writing over it. Cancel is by writing or across the stamp his name or initials. The object is to prevent further use. Authorities under the Act.
As per of S.33 of Stamp Act every person having by law or consent of parties authority to receive evidence or in charge of a public office except police officer, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall if it appears that such instruments is not duly stamped, impound the same.
Impounding: It is used in the sense of ‘seziure’ of the document. A document is said to be impounded when it is ordered by a court or public officer to keep in the custody of office.
Any person can seek the opinion of the collector(District Registrar) as to the quantum of duty be paid in respect of any instrument even on the basis of a mere draft and even before its execution. Then collector shall determine the duty. He shall certify it and endorse over the documents. Certificate is issued by collector that an instrument is duly stamped is conclusive (S.40(2))and civil court cannot go behind the certificate and decide its validity. There is no time limit to seek opinion. The time limit one month prescribed under the proviso to S.32 is only for the purpose of endorsement there under and for the purpose of adjudication under this section.
Chief Controlling revenue authority is the superior authority over Collector.
Consequences and Remedies for NON-STAMPING
Consequences are two-fold:
I) As per S.35 such instrument shall not be: a) Received in evidence b) Acted upon c) Registered d) Authenticated hall not be used for any purpose.
However, if it is an unstamped receipt, which is required to be stamped, is produced, the same cannot be received in evidence unless the penalty of three rupees is paid by the person tendering it. But the same principle is not applicable to any instrument tendered to receive in evidence in any criminal Court other than the proceedings under Chapter IX or X(D) of the Code of Criminal Procedure
II) Penal consequences: Taking proceeding or payment of penalty shall not bar to prosecute for offence under this law. However, sanction of collector is necessary and collector should opine it was done with an intention to evade payment.