West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules 2001

the State of West Bengal

West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001

Published vide Notification No. 821-F.T, dated 1st March, 2001 (w.e.f. 15.03.2001) and published in the Calcutta Gazette Extraordinary, Part 1, dated 5.03.2001.

As amended by Notification No. 1614-FT, dated 5.10.2010

[With effect from 5.10.2010]

In exercise of the power conferred by clause (16B) of section 2, section 27, section 47A and section 75 of the Indian Stamp Act, 1899 (2 of 1899), and in supersession of this department notification No. 248-F.T., dated the 31st January, 1994, the Governor is pleased hereby to make the following rules:

1. Short title and commencement. – (1) These rules may be called the West Bengal Stamp (Prevention of Undervaluation of Instruments) Rules, 2001.
(2) They shall come into force from the 15th day of March, 2001.

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महाराष्ट्र स्टाम्प अधिनियम, 1958

महाराष्ट्र स्टाम्प अधिनियम, 1958 READ IN ENGLISH

बंबई राज्य में टिकटों और स्टाम्प ड्यूटी से संबंधित कानून को समेकित और संशोधित करने के लिए एक अधिनियम

1958 का अधिनियम संख्या 60

बॉम्बे सरकार राजपत्र, 1958, असाधारण, भाग V, पृष्ठ 122।

इस अधिनियम ने 4 जून 1958 को राष्ट्रपति की सहमति प्राप्त की, और सर्वप्रथम 11 जून, 1958 को बॉम्बे सरकार राजपत्र, भाग IV में प्रकाशित किया गया।

बंबई राज्य में टिकटों और स्टाम्प ड्यूटी से संबंधित कानून को समेकित और संशोधित करने के लिए एक अधिनियम

जहां यह बंबई राज्य में भारत के संविधान की सातवीं अनुसूची में सूची- I की प्रविष्टि 91 में निर्दिष्ट दस्तावेजों के संबंध में डाक टिकटों के स्टैम्प और स्टांप शुल्क की दरों से संबंधित कानून को समेकित और संशोधित करने के लिए समीचीन है; यह भारतीय गणतंत्र के नौवें वर्ष में इस प्रकार अधिनियमित किया गया है: –

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Amendments to the Indian Stamp Act, 1899 by Finance Act, 2019

11. Commencement of this Part. – The provisions of this Part shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

12. Amendment of section 2. – In section 2 of the Indian Stamp Act, 1899,(2 of 1899) (hereafter in this Part referred to as the principal Act), –

(a) for clause (1), the following clauses shall be substituted, namely: –

‘(1) “allotment list” means a list containing details of allotment of the securities intimated by the issuer to the depository under sub-section (2) of section 8 of the Depositories, Act, 1996,(22 of 1996);

(1A) “banker” includes a bank and any person acting as a banker;’;

(b) in clause (5), the following long line shall be added at the end, namely: –

“but does not include a debenture;”;

(c) after clause (7), the following clauses shall be inserted, namely: –

‘(7A) “clearance list” means a list of transactions of sale and purchase relating to contracts traded on the stock exchanges submitted to a clearing corporation in accordance with the law for the time being in force in this behalf;

(7B) “clearing corporation” means an entity established to undertake the activity of clearing and settlement of transactions in securities or other instruments and includes a clearing house of a recognised stock exchange;’;

(d) after clause (10), the following clauses shall be inserted, namely: –

‘(10A) “debenture” includes –

(i) debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not;

(ii) bonds in the nature of debenture issued by any incorporated company or body corporate;

(iii) certificate of deposit, commercial usance bill, commercial paper and such other debt instrument of original or initial maturity upto one year as the Reserve Bank of India may specify from time to time;

(iv) securitised debt instruments; and

(v) any other debt instuments specified by the Securities and

Exchange Board of India from time to time;

(10B) “depository” includes –

(a) a depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996,(22 of 1996.); and

(b) any other entity declared by the Central Government, by notification in the Official Gazette, to be a depository for the purposes of this Act;’;

(e) in clause (12), the words and figures “and includes attribution of electronic record within the meaning of section 11 of the Information Technology Act, 2000,(21 of 2000.)” shall be inserted at the end.

(f) for clause (14), the following clause shall be substituted, namely: –

‘(14) “instrument” includes –

(a) every document, by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded;

(b) a document, electronic or otherwise, created for a transaction in a stock exchange or depository by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded; and

(c) any other document mentioned in Schedule I,

but does not include such instruments as may be specified by the Government, by notification in the Official Gazette;’;
(g) after clause (15), the following clause shall be inserted, namely: –

‘(15A) “issuer” means any person making an issue of securities;’;

(h) for clause (16A), the following clauses shall be substituted, namely: –

‘(16A) “marketable security” means a security capable of being traded in any stock exchange in India;

(16B) “market value”, in relation to an instrument through which –

(a) any security is traded in a stock exchange, means the price at which it is so traded;

(b) any security which is transferred through a depository but not traded in the stock exchange, means the price or the consideration mentioned in such instrument;

(c) any security is dealt otherwise than in the stock exchange or depository, means the price or consideration mentioned in such instrument;’;

(i) after clause (23), the following clause shall be inserted, namely: –

‘(23A) “securities” includes –

(i) securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956,(42 of 1956);

(ii) a “derivative” as defined in clause (a) of section 45U of the Reserve Bank of India Act, 1934,(2 of 1934);

(iii) a certificate of deposit, commercial usance bill, commercial paper, repo on corporate bonds and such other debt instrument of original or initial maturity upto one year as the Reserve Bank of India may specify from time to time; and

(iv) any other instrument declared by the Central Government, by notification in the Official Gazette, to be securities for the purposes of this Act;’;

(j) after clause (26), the following clause shall be inserted, namely: –

‘(27) “stock exchange” includes –

(i) a recognised stock exchange as defined in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956,(42 of 1956); and

(ii) such other platform for trading or reporting a deal in securities, as may be specified by the Central Government, by notification in the Official Gazette, for the purposes of this Act.’.

13. Amendment of section 4. – In section 4 of the principal Act, after sub-section (2), the following sub-section shall be inserted, namely: –
“(3) Notwithstanding anything contained in sub-sections (1) and (2), in the case of any issue, sale or transfer of securities, the instrument on which stamp-duty is chargeable under section 9A shall be the principal instrument for the purpose of this section and no stamp-duty shall be charged on any other instruments relating to any such transaction.”.
14. Substitution of new section for section 8A. – For section 8A of the principal Act, the following section shall be substituted, namely: –
‘8A. Securities dealt in depository not liable to stamp-duty. – Notwithstanding anything contained in this Act or any other law for the time being in force, –

(a) an issuer, by the issue of securities to one or more depositories, shall, in respect of such issue, be chargeable with duty on the total amount of securities issued by it and such securities need not be stamped;

(b) the transfer of registered ownership of securities from a person to a depository or from a depository to a beneficial owner shall not be liable to duty.

Explanation. – For the purposes of this section, the expression “beneficial ownership” shall have the same meaning as assigned to it in clause (a) of sub-section (1) of section 2 of the Depositories Act, 1996,(22 of 1996).

15. Insertion of new Part AA. – In Chapter II of the principal Act, after Part A relating to ‘Of the liability of instruments to duty’, the following Part shall be inserted, namely: –
‘AA. – Of the liability of instruments of transaction in stock exchanges and depositories to duty

9A. Instruments chargeable with duty for transactions in stock exchanges and depositories. – (1) Notwithstanding anything contained in this Act, –

(a) when the sale of any securities, whether delivery based or otherwise, is made through a stock exchange, the stamp-duty on each such sale in the clearance list shall be collected on behalf of the State Government by the stock exchange or a clearing corporation authorised by it, from its buyer on the market value of such securities at the time of settlement of transactions in securities of such buyer, in such manner as the Central Government may, by rules, provide;

(b) when any transfer of securities for a consideration, whether delivery based or otherwise, is made by a depository otherwise than on the basis of any transaction referred to in clause (a), the stamp-duty on such transfer shall be collected on behalf of the State Government by the depository from the transferor of such securities on the consideration amount specified therein, in such manner as the Central Government may, by rules, provide;

(c) when pursuant to issue of securities, any creation or change in the records of a depository is made, the stamp-duty on the allotment list shall be collected on behalf of the State Government by the depository from the issuer of securities on the total market value of the securities as contained in such list, in such manner as the Central Government may, by rules, provide.

(2) Notwithstanding anything contained in this Act, the instruments referred to in sub-section (1) shall be chargeable with duty as provided therein at the rate specified in Schedule I and such instruments need not be stamped.

(3) From the date of commencement of this Part, no stamp-duty shall be charged or collected by the State Government on any note or memorandum or any other document, electronic or otherwise, associated with the transactions mentioned in sub-section (1).

(4) The stock exchange or a clearing corporation authorised by it or the depository, as the case may be, shall, within three weeks of the end of each month and in accordance with the rules made in this behalf by the Central Government, in consultation with the State Government, transfer the stamp-duty collected under this section to the State Government where the residence of the buyer is located and in case the buyer is located outside India, to the State Government having the registered office of the trading member or broker of such buyer and in case where there is no such trading member of the buyer, to the State Government having the registered office of the participant:

Provided that before such transfer, the stock exchange or the clearing corporation authorised by it or the depository shall be entitled to deduct such percentage of stamp-duty towards facilitation charges as may be specified in such rules.

Explanation. – The term “participant” shall have the same meaning as assigned to it in clause (g) of section 2 of the Depositories Act, 1996,(22 of 1996).

(5) Every stock exchange or the clearing corporation authorised by it and depository shall submit to the Government details of the transactions referred to in sub-section (1) in such manner as the Central Government may, by rules, provide.

9B. Instruments chargeable with duty for transactions otherwise than through stock exchanges and depositories. – Notwithstanding anything contained in this Act, –

(a) when any issue of securities is made by an issuer otherwise than through a stock exchange or depository, the stamp-duty on each such issue shall be payable by the issuer, at the place where its registered office is located, on the total market value of the securities so issued at the rate specified in Schedule I;

(b) when any sale or transfer or reissue of securities for consideration is made otherwise than through a stock exchange or depository, the stamp duty on each such sale or transfer or reissue shall be payable by the seller or transferor or issuer, as the case may be, on the consideration amount specified in such instrument at the rate specified in Schedule I.’.

16. Amendment of section 21. – In section 21 of the principal Act, –

(a) for the words “the value of such stock or security according to the average price or the value thereof on the day of the date of the instrument.”, the words “the market value of such stock or security:” shall be substituted;

(b) the following proviso shall be inserted, namely: –

“Provided that the market value for calculating the stamp-duty shall be, in the case of –

(i) options in any securities, the premium paid by the buyer;

(ii) repo on corporate bonds, interest paid by the borrower; and

(iii) swap, only the first leg of the cash flow.”.

17. Amendment of section 29. – In section 29 of the principal Act, –

(i) in clause (a), –

(a) the words, figures and brackets “No. 27 (Debenture)” shall be omitted;

(b) the words, figures, brackets and letter “No. 62 (a) (Transfer of shares in an incorporated Company or other body corporate)” shall be omitted;

(c) the words, figures, brackets and letter “No. 62 (b) (Transfer of debentures, being marketable securities, whether the debenture is liable to duty or not, except debentures provided for by section 8)” shall be omitted;

(ii) in clause (e), after the word “exchange”, the words “including swap” shall be inserted;

(iii) in clause (f), the word “and” shall be omitted;

(iv) after clause (g), the following clauses shall be inserted, namely: –

“(h) in the case of sale of security through stock exchange, by the buyer of such security;

(i) in the case of sale of security otherwise than through a stock exchange, by the seller of such security;

(j) in the case of transfer of security through a depository, by the transferor of such security;

(k) in the case of transfer of security otherwise than through a stock exchange or depositiory, by the transferor of such security;

(l) in the case of issue of security, whether through a stock exchange or a depository or otherwise, by the issuer of such security; and

(m) in the case of any other instrument not specified herein, by the person making, drawing or executing such instrument.”.

18. Insertion of new section 62A. – After section 62 of the principal Act, the following section shall be inserted, namely: –
“62A. Penalty for failure to comply with provisions of section 9A. – (1) Any person who, –

(a) being required under sub-section (1) of section 9A to collect duty, fails to collect the same; or

(b) being required under sub-section (4) of section 9A to transfer the duty to the State Government within fifteen days of the expiry of the time specified therein, fails to transfer within such time,

shall be punishable with fine which shall not be less than one lakh rupees, but which may extend upto one per cent. of the collection or transfer so defaulted.

(2) Any person who, –

(a) being required under sub-section (5) of section 9A to submit details of transactions to the Government, fails to submit the same; or

(b) submits a document or makes a declaration which is false or which such person knows or believes to be false,

shall be punishable with fine of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less.”.

19. Insertion of new section 73A. – After section 73 of the principal Act, the following section shall be inserted, namely: –
“73A. Power of Central Government to make rules. – (1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of Part AA of Chapter II.

(2) Without prejudice to the generality of the provisions of sub-section (1), the Central Government may make rules for all or any of the following matters, namely: –

(a) the manner of collection of stamp-duty on behalf of the State Government by the stock exchange or the clearing corporation authorised by it, from its buyer under clause (a) of sub-section (1) of section 9A;

(b) the manner of collection of stamp-duty on behalf of the State Government by the depository from the transferor under clause (b) of sub-section (1) of section 9A;

(c) the manner of collection of stamp-duty on behalf of the State Government by the depository from the issuer under clause (c) of sub-section (1) of section 9A;

(d) the manner of transfer of stamp-duty to the State Government under sub-section (4) of section 9A;

(e) any other matter which has to be, or may be, provided by rules.”.

20. Amendment of section 76. – In section 76 of the principal Act, after sub-section (2), the following sub-section shall be inserted, namely: –

“(2A) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.”.

21. Amendment of Schedule I. – In Schedule I of the principal Act, –
(i) in Article 19, in column (1), –

(a) after the words “Certificate or other Document”, the brackets, words, figures and letter “(except the certificate or other document covered under Articles 27 and 56A)” shall be inserted;

(b) the words, brackets and figures “See also Letter of Allotment of Shares (No. 36)” shall be omitted;

(ii) for Article 27 and the entries relating thereto, the following Article and entries shall be subsitituted, namely: –

(1)

(2)

“27. Debenture – [as defined by section 2 (10A)]
(see sections 9A and 9B)

(a) in case of issue of debenture;

0.005%

(b) in case of transfer and re-issue of debenture.

0.0001%”;

(iii) in Article 28, for the entry in column (1), after the words “Delivery order in Respect of Goods,”, the brackets and words “(excluding delivery order in respect of settlement of transactions in securities in stock exchange)” shall be inserted;

(iv) in Article 36, for the entry in column (1), the following entry shall be substituted, namely: –

“36. Letter Of Allotment in respect of any loan to be raised by any company or proposed company.”;

(v) after Article 56 and the entry relating thereto, the following Article and entries shall be inserted, namely: –

(1)

(2)

“56A. Security Other Than Debentures
(see sections 9A and 9B) –

(a) issue of security other than debenture;

0.005%

(b) transfer of security other than debenture on delivery basis;

0.015%

(c) transfer of security other than debenture on non-delivery basis;

0.003%

(d) derivatives –

(i) futures (equity and commodity)

0.002%

(ii) options (equity and commodity)

0.003%

(iii) currency and interest rate derivatives

0.0001%

(iv) other derivatives

0.002%

(e) Government securities

0%

(f) repo on corporate bonds

0.00001%”;

(vi) in Article 62, items (a) and (b) and the entries relating thereto shall be omitted.


Finance Act, 2019

Indian Stamp Act, 1899

The scheme of the Stamp Act may be briefly noticed. Chapter II contains provisions about the liability of the instrument to duty, of the time of stamping instruments, of values for duty and provisions as to the officer to whom duty is payable. Chapter III which contains only two sections deals with the adjudication as to stamps. The first (s. 31) is where an instrument, whether executed or not and whether previously stamped or not, is brought to the Collector with an application to have his opinion as to the duty with which it is chargeable. For obtaining that opinion the applicant has to pay a fee. The Collector may call for information and take evidence. After he has done so he determines the amount of the stamp duty and certifies under S. 32 that the full duty with which it is chargeable has been paid. It is obvious that the party applying is interested in obtaining the opinion and therefore he cannot object to the certificate of the Collector. If the Collector himself is in doubt he has the power under S. 56(2) to ask for the opinion of the appellant. It is therefore clear that in respect of these two provisions under Chap. III no grievance could exist on either side. From S. 33 and Chap. IV onwards there are provisions in which the opinion of the Stamp Officer and of the party interested in pay the stamp duty may come in conflict. The sections in chaps. IV, V and VI ending with S. 61, deal with situations arising from such difference of opinion. Section 57(a) falls under this heading. In our opinion, therefore, this contention of the appellant fails.

 


Indian Stamp Act, 1899

  1. Short title, extent and commencement
  2. Definitions
  3. Instruments chargeable with duty
    3A. Instruments chargeable with additional duty
  4. Several instruments used in single transaction of sale, mortgage or settlement
  5. Instruments relating to several distinct matters
  6. Instruments coming within several descriptions in Schedule I
  7. Policies of seainsurance
  8. Bonds, debentures or other securities issued on loans under Act 11 of 1879
    8A. Securities dealt in depository not liable to stamp duty
    8B. Corporatisation and demutualisation schemes and related instruments not liable to duty
    8C. Negotiable warehouse receipts not liable to stamp duty
    8E. Conversion of a branch of any bank into a wholly owned subsidiary of bank or transfer of shareholding of a bank to a holding company of bank not liable to duty.
  9. Power to reduce, remit or compound duties
  10. Duties how to be paid
  11. Use of adhesive stamps
  12. Cancellation of adhesive stamps
  13. Instruments stamped with impressed stamps how to be written
  14. Only one instrument to be on same stamp
  15. Instrument written contrary to section 13 or 14 deemed unstamped
  16. Denoting duty
  17. Instruments executed in India
  18. Instruments other than bills and notes executed out of
    [India]
  19. Bills and notes drawn out of India
  20. Conversion of amount expressed in foreign currencies
  21. Stock and marketable securities how to be valued
  22. Effect of statement of rate of exchange or average price
  23. Instruments reserving interest
    23A. Certain instruments connected with mortgages of marketable securities to be chargeable as agreements
  24. How transfer in consideration of debt, or subject to future payment, etc., to be charged
  25. Valuation in case of annuity, etc
  26. Stamp where value of subjectmatter is indeterminate
  27. Facts affecting duty to be set forth in instrument
  28. Direction as to duty in case of certain conveyances
  29. Duties by whom payable
  30. Obligation to give receipt in certain cases
  31. Adjudication as to proper stamp
  32. Certificate by Collector
  33. Examination and impounding of instruments
  34. Special provision as to unstamped receipts
  35. Instruments not duly stamped inadmissible in evidence, etc
  36. Admission of instrument where not to be questioned
  37. Admission of improperly stamped instruments
  38. Instruments impounded, how dealt with
  39. Collectors power to refund penalty paid under section 38, subsection (1)
  40. Collectors power to stamp instruments impounded
  41. Instruments unduly stamped by accident
  42. Endorsement of instruments on which duty has been paid under section 35, 40 or 41
  43. Prosecution for offence against Stamplaw
  44. Persons paying duty or penalty may recover same in certain cases
  45. Power to revenueauthority to refund penalty or excess duty in certain cases
  46. Nonliability for loss of instruments sent under section 38
  47. Power of payer to stamp bills and promissory notes received by him unstamped
  48. Recovery of duties and penalties
  49. Allowance for spoiled stamps
  50. Application for relief under section 49 when to be made
  51. Allowance in case of printed forms no longer required by Corporations
  52. Allowance for misused stamps
  53. Allowance for spoiled or misused stamps how to be made
  54. Allowance for stamps not required for use
    54A. Allowances for stamps in denominations of annas
    54B. Allowances for Refugee Relief Stamps
  55. Allowance or renewal of certain debentures
  56. Control of, and statement of case to, Chief Controlling Revenueauthority
  57. Statement of case by Chief Controlling Revenueauthority to High Court
  58. Power of High Court to call for further particulars as to case stated
  59. Procedure in disposing of case stated
  60. Statement of case by other Courts to High Court
  61. Revision of certain decisions of Courts regarding the sufficiency of stamps
  62. Penalty for executing, etc., instrument not duly stamped
  63. Penalty for failure to cancel adhesive stamp
  64. Penalty for omission to comply with provisions of section 27
  65. Penalty for refusal to give receipt, and for devices to evade duty on receipts
  66. Penalty for not making out policy, or making one not duly stamped
  67. Penalty for not drawing full number of bills or marine policies purporting to be in sets
  68. Penalty for postdating bills, and for other devices to defraud the revenue
  69. Penalty for breach of rule relating to sale of stamps and for unauthorized sale
  70. Institution and conduct of prosecutions
  71. Jurisdiction of Magistrates
  72. Place of trial
  73. Books, etc., to be open to inspection
  74. Powers to make rules relating to sale of stamps
  75. Power to make rules generally to carry out Act
  76. Publication of rules
    76A. Delegation of certain powers
  77. Saving as to Courtfees
    77A. Saving as to certain stamps
  78. Act to be translated and sold cheaply
  79. Repeal

The Indian Stamp Act, 1899

(2 of 1899)

[27th January, 1899]…
An Act to consolidate and amend the law relating to Stamps .
Whereas it is expedient to consolidate and amend the law relating to Stamps; It is hereby enacted as follows:
LEGISLATIVE HISTORY 6

CHAPTER I

Preliminary

1. Short title, extent and commencement .(1) This Act may be called The Indian Stamp Act , 1899.
[(2) It extends to the whole of India except the State of Jammu and Kashmir:
Provided that it shall not apply to [the territories which, immediately before the 1st November, 1956, were comprised in Part B States] (excluding the State of Jammu and Kashmir) except to the extent to which the provisions of this Act relate to rates of stamp-duty in respect of the documents specified in Entry 91 of List i in the Seventh Schedule to the Constitution.]
(3) It shall come into force on the first day of July, 1899.
2. Definitions .In this Act, unless there is something repugnant in the subject or context,
(1) Banker.Banker includes a bank and any person acting as a banker;
(2) Bill of exchange.Bill of exchange means a bill of exchange as defined by the Negotiable Instruments Act, 1881 (26 of 1881), and includes also a hundi, and any other document entitling or purporting to entitle any person, whether named therein or not, to payment by any other person of, or to draw upon any other person for, any sum of money;
(3) Bill of exchange payable on demand.Bill of exchange payable on demand includes
(a) an order for the payment of any sum of money by a bill of exchange or promissory note, or for the delivery of any bill of exchange or promissory note in satisfaction of any sum of money, or for the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen;

(b) an order for the payment of any sum of money weekly, monthly or at any other stated period; and

(c) a letter of credit, that is to say, any instrument by which one person authorises another to give credit to the person in whose favour it is drawn;

(4) Bill of lading.Bill of lading includes a through bill of lading, but does not include a mates receipt;
(5) Bond.Bond includes
(a) any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be;

(b) any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another; and

(c) any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another;

(6) Chargeable.chargeable means, as applied to an instrument executed or first executed after the commencement of this Act, chargeable under this Act, and, as applied to any other instrument, chargeable under the law in force in [India] when such instrument was executed or, where several persons executed the instrument at different times, first executed;
(7) Cheque.cheque means a bill of exchange, drawn on a specified banker and not expressed to be payable otherwise than on demand;
[* * *]
(9) Collector.Collector
(a) means, within the limits of the towns of Calcutta, Madras and Bombay, the Collector of Calcutta, Madras and Bombay, respectively and, without those limits, the Collector of a district, and

(b) includes a Deputy Commissioner and any officer whom [the [State Government]] may, by notification in the Official Gazette, appoint in this behalf;

(10) Conveyance.conveyance includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for by Schedule I;
(11) Duly stamped.duly stamped, as applied to an instrument, means that the instrument bears an adhesive or impressed stamp of not less than the proper amount and that such stamp has been affixed or used in accordance with the law for the time being in force in [India];
(12) Executed and execution.executed and execution, used with reference to instruments, mean signed and signature;
[* * *]
(13) Impressed stamp.impressed stamp includes
(a) labels affixed and impressed by the proper officer, and

(b) stamps embossed or engraved on stamped paper;

[(13-A) India.India means the territory of India excluding the State of Jammu and Kashmir;]
(14) Instrument.instrument includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded;
(15) Instrument of partition.instrument of partition means any instrument whereby co-owners of any property divide or agree to divide such property in severalty, and includes also a final order for effecting a partition passed by any revenue-authority or any civil Court and an award by an arbitrator directing a partition;
(16) Lease.lease means a lease of immovable property, and includes also
(a) a patta;

(b) a kabuliyat or other undertaking in writing, not being a counter-part of a lease, to cultivate, occupy, or pay or deliver rent for, immovable property;

(c) any instrument by which tolls of any description are let;

(d) any writing on an application for a lease intended to signify that the application is granted;

[(16-A) Marketable security.marketable security means a security of such a description as to be capable of being sold in any stock market in [India] or in the United Kingdom;]
(17) Mortgage-deed.mortgage-deed includes every instrument whereby, for the purpose of securing money advanced, or to be advanced, by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates to, or in favour of another a right over or in respect of specified property;
(18) Paper.paper includes vellum, parchment or any other material on which an instrument may be written;
(19) Policy of insurance.policy of insurance includes
(a) any instrument by which one person, in consideration of a premium, engages to indemnify another against loss, damage or liability arising from an unknown or contingent event;

(b) a life-policy, and any policy insuring any person against accident or sickness, and any other personal insurance; [*]

[* * *]
[(19-A) Policy of group insurance.policy of group insurance means any instrument covering not less than fifty or such smaller number as the Central Government may approve, either generally or with reference to any particular case, by which an insurer, in consideration of a premium paid by an employer or by an employer and his employees jointly, engages to cover, with or without medical examination and for the sole benefit of persons other than the employer, the lives of all the employees or of any class of them, determined by conditions pertaining to the employment, for amounts of insurance based upon a plan which precludes individual selection;]
(20) Policy of sea-insurance or sea-policy.policy of sea-insurance or sea-policy
(a) means any insurance made upon any ship or vessel (whether for marine or inland navigation), or upon the machinery, tackle or furniture of any ship or vessel, or upon any goods, merchandise or property of any description whatever on board of any ship or vessel, or upon the freight of, or any other interest which may be lawfully insured in, or relating to, any ship or vessel, and

(b) includes any insurance of goods, merchandise or property for any transit which includes, not only a sea risk within the meaning of clause (a), but also any other risk incidental to the transit insured from the commencement of the transit to the ultimate destination covered by the insurance;

where any person, in consideration of any sum of money paid or to be paid for additional freight or otherwise, agrees to take upon himself any risk attending goods, merchandise or property of any description whatever while on board of any ship or vessel, or engages to indemnify the owner of any such goods, merchandise or property from any risk, loss or damage, such agreement or engagement shall be deemed to be a contract for sea-insurance;
(21) Power-of-attorney.power-of-attorney includes any instrument (not chargeable with a fee under the law relating to Court-fees for the time being in force) empowering a specified person to act for and in the name of the person executing it;
(22) Promissory note.promissory note means a promissory note as defined by the Negotiable Instruments Act, 1881 (26 of 1881);
it also includes a note promising the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen;
(23) Receipt.receipt includes any note, memorandum or writing
(a) whereby any money, or any bill of exchange, cheque or promissory note is acknowledged to have been received, or

(b) whereby any other movable property is acknowledged to have been received in satisfaction of a debt, or

(c) whereby any debt or demand, or any part of a debt or demand, is acknowledged to have been satisfied or discharged, or

(d) which signifies or imports any such acknowledgment,

and whether the same is or is not signed with the name of any person; [*]
(24) Settlement.settlement means any non-testamentary disposition, in writing, of movable or immovable property made
(a) in consideration of marriage,

(b) for the purpose of distributing property of the settler among his family or those for whom he desires to provide, or for the purpose of providing for some person dependent on him, or

(c) for any religious or charitable purpose;

and includes an agreement in writing to make such a deposition [and, where any such disposition has not been made in writing, any instrument recording, whether by way of declaration of trust or otherwise, the terms of any such disposition]; [*]
[(25) Soldier.soldier includes any person below the rank of non-commissioned officer who is enrolled under the [Indian Army Act, 1911];]
[(26) Stamp.Stamp means any mark, seal or endorsement by any agency or person duly authorised by the State Government, and includes an adhesive or impressed stamp, for the purposes of duty chargeable under this Act.]
CHAPTER II

Stamp-Duties

A.Of the liability of instruments to duty

3. Instruments chargeable with duty .Subject to the provisions of this Act and the exemptions contained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated in that Schedule as the proper duty therefor, respectively, that is to say,
(a) every instrument mentioned in that Schedule which, not having been previously executed by any person, is executed in [India] on or after the first day of July, 1899;

(b) every bill of exchange [payable otherwise than on demand] [*] or promissory note drawn or made out of [India] on or after that day and accepted or paid, or presented for acceptance or payment, or endorsed, transferred or otherwise negotiated, in [India]; and

(c) every instrument (other than a bill of exchange [*] or promissory note) mentioned in that Schedule, which not having been previously executed by any person, is executed out of [India] on or after that day, relates to any property situate, or to any matter or thing done or, to be done, in [India] and is received in [India]:

Provided that no duty shall be chargeable in respect of
(1) any instrument executed by, or on behalf of, or in favour of, the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument;
(2) any instrument for the sale, transfer or other disposition, either absolutely or by way of mortgage or otherwise, of any ship or vessel, or any part, interest, share or property of or in any ship or vessel registered under the Merchant Shipping Act, 1894, or under Act XIX of 1838, or the Indian Registration of Ships Act, 1841 (57 and 58 Vict., c. 60. 10 of 1841), as amended by subsequent Acts.
[(3) any instrument executed, by, or, on behalf of, or, in favour of, the Developer, or Unit or in connection with the carrying out of purposes of the Special Economic Zone.
Explanation. For the purposes of this clause, the expressions Developer, Special Economic Zone and Unit shall have meanings respectively assigned to them in clause (g), (za) and (zc) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).]
3-A. Instruments chargeable with additional duty .[Repealed by the Refugee Relief Taxes Abolition Act, 1973 (13 of 1973), section 2 (w.e.f. 1-4-1973).]…
4. Several instruments used in single transaction of sale, mortgage or settlement .(1) Where, in the case of any sale, mortgage or settlement, several instruments are employed for completing the transaction, the principal instrument only shall be chargeable with the duty prescribed in Schedule I, for the conveyance, mortgage or settlement, and each of the other instruments shall be chargeable with a duty of one rupee instead of the duty (if any) prescribed for it in that Schedule.
(2) The parties may determine for themselves which of the instrument so employed shall, for the purposes of sub-section (1), be deemed to be the principal instrument:
Provided that the duty chargeable on the instrument so determined shall be the highest duty which would be chargeable in respect of any of the said instruments employed.
5. Instruments relating to several distinct matters .Any instrument comprising or relating to several distinct matters shall be chargeable with the aggregate amount of the duties with which separate instruments, each comprising or relating to one of such matters, would be chargeable under this Act.
6. Instruments coming within several descriptions in Schedule I .Subject to the provisions of the last preceding section, an instrument so framed as to come within two or more of the descriptions in Schedule I, shall, where the duties chargeable thereunder are different, be chargeable only with the highest of such duties:
Provided that nothing in this Act contained shall render chargeable with duty exceeding one rupee a counter part or duplicate of any instrument chargeable with duty and in respect of which the proper duty has been paid.
7. Policies of sea-insurance .[* * *]
(4) Where any sea-insurance is made for or upon a voyage and also for time, or to extend to or cover any time beyond thirty days after the ship shall have arrived at her destination and been there moored at anchor, the policy shall be charged with duty as a policy for or upon a voyage, and also with duty as a policy for time.
8. Bonds, debentures or other securities issued on loans under Act 11 of 1879 .(1) Notwithstanding anything contained in this Act, any local authority raising a loan under the provisions of the Local Authorities Loan Act, 1879 (11 of 1879), or of any other law for the time being in force, by the issue of bonds, debentures or other securities, shall, in respect of such loan, be chargeable with a duty of [one per centum] on the total amount of the bonds, debentures or other securities issued by it, and such bonds, debentures or other securities need not be stamped and shall not be chargeable with any further duty on renewal, consolidation, sub-division or otherwise.
(2) The provisions of sub-section (1) exempting certain bonds, debentures or other securities from being stamped and from being chargeable with certain further duty shall apply to the bonds, debentures or other securities of all outstanding loans of the kind mentioned therein, and all such bonds, debentures or other securities shall be valid, whether the same are stamped or not:
Provided that nothing herein contained shall exempt the local authority which has issued such bonds, debentures or other securities from the duty chargeable in respect thereof prior to the twenty-sixth day of March, 1897, when such duty has not already been paid or remitted by order issued by the Central Government.
(3) In the case of wilful neglect to pay the duty required by this section, the local authority shall be liable to forfeit to the Government a sum equal to ten per centum upon the amount of duty payable, and a like penalty for every month after the first month during which the neglect continues.
[8-A. Securities dealt in depository not liable to stamp duty .Notwithstanding anything contained in this Act or any other law for the time being in force,
(a) an issuer, by the issue of securities to one or more depositories shall, in respect of such issue, be chargeable with duty on the total amount of security issued by it and such securities need not be stamped;

(b) where an issuer issues certificate of security under sub-section (3) of section 14 of the Depositories Act, 1996 (22 of 1996), on such certificate duty shall be payable as is payable on the issue of duplicate certificate under this Act;

(c) the transfer of

(i) registered ownership of securities from a person to a depository or from a depository to a beneficial owner;

(ii) beneficial ownership of securities, dealt with by a depository;

(iii) beneficial ownership of units, such units being units of a Mutual Fund including units of the Unit Trust of India established under sub-section (1) of section 3 of the Unit Trust of India Act, 1963 (52 of 1963), dealt with by a depository,

shall not be liable to duty under this Act or any other law for the time being in force.
Explanation 1 For the purposes of this section, the expressions beneficial owner, depository and issuer, shall have the meanings respectively assigned to them in clauses (a), (e) and (f) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996).
Explanation 2 For the purposes of this section, the expression securities shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956).]
[8-B. Corporatisation and demutualisation schemes and related instruments not liable to duty .Notwithstanding anything contained in this Act or any other law for the time being in force,
(a) a scheme for corporatisation or demutualisation, or both of a recognised stock exchange; or

(b) any instrument, including an instrument of, or relating to, transfer of any property, business, asset whether movable or immovable, contract, right, liability and obligation, for the purpose of, or in connection with, the corporatisation or demutualisation, or both of a recognised stock exchange pursuant to a scheme,

as approved by the Securities and Exchange Board of India under sub-section (2) of section 4-B of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), shall not be liable to duty under this Act or any other law for the time being in force.
Explanation. For the purposes of this section,
(a) the expressions corporatisation, demutualisation and scheme shall have the meanings respectively assigned to them in clauses (aa), (ab) and (ga) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(b) Securities and Exchange Board of India means the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992)].

[8-C. Negotiable warehouse receipts not liable to stamp duty .Notwithstanding anything contained in this Act, negotiable warehouse receipts shall not be liable to stamp duty.]
[8E. Conversion of a branch of any bank into a wholly owned subsidiary of bank or transfer of shareholding of a bank to a holding company of bank not liable to duty. Notwithstanding anything contained in this Act or any other law for the time being in force,-
(a) conversion of a branch of a bank into a wholly owned subsidiary of the bank or transfer of shareholding of a bank to a holding company of the bank in terms of the scheme or guidelines of the Reserve Bank of India shall not be liable to duty under t his Act or any other law for the time being in force; or

(b) any instrument, including an instrument of, or relating to, transfer of any property, business, asset whether movable or immovable, contract, right, liability and obligation, for the purpose of, or in connection with, the conversion of a branch of a bank into a wholly owned subsidiary of the bank or transfer of shareholding of a bank to a holding company of the bank in terms of the scheme or guidelines issued by the Reserve Bank of India in this behalf, shall not be liable to duty under this Act or any other law for the time being in force.

Explanation.-
(i) For the purposes of this section, the expression “bank” means-

(a) “a banking company” as defined in clause (c) of section 5 of the Banking Regulation Act, 1949;

(b) “a corresponding new bank” as defined in clause (da) of section 5 of the Banking Regulation Act, 1949;

(c) “State Bank of India” constituted under section 3 of the State Bank of India Act, 1955;

(d) “a subsidiary bank” as defined in clause (k) of section 2 of the State Bank of India (Subsidiary Banks) Act, 1959;

(e) “a Regional Rural Bank” established under section 3 of the Regional Rural Banks Act, 1976;

(f) “a Co-operative Bank” as defined in clause (cci) of section 5 of the Banking Regulation Act, 1949;

(g) “a multi-State co-operative bank” as defined in clause (cciiia) of section 5 of the Banking Regulation Act, 1949;

(ii) For the purposes of this section, the expression the “Reserve Bank of India” means the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934.]

[8F. Agreement or document for transfer or assignment of rights or interest in financial assets not liable to stamp duty. – Notwithstanding anything contained in this Act or any other law for the time being in force, any agreement or other document for transfer or assignment of rights or interest in financial assets of banks or financial institutions under section 5 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in favour of any asset reconstruction company, as defined in clause (ba) of sub-section (1) of section 2 of that Act, shall not be liable to duty under this Act.]
9. Power to reduce, remit or compound duties .[(1)] [The [*] Government] may, by rule or order published in the Official Gazette,
(a) reduce or remit, whether prospectively or retrospectively, in the whole or any part of [the territories under its administration], the duties with which any instruments or any particular class of instruments, or any of the instruments belonging to such class, or any instruments when executed by or in favour of any particular class of persons, or by or in favour of any members of such class, are chargeable, and

(b) provide for the composition or consolidation of duties [of policies of insurance and] in the case of issues by any incorporated company or other body corporate [or of transfers (where there is a single transferee, whether incorporated or not)] of debentures, bonds or other marketable securities.

[(2) In this section, the expression the Government means,
(a) in relation to stamp-duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts, and in relation to any other stamp-duty chargeable under this Act and falling within Entry 96 in List I in the [Seventh Schedule to the Constitution, except the subject matters referred to in clause (b) of sub-section (1)], the Central Government;

(b) save as aforesaid, the State Government.]

B.Of stamps and the mode of using them

10. Duties how to be paid .(1) Except as otherwise expressly provided in this Act, all duties with which any instruments are chargeable shall be paid, and such payment shall be indicated on such instruments, by means of stamps
(a) according to the provisions herein contained; or

(b) when no such provision is applicable thereto as the [State Government] may by rule direct.

(2) The rules made under sub-section (1) may, among other matters, regulate,
(a) in the case of each kind of instrument the description of stamps which may be used;

(b) in the case of instruments stamped with impressed stamps the number of stamps which may be used;

(c) in the case of bills of exchange or promissory notes [* * *]the size of the paper on which they are written.

11. Use of adhesive stamps .The following instruments may be stamped with adhesive stamps, namely:
(a) instruments chargeable [with a duty not exceeding ten naye paise] except parts of bills of exchange payable otherwise than on demand and drawn in sets;

(b) bills of exchange [*] and promissory notes drawn or made out of [India];

(c) entry as an advocate, vakil or attorney on the roll of a High Court;

(d) notarial acts; and

(e) transfers by endorsement of shares in any incorporated company or other body corporate.

12. Cancellation of adhesive stamps .(1) (a) Whoever affixes any adhesive stamp to any instrument chargeable with duty which has been executed by any person shall, when affixing such stamp, cancel the same so that it cannot be used again; and
(b) whoever executes any instrument on any paper bearing an adhesive stamp shall, at the time of execution, unless such stamp has been already cancelled in manner aforesaid, cancel the same so that it cannot be used again.

(2) Any instrument bearing an adhesive stamp which has not been cancelled so that it cannot be used again, shall, so far as such stamp is concerned, be deemed to be unstamped.
(3) The person required by sub-section (1) to cancel an adhesive stamp may cancel it by writing on or across the stamp his name or initials or the name or initials of his firm with the true date of his so writing, or in any other effectual manner.
13. Instruments stamped with impressed stamps how to be written .Every instrument written upon paper stamped with an impressed stamp shall be written in such manner that the stamp may appear on the face of the instrument and cannot be used for or applied to any other instrument.
14. Only one instrument to be on same stamp .No second instrument chargeable with duty shall be written upon a piece of stamped paper upon which an instrument chargeable with duty has already been written:
Provided that nothing in this section shall prevent any endorsement which is duly stamped or is not chargeable with duty being made upon any instrument for the purpose of transferring any right created or evidenced thereby, or of acknowledging the receipt of any money or goods the payment or delivery of which is secured thereby.
15. Instrument written contrary to section 13 or 14 deemed unstamped .Every instrument written in contravention of section 13 or section 14 shall be deemed to be unstamped.
16. Denoting duty .Where the duty with which an instrument is chargeable, or its exemption from duty, depends in any manner upon the duty actually paid in respect of another instrument, the payment of such last-mentioned duty shall, if application is made in writing to the Collector for that purpose, and on production of both the instruments, be denoted upon such first-mentioned instrument by endorsement under the hand of the Collector or in such other manner (if any) as the [State Government] may by rule prescribe.
C.Of the time of stamping instruments

17. Instruments executed in India .All instruments chargeable with duty and executed by any person in [India] shall be stamped before or at the time of execution.
18. Instruments other than bills and notes executed out of [India] .(1) Every instrument chargeable with duty executed only out of India, and not being a bill of exchange [*] or promissory note, may be stamped within three months after it has been first received in [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 [State Government] may by rule prescribe, with a stamp of such value as the person so taking such instrument may require and pay for.
19. Bills and notes drawn out of India .The first holder in [India] of any bill of exchange [payable otherwise than on demand] [*] or promissory note drawn or made out of [India] shall, before he presents the same for acceptance or payment, or endorses, transfers or otherwise negotiates the same in [India], affix thereto the proper stamp and cancel the same:
Provided that
(a) if, at the time any such bill of exchange [*]or note comes into the hands of any holder thereof in [India], the proper adhesive stamp is affixed thereto and cancelled in manner prescribed by section 12, and such holder has no reason to believe that such stamp was affixed or cancelled otherwise than by the person and at the time required by this Act, such stamp shall, so far as relates to such holder, be deemed to have been duly affixed and cancelled;

(b) nothing contained in this proviso shall relieve any person from any penalty incurred by him for omitting to affix or cancel a stamp.

D.Of valuations for duty

20. Conversion of amount expressed in foreign currencies .(1) Where an instrument is chargeable with ad valorem duty in respect of any money expressed in any currency other than that of [India], such duty shall be calculated on the value of such money in the currency of [India] according to the current rate of exchange on the day of the date of the instrument.
(2) The [Central Government] may, from time to time, by notification in the Official Gazette, prescribe a rate of exchange for the conversion of British or any foreign currency into the currency of [India] for the purposes of calculating stamp-duty, and such rate shall be deemed to be the current rate for the purposes of sub-section (1).
21. Stock and marketable securities how to be valued .Where an instrument is chargeable with ad valorem duty in respect of any stock or of any marketable or other security, such duty shall be calculated on the value of such stock or security according to the average price or the value thereof on the day of the date of the instrument.
22. Effect of statement of rate of exchange or average price .Where an instrument contains a statement of current rate of exchange, or average price, as the case may require, and is stamped in accordance with such statement, it shall, so far as regards the subject-matter of such statement, be presumed, until the contrary is proved, to be duly stamped.
23. Instruments reserving interest .Where interest is expressly made payable by the terms of an instrument, such instrument shall not be chargeable with duty higher than that which it would have been chargeable had no mention of interest been made therein.
[23-A. Certain instruments connected with mortgages of marketable securities to be chargeable as agreements .(1) Where an instrument (not being a promissory note or bill of exchange)]
(a) is given upon the occasion of the deposit of any marketable security by way of security for money advanced or to be advanced by way of loan, or for an existing or future debt, or

(b) makes redeemable or qualifies a duly stamped transfer, intended as a security, of any marketable security,

it shall be chargeable with duty as if it were an agreement or memorandum of an agreement chargeable with duty under [Article No. 5(c) of Schedule I.
(2) A release or discharge of any such instrument shall only be chargeable with the like duty.]
24. How transfer in consideration of debt, or subject to future payment, etc., to be charged .Where any property is transferred to any person in consideration, wholly or in part, of any debt due to him, or subject either certainly or contingently to the payment or transfer of any money or stock, whether being or constituting a charge or incumbrance upon the property or not, such debt, money or stock is to be deemed the whole or part, as the case may be, of the consideration in respect whereof the transfer is chargeable with ad valorem duty:
Provided that nothing in this section shall apply to any such certificate of sale as is mentioned in Article No. 18 of Schedule I.
Explanation. In the case of a sale of property subject to a mortgage or other incumbrance, any unpaid mortgage-money or money charged, together with the interest (if any) due on the same, shall be deemed to be part of the consideration for the sale:
Provided that, where property, subject to a mortgage is transferred to the mortgagee, he shall be entitled to deduct from the duty payable on the transfer the amount of any duty already paid in respect of the mortgage.
Illustrations
(1) A owes B Rs. 1,000. A sells a property to B, the consideration being Rs. 500 and the release of the previous debt of Rs. 1,000. Stamp duty is payable on Rs. 1,500.
(2) A sells a property to B for Rs. 500 which is subject to a mortgage to C for Rs. 1,000 and unpaid interest Rs. 200. Stamp duty is payable on Rs. 1,700.
(3) A mortgages a house of the value of Rs. 10,000 to B for Rs. 5,000. B afterwards buys the house from A. Stamp duty is payable on Rs. 10,000 less the amount of stamp duty already paid for the mortgage.
25. Valuation in case of annuity, etc .Where an instrument is executed to secure the payment of an annuity or other sum payable periodically, or where the consideration for a conveyance is an annuity or other sum payable periodically, the amount secured by such instrument or the consideration for such conveyance, as the case may be, shall, for the purposes of this Act, be deemed to be
(a) where the sum is payable for a definite period so that the total amount to be paid can be previously ascertained such total amount;

(b) where the sum is payable in perpetuity or for an indefinite time not terminable with any life in being at the date of such instrument or conveyance the total amount which, according to the terms of such instrument or conveyance, will or may be payable during the period of twenty years calculated from the date on which the first payment becomes due; and

(c) where the sum is payable for an indefinite time terminable with any life in being at the date of such instrument or conveyance the maximum amount which will or may be payable as aforesaid during the period of twelve years calculated from the date on which the first payment becomes due.

26. Stamp where value of subject-matter is indeterminate .Where the amount or value of the subject-matter of any instrument chargeable with ad valorem duty cannot be, or (in the case of an instrument executed before the commencement of this Act) could not have been, ascertained at the date of its execution or first execution, nothing shall be claimable under such instrument more than the highest amount or value for which, if stated in an instrument of the same description, the stamp actually used would, at the date of such execution, have been sufficient:
[Provided that, in the case of the lease of a mine in which royalty or a share of the produce is received as the rent or part of the rent, it shall be sufficient to have estimated such royalty or the value of such share, for the purpose of stamp duty,
(a) when the lease has been granted by or on behalf of [the Government], at such amount or value as the Collector may, having regard to all the circumstances of the case, have estimated as likely to be payable by way of royalty or share to [the Government] under the lease, or

(b) when the lease has been granted by any other person, at twenty thousand rupees a year,

and the whole amount of such royalty or share, whatever it may be, shall be claimable under such lease:]
Provided also that, where proceedings have been taken in respect of an instrument under section 31 or 41, the amount certified by the Collector shall be deemed to be the stamp actually used at the date of execution.
27. Facts affecting duty to be set forth in instrument .The consideration (if any) and all other facts and circumstances affecting the charge-ability of any instrument with duty, or the amount of the duty with which it is chargeable, shall be fully and truly set forth therein.
28. Direction as to duty in case of certain conveyances .(1) Where any property has been contracted to be sold for one consideration for the whole, and is conveyed to the purchaser in separate parts by different instruments, the consideration shall be apportioned in such manner as the parties think fit, provided that a distinct consideration for each separate part is set forth in the conveyance relating thereto, and such conveyance shall be chargeable with ad valorem duty in respect of such distinct consideration.
(2) Where property contracted to be purchased for one consideration for the whole, by two or more persons jointly, or by any person for himself and others, or wholly for others, is conveyed in parts by separate instruments to the persons by or for whom the same was purchased, for distinct parts of the consideration, the conveyance of each separate part shall be chargeable with ad valorem duty in respect of the distinct part of the consideration therein specified.
(3) Where a person, having contracted for the purchase of any property but not having obtained a conveyance thereof, contracts to sell the same to any other person and the property is in consequence conveyed immediately to the sub-purchaser, the conveyance shall be chargeable with ad valorem duty in respect of the consideration for the sale by the original purchaser to the sub-purchaser.
(4) Where a person, having contracted for the purchase of any property but not having obtained a conveyance thereof, contracts to sell the whole, or any part thereof, to any other person or persons, and the property is in consequence conveyed by the original seller to different persons in parts, the conveyance of each part sold to sub-purchaser shall be chargeable with ad valorem duty in respect only of the consideration paid by such sub-purchaser, without regard to the amount or value of the original consideration; and the conveyance of the residue (if any) of such property to the original purchaser shall be chargeable with ad valorem duty in respect only of the excess of the original consideration over the aggregate of the considerations paid by the sub-purchaser:
Provided that the duty on such last-mentioned conveyance shall in no case be less than one rupee.
(5) Where a sub-purchaser takes an actual conveyance of the interest of the person immediately selling to him, which is chargeable with ad valorem duty in respect of the consideration paid by him and is duly stamped accordingly, any conveyance to be afterwards made to him of the same property by the original seller shall be chargeable with a duty equal to that which would be chargeable on a conveyance for the consideration obtained by such original seller, or, where such duty would exceed five rupees, with a duty of five rupees.
E.Duty by whom payable

29. Duties by whom payable .In the absence of an agreement to the contrary, the expense of providing the proper stamp shall be borne,
(a) in the case of any instrument described in any of the following articles of Schedule I, namely:

No. 2 (Administration Bond),
[No. 6 (Agreement relating to Deposit of Title-deeds, Pawn or Pledge),]
No. 13 (Bill of Exchange),
No. 15 (Bond),
No. 16 (Bottomry Bond),
No. 26 (Customs Bond),
No. 27 (Debenture),
No. 32 (Further charge),
No. 34 (Indemnity Bond),
No. 40 (Mortgage-deed),
No. 49 (Promissory-note),
No. 55 (Release),
No. 56 (Respondentia Bond),
No. 57 (Security-bond or Mortgage-deed),
No. 58 (Settlement),
No. 62(a) (Transfer of shares, in an incorporated Company or other body corporate),
No. 62(b) (Transfer of debentures, being marketable securities, whether the debenture is liable to duty or not, except debentures provided for by section 8),
No. 62(c) (Transfer of any interest secured by a bond, mortgage-deed or policy of insurance),
by the person drawing, making or executing such instrument;
[(b) in the case of a policy of insurance other than fire-insurance by the person effecting the insurance;

(bb) in the case of a policy of fire-insurance by the person issuing the policy;]

(c) in the case of a conveyance (including a reconveyance of mortgaged property)by the grantee; in the case of a lease or agreement to leaseby the lessee or intended lessee;

(d) in the case of a counterpart of a lease by the lessor;

(e) in the case of an instrument of exchange by the parties in equal shares;

(f) in the case of a certificate of sale by the purchaser of the property to which such certificate relates; and

(g) in the case of an instrument of partition by the parties thereto in proportion to their respective shares in the whole property partitioned, or when the partition is made in execution of an order passed by a revenue-authority or civil Court or arbitrator, in such proportion as such authority, Court or arbitrator directs.

30. Obligation to give receipt in certain cases .Any person receiving any money exceeding twenty rupees in amount, or any bill of exchange, cheque or promissory note for an amount exceeding twenty rupees, or receiving in satisfaction or part satisfaction of a debt any movable property exceeding twenty rupees in value, shall, on demand by the person paying or delivering such money, bill, cheque, note or property, give a duly stamped receipt for the same.
[Any person receiving or taking credit for any premium or consideration for any renewal of any contract of fire-insurance, shall, within one month after receiving or taking credit for such premium or consideration, give a duly stamped receipt for the same.]
CHAPTER III

Adjudication As To Stamps

31. Adjudication as to proper stamp .(1) When any instrument, whether executed or not and whether previously stamped or not, is brought to the Collector, and the 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 Collector shall determine the duty (if any) with which, in his judgment, the instrument is chargeable.
(2) 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 prove that all the facts and circumstances affecting the charge-ability of the instrument with duty, or the amount of the duty with which it is chargeable, are fully and truly set forth therein, and may refuse to proceed upon any such application until such abstract and evidence have been furnished accordingly:
Provided that
(a) no evidence furnished in pursuance of this section shall be used against any person in any civil proceeding, except in an inquiry as to the duty with which the instrument to which it relates is chargeable; and

(b) every person by whom any such evidence is furnished shall, on payment of the full duty with which the instrument to which it relates, is chargeable, be relieved from any penalty which he may have incurred under this Act by reason of the omission to state truly in such instrument any of the facts or circumstances aforesaid.

32. Certificate by Collector .(1) When an instrument brought to the Collector under section 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 section 31, 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,

the Collector shall certify by endorsement on such instrument that the full duty (stating the amount) with which it is chargeable has been paid.
(2) When such instrument is, in his opinion, not chargeable with duty, the Collector shall certify in manner aforesaid that such instrument is not so chargeable.
(3) 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 authorise the Collector to endorse
(a) any instrument executed or first executed in [India] and brought to him after the expiration of one month from the date of its execution or first execution, as the case may be;

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

(c) any instrument chargeable [with a duty not exceeding ten naye paise] or any bill of exchange or promissory, note, when brought to him, after the drawing or execution thereof, on paper not duly stamped.

CHAPTER IV

Instruments Not Duly Stamped

33. Examination and impounding of instruments .(1) 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.
(2) 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 India when such instrument was executed or first executed:
Provided that
(a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the [Code of Criminal Procedure, 1898 (5 of 1898)];

(b) in the case of a Judge of a High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf.

(3) For the purposes of this section, in cases of doubt,
(a) [the [State Government]] may determine what offices shall be deemed to be public offices; and

(b) [the [State Government]] may determine who shall be deemed to be persons in charge of public offices.

34. Special provision as to unstamped receipts .Where any receipt chargeable [with a duty not exceeding ten naye paise] is tendered to or produced before any officer unstamped in the course of the audit of any public account, such officer may, in his discretion instead of impounding the instrument, require a duly stamped receipt to be substituted therefor.
35. Instruments not duly stamped inadmissible in evidence, etc .No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped:
Provided that
(a) any such instrument [shall] be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion;

(b) where any person from whom a stamped receipt could have been demanded, has given an unstamped receipt and such receipt, if stamped, would be admissible in evidence against him, then such receipt shall be admitted in evidence against him on payment of a penalty of one rupee by the person tendering it;

(c) where a contract or agreement of any kind is effected by correspondence consisting of two or more letters and any one of the letters bears the proper stamp, the contract or agreement shall be deemed to be duly stamped;

(d) nothing herein contained shall prevent the admission of any instrument in evidence in any proceeding in a criminal Court, other than a proceeding under Chapter XII or Chapter XXXVI of the [Code of Criminal Procedure, 1898 (5 of 1898)];

(e) nothing herein contained shall prevent the admission of any instrument in any Court when such instrument has been executed by or on behalf of the Government, or where it bears the certificate of the Collector as provided by section 32 or any other provision of this Act.

36. Admission of instrument where not to be questioned .Where an instrument has been admitted in evidence, such admission shall not, except as provided in section 61, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped.
37. Admission of improperly stamped instruments .[The [State Government]] may make rules providing that, where an instrument bears a stamp of sufficient amount but of improper description, it may, on payment of the duty with which the same is chargeable, be certified to be duly stamped, and any instrument so certified shall then be deemed to have been duly stamped as from the date of its execution.
38. Instruments impounded, how dealt with .(1) When the person impounding an instrument under section 33 has by law or consent of parties authority to receive evidence and admits such instrument in evidence upon payment of a penalty as provided by section 35 or of duty as provided by section 37, he shall send to the Collector an authenticated copy of such instrument, together with a certificate in writing, stating the amount of duty and penalty levied in respect thereof, and shall send such amount to the Collector, or to such person as he may appoint in this behalf.
(2) In every other case, the person so impounding an instrument shall send it in original to the Collector.
39. Collectors power to refund penalty paid under section 38, sub-section (1) .(1) When a copy of an instrument is sent to the Collector under section 38, sub-section (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 section 13 or section 14, the Collector may refund the whole penalty so paid.
40. Collectors power to stamp instruments impounded .(1) When the Collector impounds any instrument under section 33, or receives any instrument sent to him under section 38, sub-section (2), not being an instrument chargeable [with a duty not exceeding ten naye paise] only or a bill of exchange or promissory note, 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 the five rupees, or, if he thinks fit, [an amount not exceeding] ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees:

Provided that, when such instrument has been impounded only because it has been written in contravention of section 13 or section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section.
(2) Every certificate under clause (a) of sub-section (1) shall, for the purposes of this Act, be conclusive evidence of the matter stated therein.
(3) Where an instrument has been sent to the Collector under section 38, sub-section (2), the Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer.
41. Instruments unduly stamped by accident .If any instrument chargeable with duty and not duly stamped, not being an instrument chargeable [with a duty not exceeding ten naye paise] only or a bill of exchange or promissory note, is produced by any person of his own motion before the Collector within one year from the date of its execution or first execution, and such person brings to the notice of the Collector the fact that such instrument is not duly stamped and offers to pay the Collector the amount of the proper duty, or the amount required to make up the same, and the Collector is satisfied that the omission to duly stamp such instrument has been occasioned by accident, mistake or urgent necessity, he may, instead of proceeding under sections 33 and 40, receive such amount and proceed as next hereinafter prescribed.
42. Endorsement of instruments on which duty has been paid under section 35, 40 or 41 .(1) When the duty and penalty (if any) leviable in respect of any instrument have been paid under section 35, section 40 or section 41, the person admitting such instrument in evidence or the Collector, as the case may be, shall certify by endorsement thereon that the proper duty or, as the case may be, the proper duty and penalty (stating the amount of each) have been levied in respect thereof and the name and residence of the person paying them.
(2) Every instrument so endorsed shall thereupon be admissible in evidence, and may be registered an acted upon and authenticated as if it had been duly stamped, and shall be delivered on his application in this behalf to the person from whose possession it came into the hands of the officer impounding it, or as such person may direct:
Provided that
(a) no instrument which has been admitted in evidence upon payment of duty and a penalty under section 35, shall be so delivered before the expiration of one month from the date of such impounding, or if the Collector has certified that its further detention is necessary and has not cancelled such certificate;

(b) nothing in this section shall affect the [Code of Civil Procedure (14 of 1882)], section 144, clause 3.

43. Prosecution for offence against Stamp-law .The taking of proceeding or the payment of a penalty under this Chapter in respect of any instrument shall not bar the prosecution of any person who appears to have committed an offence against the Stamp-law in respect of such instrument:
Provided that no such prosecution shall be instituted in the case of any instrument in respect of which such a penalty has been paid, unless it appears to the Collector that the offence was committed with an intention of evading payment of the proper duty.
44. Persons paying duty or penalty may recover same in certain cases .(1) When any duty or penalty has been paid under section 35, section 37, section 40 or section 41, by any person in respect of an instrument, and, by agreement or under the provisions of section 29 or any other enactment in force at the time such instrument was executed, some other person was bound to bear the expense of providing the proper stamp for such instrument, the first-mentioned person shall be entitled to recover from such other person the amount of the duty or penalty so paid.
(2) For the purpose of such recovery any certificate granted in respect of such instrument under this Act shall be conclusive evidence of the matters therein certified.
(3) Such amount may, if the Court thinks fit, be included in any order as to costs in any suit or proceeding to which such persons are parties and in which such instrument has been tendered in evidence. If the Court does not include the amount in such order, no further proceedings for the recovery of the amount shall be maintainable.
45. Power to revenue-authority to refund penalty or excess duty in certain cases .(1) Where any penalty is paid under section 35 or section 40, the Chief Controlling Revenue-authority may, upon application in writing made within one year from the date of the payment, refund such penalty wholly or in part.
(2) Where, in the opinion of the Chief Controlling Revenue-authority, stamp duty in excess of that which is legally chargeable has been charged and paid under section 35 or section 40, such authority may, upon application in writing made within three months of the order charging the same, refund the excess.
46. Non-liability for loss of instruments sent under section 38 .(1) If any instrument sent to the Collector under section 38, sub-section (2), is lost, destroyed or damaged during transmission, the person sending the same shall not be liable for such loss, destruction or damage.
(2) When any instrument is about to be so sent, the person from whose possession it came into the hands of the person impounding the same, may require a copy thereof to be made at the expense of such first-mentioned person and authenticated by the person impounding such instrument.
47. Power of payer to stamp bills and promissory notes received by him unstamped .When any bill of exchange [or promissory note] chargeable [with a duty not exceeding ten naye paise] is presented for payment unstamped, the person to whom it is so presented, may affix thereto the necessary adhesive stamp, and, upon cancelling the same in manner herein before provided, may pay the sum payable upon such bill [or note], and may charge the duty against the person who ought to have paid the same, or deduct it from the sum payable as aforesaid, and such bill [or note] shall, so far as respects the duty, be deemed good and valid:
Provided that nothing herein contained shall relieve any person from any penalty or proceeding to which he may be liable in relation to such bill or note.
48. Recovery of duties and penalties .All duties, penalties and other sums required to be paid under this Chapter may be recovered by the Collector by distress and sale of the movable property of the person from whom the same are due, or by any other process for the time being in force for the recovery of arrears of land-revenue.
CHAPTER V

Allowances For Stamps In Certain Cases

49. Allowance for spoiled stamps .Subject to such rules as may be made by [the [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 section 50, and if he is satisfied as to the facts, make allowance for impressed stamps spoiled in the cases hereinafter mentioned, namely:
(a) the stamp on any paper inadvertently and undesignedly 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

(1) the stamp on [any such bill of exchange] [* *] 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;
(2) 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;
(3) the stamp used or intended to be used for [any 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;
(d) the stamp used for an instrument executed by any party thereto which

(1) has been afterwards found to be absolutely void in law from the beginning;
(2) has been afterwards found unfit, by reason of any error or mistake therein for the purpose originally intended;
(3) by reason of the death of any person by whom it is necessary that it should be executed, without having executed the same, or of the refusal of any such person to execute the same, cannot be completed so as to effect the intended transaction in the form proposed;
(4) for want of the execution thereof by some material party, and his inability or refusal to sign the same, is in fact incomplete and insufficient for the purpose for which it was intended;
(5) by reason of the refusal of any person to act under the same, or to advance any money intended to be thereby secured, or by the refusal or non-acceptance of any office thereby granted, totally fails of the intended purpose;
(6) becomes useless in consequence of the transaction intended to be thereby effected being effected by some other instrument between the same parties and bearing a stamp of not less value;
(7) is deficient in value and the transaction intended to be thereby effected has been effected by some other instrument between the same parties and bearing a stamp of not less value;
(8) is inadvertently and undesignedly spoiled, and in lieu whereof another instrument made between the same parties and for the same purpose is executed and duly stamped:
Provided that, in the case of an executed instrument, no legal proceeding has been commenced in which the instrument could or would have been given or offered in evidence and that the instrument is given up to be cancelled.
Explanation. The certificate of the Collector under section 32 that the full duty with which an instrument is chargeable, has been paid is an impressed stamp within the meaning of this section.
50. Application for relief under section 49 when to be made .The application for relief under section 49 shall be made within the following periods, that is to say,
(1) in the cases mentioned in clause (d)(5), within two months of the date of the instrument;
(2) in the case of a stamped paper on which no instrument has been executed by any of the parties thereto, within six months after the stamp has been spoiled;
(3) in the case of a stamped paper in which an instrument has been executed by any of the parties thereto, 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:
Provided that,
(a) when the spoiled instrument has been for sufficient reasons, sent out of [India], the application may be made within six months after it has been received back in [India];

(b) when, from unavoidable circumstances, any instrument for which another instrument has been substituted, cannot be given up to be cancelled within the aforesaid period, the application may be made within six months after the date of execution of the substituted instrument.

51. Allowance in case of printed forms no longer required by Corporations .The Chief Controlling Revenue-authority [or the Collector, if empowered by the Chief Controlling Revenue-authority in this behalf], may, without limit of time, make allowance for stamped papers used for printed forms of instruments [by any banker or] by any incorporated company or other body corporate, if for any sufficient reason such forms have ceased to be required by the said [banker], company or body corporate: provided that such authority is satisfied that the duty in respect of such stamped papers has been duly paid.
52. 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 section 15, owing to such instrument having been written in contravention of the provisions of section 13,

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.
53. Allowance for spoiled or misused stamps how to be made .In any case in which allowance is made for spoiled or misused stamps, the Collector may give in lieu thereof
(a) other stamps of the same description and value; or

(b) if required and he thinks fit, stamps of any other description to the same amount in value; or

(c) at his discretion, the same value in money, deducting [ten naye paise] for each rupee or fraction of a rupee.

54. Allowance for stamps not required for use .When any person is possessed of a stamp or stamps which have not been spoiled or rendered unfit or useless for the purpose intended, but for which he has no immediate use, the Collector shall repay to such person the value of such stamp or stamps in money, deducting [ten naye paise] for each rupee or portion of a rupee, upon such person delivering up the same to be cancelled and proving to the Collectors satisfaction
(a) that such stamp or stamps were purchased by such person with a bona fide intention to use them; and

(b) that he has paid the full price thereof; and

(c) that they were so purchased within the period of six months next preceding the date on which they were so delivered:

Provided that, where the person is a licensed vendor of stamps, the Collector may, if he thinks fit, make the repayment of the sum actually paid by the vendor without any such deduction as aforesaid.
[54-A. Allowances for stamps in denominations of annas .Notwithstanding anything contained in section 54, when any person is possessed of a stamp or stamps in any denominations other than in denominations of annas four or multiples thereof and such stamp or stamps has or have not been spoiled, the Collector shall repay to such person the value of such stamp or stamps in money calculated in accordance with the provisions of sub-section (2) of section 14 of the Indian Coinage Act, 1906 (3 of 1906), upon such person delivering up, within six months from the commencement of the Indian Stamp (Amendment) Act, 1958, such stamp or stamps to the Collector.]
[54-B. Allowances for Refugee Relief Stamps .Notwithstanding anything contained in section 54, when any person is possessed of stamps bearing the inscription Refugee Relief (being stamps issued in pursuance of section 3-A before its omission) and such stamps have not been spoiled, the Collector shall, upon such person delivering up, within six months from the commencement of the Refugee Relief Taxes (Abolition) Act, 1973 (13 of 1973), such stamps to the Collector, refund to such person the value of such stamps in money or give in lieu thereof other stamps of the same value:
Provided that the State Government may, with a view to facilitating expeditious disposal of claims for such refunds, specify, in such manner as it deems fit, any other procedure which may also be followed for claiming such refunds.]
55. Allowance or renewal of certain debentures .When any duly stamped debenture is renewed by the issue of a new debenture in the same terms, the Collector shall, upon application made within one month, repay to the person issuing such debenture, the value of the stamp on the original or on the new debenture, whichever shall be less:
Provided that the original debenture is produced before the Collector and cancelled by him in such manner as the State Government may direct.
Explanation. A debenture shall be deemed to be renewed in the same terms within the meaning of this section notwithstanding the following changes:
(a) the issue of two or more debentures in place of one original debenture, the total amount secured being the same;

(b) the issue of one debenture in place of two or more original debentures, the total amount secured being the same;

(c) the substitution of the name of the holder at the time of renewal for the name of the original holder; and

(d) the alteration of the rate of interest or the dates of payment thereof.

CHAPTER VI

Reference And Revision

56. Control of, and statement of case to, Chief Controlling Revenue-authority .(1) The powers exercisable by a Collector under Chapter IV and Chapter V [and under clause (a) of the first proviso to section 26] shall in all cases be subject to the control of the Chief Controlling Revenue-authority.
(2) If any Collector, acting under section 31, section 40 or section 41, feels doubt as to the amount of duty with which any instrument is chargeable, he may draw up a statement of the case, and refer it, with his own opinion thereon, for the decision of the Chief Controlling Revenue-authority.
(3) Such authority shall consider the case and send a copy of its decision to the Collector, who shall proceed to assess and charge the duty (if any) in conformity with such decision.
57. Statement of case by Chief Controlling Revenue-authority to High Court .(1) The Chief Controlling Revenue-authority may state any case referred to it under section 56, sub-section (2), or otherwise coming to its notice, and refer such case with its own opinion thereon,
[(a) if it arises in a State, to the High Court for that State;

[(b) if it arises in the Union territory of Delhi, to the High Court of Delhi;]

[* * *]

[(c) if it arises in the Union territory of Arunachal Pradesh or Mizoram, to the Gauhati High Court (the High Court of Assam, Nagaland, Meghalaya, Manipur and Tripura);]

(d) if it arises in the Union territory of the Andaman and Nicobar Islands, to the High Court at Calcutta; [*]

(e) if it arises in the Union territory of [Lakshadweep] Islands, to the High Court of Kerala;]

[(ee) if it arises in the Union territory of Chandigarh, to the High Court of Punjab and Haryana;]

[(f) if it arises in the Union territory of Dadra and Nagar Haveli, to the High Court of Bombay.]

(2) Every such case shall be decided by not less than three Judges of the High Court [* * *] to which it is referred, and in case of difference the opinion of the majority shall prevail.
58. Power of High Court to call for further particulars as to case stated .If the High Court [* * *] is not satisfied that the statements contained in the case are sufficient to enable to determine the questions raised thereby, the Court may refer the case back to the Revenue-authority by which it was stated, to make such additions thereto or alterations therein as the Court may direct in that behalf.
59. Procedure in disposing of case stated .(1) The High Court [* * *] upon the hearing of any such case, shall decide the questions raised thereby, and shall deliver its judgment thereon containing the grounds on which such decision is founded.
(2) The Court shall send to the Revenue-authority by which the case was stated, a copy of such judgment under the seal of the Court and the signature of the Registrar; and the Revenue-authority shall, on receiving such copy, dispose of the case conformably to such judgment.
60. Statement of case by other Courts to High Court .(1) If any Court, other than a Court mentioned in section 57, feels doubt as to the amount of duty to be paid in respect of any instrument under proviso (a) to section 35, the Judge may draw up a statement of the case and refer it, with his own opinion thereon, for the decision of the High Court [* * *] to which, if he were the Chief Controlling Revenue-authority, he would, under section 57, refer the same.
(2) Such Court shall deal with the case as if it had been referred under section 57, and send a copy of its judgment under the seal of the Court and the signature of the Registrar to the Chief Controlling Revenue-authority and another like copy to the Judge making the reference, who shall, on receiving such copy, dispose of the case conformably to such judgment.
(3) References made under sub-section (1), when made by a Court subordinate to a District Court, shall be made through the District Court, and, when made by any subordinate Revenue Court, shall be made through the Court immediately superior.
61. Revision of certain decisions of Courts regarding the sufficiency of stamps .(1) When any Court in the exercise of its civil or revenue jurisdiction or any criminal Court in any proceeding under Chapter XII or Chapter XXXVI of the [Code of Criminal Procedure, 1898 (5 of 1898)], makes any order admitting any instrument in evidence as duly stamped or as not requiring a stamp, or upon payment of duty and a penalty under section 35, the Court to which appeals lie from, or references are made by, such first-mentioned Court may, of its own motion or on the application of the Collector, take such order into consideration.
(2) If such Court, after such consideration, is of opinion that such instrument should not have been admitted in evidence without the payment of duty and penalty under section 35, or without the payment of a higher duty and penalty than those paid, it may record a declaration to that effect, and determine the amount of duty with which such instrument is chargeable, and may require any person in whose possession or power such instrument then is, to produce the same, and may impound the same when produced.
(3) When any declaration has been recorded under sub-section (2), the Court recording the same shall send a copy thereof to the Collector, and, where the instrument to which it relates has been impounded or is otherwise in the possession of such Court, shall also send him such instrument.
(4) The Collector may thereupon, notwithstanding anything contained in the order admitting such instrument in evidence, or in any certificate granted under section 42, or in section 43, prosecute any person for any offence against the Stamp-law which the Collector considers him to have committed in respect of such instrument:
Provided that
(a) no such prosecution shall be instituted where the amount (including duty and penalty) which, according to the determination of such Court, was payable in respect of the instrument under section 35, is paid to the Collector, unless he thinks that the offence was committed with an intention of evading payment of the proper duty;

(b) except for the purposes of such prosecution, no declaration made under this section shall affect the validity of any order admitting any instrument in evidence, or of any certificate granted under section 42.

CHAPTER VII

Criminal Offences And Procedure

62. Penalty for executing, etc., instrument not duly stamped .(1) Any person
(a) drawing, making, issuing, endorsing, or transferring, or signing otherwise than as a witness, or presenting for acceptance or payment, or accepting, paying or receiving payment of or in any manner negotiating, any bill of exchange [payable otherwise than on demand], [*] or promissory note without the same being duly stamped; or

(b) executing or signing otherwise than as a witness any other instrument chargeable with duty without the same being duly stamped; or

(c) voting or attempting to vote under any proxy not duly stamped,

shall, for every such offence, be punishable with fine which may extend to five hundred rupees:
Provided that, when any penalty has been paid in respect of any instrument under section 35, section 40 or section 61, the amount of such penalty shall be allowed in reduction of the fine (if any) subsequently imposed under this section in respect of the same instrument upon the person who paid such penalty.
(2) If a share warrant is issued without being duly stamped, the company issuing the same, and also every person who, at the time when it is issued, is the managing director or secretary or other principal officer of the company, shall be punishable with fine which may extend to five hundred rupees.
63. Penalty for failure to cancel adhesive stamp .Any person required by section 12 to cancel an adhesive stamp, and failing to cancel such stamp in manner prescribed by that section, shall be punishable with fine which may extend to one hundred rupees.
64. Penalty for omission to comply with provisions of section 27 .Any person who, with intent to defraud the Government,
(a) executes any instrument in which all the facts and circumstances required by section 27 to be set forth in such instrument are not fully and truly set forth; or

(b) being employed or concerned in or about the preparation of any instrument, neglects or omits fully and truly to set forth therein all such facts and circumstances; or

(c) does any other act calculated to deprive the Government of any duty or penalty under this Act,

shall be punishable with fine which may extend to five thousand rupees.
65. Penalty for refusal to give receipt, and for devices to evade duty on receipts .Any person, who
(a) being required under section 30 to give a receipt, refuses or neglects to give the same; or

(b) with intent to defraud the Government of any duty, upon a payment of money or delivery of property exceeding twenty rupees in amount or value, gives a receipt for an amount or value not exceeding twenty rupees, or separates or divides the money or property paid or delivered,

shall be punishable with fine which may extend to one hundred rupees.
66. Penalty for not making out policy, or making one not duly stamped .Any person who
(a) receives, or takes credit for, any premium or consideration for any contract of insurance and does not, within one month after receiving, or taking credit for, such premium or consideration, make out and execute a duly stamped policy of such insurance; or

(b) makes, executes or delivers out any policy which is not duly stamped, or pays or allows in account, or agrees to pay or allow in account, any money upon, or in respect of, any such policy,

shall be punishable with fine which may extend to two hundred rupees.
67. Penalty for not drawing full number of bills or marine policies purporting to be in sets .Any person drawing or executing a bill of exchange [payable otherwise than on demand] or a policy of marine insurance purporting to be drawn or executed in a set of two or more, and not at the same time drawing or executing on paper duly stamped the whole number of bills or policies of which such bill or policy purports the set to consist, shall be punishable with fine which may extend to one thousand rupees.
68. Penalty for post-dating bills, and for other devices to defraud the revenue .Any person who,
(a) with intent to defraud the Government of duty, draws, makes or issues any bill of exchange or promissory note bearing a date subsequent to that on which such bill or note, is actually drawn or made; or

(b) knowing that such bill or note has been so post-dated, endorses, transfers, presents for acceptance or payment, or accepts, pays or receives payment of, such bill or note, or in any manner negotiates the same; or

(c) with the like intent, practises or is concerned in any act, contrivance or device not specially provided for by this Act or any other law for the time being in force,

shall be punishable with fine which may extend to one thousand rupees.
69. Penalty for breach of rule relating to sale of stamps and for unauthorized sale .(a) Any person appointed to sell stamps who disobeys any rule made under section 74; and
(b) any person not so appointed who sells or offers for sale any stamp (other than a [ten naye paise or five naye paise] adhesive stamp),

shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both.
70. Institution and conduct of prosecutions .(1) No prosecution in respect of any offence punishable under this Act or any Act hereby repealed, shall be instituted without the sanction of the Collector or such other officer as [the [State Government]] generally, or the Collector specially, authorises in that behalf.
(2) The Chief Controlling Revenue-authority, or any officer generally or specially authorised by it in this behalf, may stay any such prosecution or compound any such offence.
(3) The amount of any such composition shall be recoverable in the manner provided by section 48.
71. Jurisdiction of Magistrates .No Magistrate other than a Presidency Magistrate or a Magistrate whose powers are not less than those of a Magistrate of the second class, shall try any offence under this Act.
72. Place of trial .Every such offence committed in respect of any instrument may be tried in any district or presidency-town in which such instrument is found, as well as in any district or presidency-town in which such offence might be tried under the Code of Criminal Procedure for the time being in force.
CHAPTER VIII

Supplemental Provisions

73. Books, etc., to be open to inspection .Every public officer having in his custody any registers, books, records, papers, documents or proceedings, the inspection whereof may tend to secure any duty, or to prove or lead to the discovery of any fraud or omission in relation to any duty, shall at all reasonable times permit any person authorised in writing by the Collector to inspect for such purpose the registers, books, papers, documents and proceedings, and to take such notes and extracts as he may deem necessary, without fee or charge.
74. Powers to make rules relating to sale of stamps .The [State Government] [* * *]make rules for regulating
(a) the supply and sale of stamps and stamped papers,

(b) the persons by whom alone such sale is to be conducted, and

(c) the duties and remuneration of such persons:

Provided that such rules shall not restrict the sale of [ten naye paise or five naye paise] adhesive stamps.
75. Power to make rules generally to carry out Act .The [State Government] may make rules to carry out generally the purposes of this Act, and may by such rules prescribe the fines, which shall in no case exceed five hundred rupees, to be incurred on breach thereof.
76. Publication of rules .[(1) All rules made under this Act shall be published in the Official Gazette.]
(2) All rules published as required by this section shall, upon such publication, have effect as if enacted by this Act.
[(3) Every rule made by the State Government under this Act shall be laid, as soon as may be after it is made, before the State Legislature.]
[76-A. Delegation of certain powers .[[* * *] The State Government may, by notification in the Official Gazette], delegate
(a) all or any of the powers conferred on it by sections 2(9), 33(3)(b), 70(1), 74 and 78 to the Chief Controlling Revenue-authority, and

(b) all or any of the powers conferred on the Chief Controlling Revenue-authority by sections 45(1), (2), 56(1) and 70(2) to such subordinate Revenue-authority as may be specified in the notification.]

77. Saving as to Court-fees .Nothing in this Act contained shall be deemed to affect the duties chargeable under any enactment for the time being in force relating to Court-fees.
[77-A. Saving as to certain stamps .All stamps in denominations of annas four or multiples thereof shall be deemed to be stamps of the value of twenty-five naye paise or, as the case may be, multiples thereof and shall, accordingly, be valid for all the purposes of this Act.]
78. Act to be translated and sold cheaply .Every State Government shall make provision for the sale of translations of this Act in the principal vernacular languages of the territories administered by it at a price not exceeding [twenty-five naye paise] per copy.
79. Repeal .[Repealed by the Repealing and Amending Act, 1914 (10 of 1914), section 3 and Schedule II.]…


SCHEDULE I

STAMP-DUTY ON INSTRUMENTS

(See Section 3 )

Description of Instrument Proper Stamps Duty
1. ACKNOWLEDGEMENT of a debt exceeding twenty rupees in amount or value, written or signed by, or on behalf of, a debtor or in order to supply evidence of such debt in any book (other than a banker’s pass-book) or on a separate piece of paper when such book or paper is left in the creditor’s possession: Provided that such acknowledgement does not contain any promise to pay the debt or any stipulation to pay interest or to deliver any goods or other property. Fifty Rupees
2. ADMINISTRATION BOND, Including a bond given under Section 256 of the Indian Succession Act, 1865 (10 of 1865), Section 6 of the Government Savings Banks Act, 1873 (5 of 1873), Section 78 of the Probate and Administration Act, 1881 (5 of 1881), or Section 9 or Section 10 of the Succession Certificate Act, 1889 (7 of 1889) –
(a) where the amount does not exceed Rs. 1,000; The same duty as a Bond (No. 15) for such amount.
(b) in any other case……. Five rupees.
3. ADOPTION-DEED, that is to say, any instrument (other than a Will), recording an adoption, or conferring or purporting to confer an authority to adopt. Ten rupees.
4. AFFIDAVIT, including an affirmation or declaration in the case of persons by law allowed to affirm or declare instead of swearing. One rupee.
Exemption
Affidavit or declaration in writing when made –
[(a) as a condition of Enrolment Order under the Indian Army Act, 1911 (8 of 1911): [or the Indian Air Force Act, 1932, (14 of 1932**];]
(b) for the immediate purpose of being filed or used in any court or before the officer of any court; or
(c) for the sole purpose of enabling any person to receive any pension of charitable allowance.
[5. AGREEMENT OR MEMORANDUM OF AN AGREEMENT –
(a) if relating to the sale of a bill of exchange ; Two annas.
(b) if relating to the sale of a Government Security or share in an incorporated company or other body corporate; Subject to a maximum of ten rupees, one anna for every Rs. 10,000 or part thereof of the value of the security or share.
(c) If not otherwise provided for. Eight annas.
Exemptions
Agreement or memorandum of agreement –
(a) for or relating to the sale of goods or merchandise exclusively, not being a Note or Memorandum chargeable under No. 43;
(b) made in the form of tenders to the Central Government for or relating to any loan.
[* * *]
AGREEMENT TO LEASE, SEE LEASE (No. 35).
[6. AGREEMENT RELATING TO DEPOSIT OF TITLE-DEEDS, PAWN OR PLEDGE, that is to say, any instrument evidencing an agreement relating to –
(1) the deposit of title-deeds, or instruments constituting or being evidence of the title to any property whatever (other than a marketable security); or
(2) the pawn or pledge of movable property, where such deposit, pawn or pledge has been made by way of security for the repayment of money advanced or to be advanced by way of loan or an existing or future debt –
(a) if such loan or debt is repayable on demand or more than three months from the date of the instrument evidencing the agreement; The same duty as a Bill of Exchange (No. 13(b)] for the amount secured.
(b) if such loan or debt is repayable not more than three months from the date of such instrument. Half the duty payable on a Bill of Exchange [No. 13(b)] for the amount secured.
Exemption
Instrument of pawn or pledge of goods if unattested.]
7. APPOINTMENT IN EXECUTION OF A POWER, whether of trustee or of property, movable or immovable, where made by any writing not being a Will. Fifteen rupees.
8. APPRAISEMENT OR VALUATIONS, made otherwise than under an order of the Court in the course of suit –
(a) where the amount does not exceed Rs. 1,000; The same duty as a Bond (No. 15) for such amount.
(b) in any other case……. Five rupees
Exemptions
(a) Appraisement or valuation made for the information of one party only, and not being in any manner obligatory between parties either by agreement or operation of law.
(b) Appraisement of crops for the purpose of ascertaining the amount to be given to landlord as rent.
9. APPRENTICESHIP-DEED, including every writing relating to the serving or tuition of any apprentice, clerk or servant, placed with any master to learn any profession, trade or employment, not being ARTICLES OF CLERKSHIP (No. 11).
Exemptions
Instrument of apprenticeship executed by a Magistrate under the Apprentice Act, 1850 (19 of 1850), or by which a person is apprenticed by or at the charge of any public charity.
10 . ARTICLES OF ASSOCIATION OF A COMPANY. Twenty-five rupees.
Exemptions
Article of any Association not framed for profit and registered under section 26 of theIndian Companies Act, 1882 (6 of 1882).
See also MEMORANDUM OF ASSOCIATION OF A COMPANY (No. 39)
11. ARTICLES OF CLERKSHIP or contract whereby any person first becomes bound to serve as a clerk in order to his admission as an attorney in any attorney in any High Court. Two hundred any fifty rupees.
Assignment, See CONVEYANCE (No. 23), TRANSFER (No. 62) and TRANSFER OF LEASE (No. 63), as the case may be.
ATTORNEY, See ENTRY AS AN ATTORNEY (No. 30) and POWER-OF-ATTORNEY (No. 48).
12. AWARD, that is to say, any decision in writing by an arbitrator or umpire, not being an award directing a partition, on a reference made other wise than by an order of the Court in the course of a suit –
(a) where the amount or value of the property to which the award relates as set forth in such award, does not exceed Rs. 1,000 ; The same duty as a Bond (No. 15) for such amount.
(b) in any other case……… Five rupees.
Exemption
Award under the Bombay District Municipal Act, 1873 (Bom. Act VI of 1873), Section 81 or the Bombay Hereditary Offices Act, 1874 (Bom. Act III of 1874), Section 18.
13. BILL OF EXCHANGE [as defined by Section 2(2) [**]], not being a Bond, bank-note or currency note –
[****] [***]
[(b) where payable otherwise than on demand –
(i) where payable not more than three months after date or sight –
If the amount of the bill or note does not exceed Rs. 500; [Thirty paise].
If it exceeds Rs. 500 but does not exceed Rs. 1,000; [Sixty paise].
And for every additional Rs. 1,000 or part thereof in excess of Rs. 1,000; [Sixty paise].
(ii) where payable more than three months but not more than six months after date or sight –
If the amount of the bill or note doesn’t exceed Rs. 500; [Sixty paise].
If it exceeds Rs. 500 but does not exceed Rs. 1,000; [One rupee twenty paise].
And for every additional Rs. 1,000 or part thereof in excess of Rs. 1,000; [One rupee twenty paise].
(iii) where payable more than six months but not more than nine months after date or sight –
If the amount of the bill or note does not exceed Rs. 500; [Ninety paise].
If it exceeds Rs. 500 but does not exceed Rs. 1,000; [One rupee eighty paise].
And for every additional Rs. 1,000 or part thereof in excess of Rs. 1,000; [One rupee eighty paise].
(iv) where payable more than nine months but not more than one year after date or sight-
If the amount of the bill or note does note does not exceed Rs. 500; [One rupee twenty-five paise].
If it exceeds Rs. 500 but does not exceed Rs. 1,000; [Two rupees fifty paise]
And for every additional Rs. 1,000 or part thereof in excess of Rs. 1,000; [Two rupees fifty paise]
(c) where payable more than one year after date or sight –
if the amount of the bill or note does not exceed Rs. 500; [Two rupees fifty paise]
if it exceeds Rs. 500 but does not exceed Rs. 1,000; [Five rupees].
And for every additional Rs. 1,000 or part thereof in excess of Rs. 1,000. [Five rupees].

Note 1. – In supersession of the notification of the Government of India No. 15, dated 15-5-1957 and No. 6, dated 14-7-1961, the proper stamp duty chargeable on bills of exchange specified in items (b) and (c) in Article 13 of the First Schedule to the said Act and promissory notes specified in item (b) of Article 49 of the said Schedule shall be reduced to one-half of the rates specified against the said items (b) and (c) of the said Article 13:Provided that the rates of stamp duty specified in column (2) shall not apply to usance bills of exchange or promissory notes drawn or made for securing finance from the Reserve Bank of India, Industrial Finance Corporation of India, Industrial Development Bank of India, State Financial Corporation, Commercial banks and Co-operative banks for (a) bona fide commercial or trade transactions, (b) seasonal agricultural operations or the marketing of crops, or (c) production or marketing activities of cottage or small scale industries and such instruments shall continue to bear the rates of stamp duty at one-fifth of the rates specified against the said items (b) and (c) in the said Article 13.Explanation 1.-For the purposes of the proviso –

(a) the expression “agricultural operations” includes animal husbandry and allied activities jointly undertaken with agricultural operations;

(b) “crops” include products of agricultural operations;

(c) the expression “marketing of crops” includes the processing of crops prior to marketing by agricultural producers or any organisation of such producers.

Explanation 2.-The duty chargeable shall, wherever necessary, be rounded off to the next five paise. – S.O. 199(E), dated 16-3-1976, published in the Gazette of India, Ext. Pt. II, Section 3(ii), p. 594, dated 16-3-1976. [See also Note 2, below].Note 2. – In supersession of the notifications of Government of India in the Ministry of Finance (Department of Revenue) published in the Gazette of India, Extraordinary, Part II, Section 3 vide numbers S.O. 198(E), dated 16-3-1976 and S.O. 199(E), dated 16-3-1976, except as respects things done or omitted to be done before such supersession, the Central Government hereby directs that with effect from 1-3-2004, the proper stamp duty chargeable on instruments, mentioned under column (1) in Articles 13, 14, 27, 37, 47, 49, 52 and 62(a) in the Schedule I of the Act, shall be reduced and stamp duty payable thereon, after such reduction, shall be as specified in the Table.-S.O. 130(E), dated 28-1-2004, published in the Gazette of India, Ext., Pt. II, Section 3(ii), Sl. No. 108, dated 28-1-2004, published in the Gazette of India, Pt. II, Section 3(ii), Sl. No. 108, dated 28-1-2004.

Description of Instrument Proper Stamp-duty
14. BILL OF LADING (including a through bill of lading). [One rupee].
N.B.-If a bill of lading is drawn in parts, the proper stamp therefore must be borne by each one of the set.
Exemptions
(a) Bill of lading when the goods therein described are received at a place within the limits of any port as defined under the Indian Ports Act, 1889 (10 of 1889), and are to be delivered at another place within the limits of the same port.
(b) Bill of lading when executed out of [India] and relating to property to be delivered in [India].
15. BOND [as defined by section 2(5)] not being a DEBENTURE (No. 27), and not being otherwise provided for by this Act, or by the Court-fees Act, 1870 (7 of 1870), – Two annas.
where the amount or value secured does not exceed Rs. 10; Two annas.
where it exceeds Rs. 10 and does not exceed Rs. 50; Four annas.
Ditto 50 ditto 100; Eight annas.
Ditto 100 ditto 200; One rupee.
Ditto 200 ditto 300; One rupee eight annas.
Ditto 300 ditto 400; Two rupees.
Ditto 400 ditto 500; Two rupees eight annas.
Ditto 500 ditto 600; Three rupees.
Ditto 600 ditto 700; Three rupees eight annas.
Ditto 700 ditto 800; Four rupees.
Ditto 800 ditto 900; Four rupees eight annas.
Ditto 900 ditto 1,000; Five rupees.
and for every Rs. 500 or part thereof in excess of Rs. 1,000. Two rupees eight annas.
See ADMINISTRATION-BOND (No. 2), BOTTOMRY BOND (No. 16), CUSTOMS-BOND (No. 26), INDEMNITY BOND (No. 34), RESPONDENTIA BOND (No. 56), SECURITY-BOND (No. 57).
Exemptions
Bond, when executed by-
(a) headmen nominated under rules framed in accordance with the Bengal Irrigation Act, 1876 (Beng. Act III of 1876), section 99, for the due performance of their duties under that Act;
(b) any person for the purpose of guaranteeing that the local income derived from private subscriptions to a charitable dispensary or hospital or any other object of public utility shall not be less than a specified sum per mensem.
16. BOTTOMRY BOND, that is to say, any instrument whereby the master of a sea-going ship borrows money on the security of the ship to enable him to preserve the ship or prosecute her voyage. The same duty as a Bond (No. 15) for the same amount.
17. CANCELLATION-Instrument of (including any instrument by which any instrument previously executed is cancelled), if attested and not otherwise provided for. See also RELEASE (No. 55), REVOCATION OF SETTLEMENT (No. 58-B), SURRENDER OF LEASE (No. 61), REVOCATION OF TRUST (No. 64-B). Five rupees.
18. CERTIFICATE OF SALE (in respect of each property put up ds a separate lot and sold) granted to the purchaser of any property sold by public auction by a Civil or Revenue Court, or Collector or other Revenue Officer
(a) where the purchase-money does not exceed Rs. 10; Two annas.
(b) where the purchase-money exceeds Rs. 10 but does not exceed Rs. 25; Four annas.
(c) in any other case….. The same duty as a Conveyance (No. 23) for a consideration equal to the amount of the purchase-money only.
19. CERTIFICATE OR OTHER DOCUMENT evidencing the right or title of the holder thereof, or any other person, either to any shares, scrip or stock in or of any incorporated company, or other body corporate, or to become proprietor of shares, scrip or stock in or of any such company or body. [Two annas].
See also LETTER OF ALLOTMENT OF SHARES (No. 36).
20. CHARTER-PARTY, that is to say, any instrument (except an agreement for the hire of a tug-steamer) whereby a vessel or some specified principal part thereof is let for the specified purposes of the charterer, whether it includes a penalty clause or not. One rupee.
21.[***]
22. COMPOSITION-DEED, that is to say, any instrument executed by a debtor whereby he conveys his property for the benefit of his creditors, or whereby payment of a composition or dividend on their debts is secured to the creditors, or whereby provision is made for the continuance of the debtor’s business, under the supervision of inspectors or under letters of licence, for the benefit of his creditors. Ten rupees.
23. CONVEYANCE [as defined by section 2(10)] not being a TRANSFER charged or exempted under No. 62,-
where the amount or value of the consideration for such conveyance as set forth therein does not exceed Rs. 50; Eight annas.
where it exceeds Rs. 50 but does not exceed Rs. 100; One rupee.
Ditto 100 ditto 200; Two rupees.
Ditto 200 ditto 300; Three rupees.
Ditto 300 ditto 400; Four rupees.
Ditto 400 ditto 500; Five rupees.
Ditto 500 ditto 600; Six rupees.
Ditto 600 ditto 700; Seven rupees.
Ditto 700 ditto 800; Eight rupees.
Ditto 800 ditto 900; Nine rupees.
Ditto 900 ditto 1,000; Ten rupees.
and for every Rs. 500 or part thereof in excess of Rs. 1,000. Five rupees.
Exemption
[(a)] Assignment of copyright by entry made under the Indian Copyright Act, 1847, section 5.
[(b) For the purpose of this article, the portion of duty paid in respect of a document falling under Article No. 23-A shall be excluded while computing the duty payable in respect of a corresponding document relating to the completion of the transaction in any union territory under this article.]
CO-PARTNERSHIP-DEED. See PARTNERSHIP (No. 46).
3[23-A. CONVEYANCE IN THE NATURE OF PART PERFORMANCE contracts for the transfer of immovable property in the nature of part performance in any Union territory under section 53-A of the Transfer of Property Act, 1882 (4 of 1882). Ninety per cent. of the duty as a Conveyance (No. 23).]
24. COPY OR EXTRACT certified to be a true copy or extract, by or by order of any public officer and not chargeable under the law for the time being in force relating to Court-fees-
(i) if the original was not chargeable with duty or if the duty with which it was chargeable does not exceed one rupee; Eight annas.
(ii) in any other case….. One rupee.
Exemptions
(a) Copy of any paper which a public officer is expressly required by law to make or furnish for record in any public office or for any public purpose.
[(b) Copy of, or extract from, any register relating to births, baptisms, namings, dedications, marriages, [divorces,] deaths or burials.]
25. COUNTERPART OR DUPLICATE of any instrument chargeable with duty and in respect of which the proper duty has been paid,-
(a) if the duty with which the original instrument is chargeable does not exceed one rupee;
(b) in any other case…..
Exemption
Counter part of any lease granted to a cultivator, when such lease is exempted from duty.
26. CUSTOMS-BOND-
(a) where the amount does not exceed Rs. 1,000; The same duty as a Bond (No. 15) for such amount.
(b) in any other case….. Five rupees.
[27. DEBENTURE (whether a mortgage debenture or not), being a marketable security transferable – 0.05% per year of the face value of the debenture, subject to the maximum of 0.25% or rupees twenty five lakhs whichever is lower.
(a) by endorsement or by a separate instrument of transfer
(b) by delivery
Explanation.-The term “Debenture” includes any interest coupons attached thereto but the amount of such coupons shall not be included in estimating the duty.
Exemption
A debenture issued by an incorporated company or other body corporate in terms of a registered mortgage-deed, duly stamped in respect of the full amount of debentures to be issued there under, whereby the company or body borrowing makes over, in whole or in part, their property to trustees for the benefit of the debentures holders:
Provided that the debentures so issued are expressed to be issued are expressed to be issued in terms of the said mortgage-deed.]
DECLARATION OF ANY TRUST. See TRUST (No. 64).
28. DELIVERY ORDER IN RESPECT OF GOODS, that is to say, any instrument entitling any person therein named, or his assigns, or the holder thereof to the delivery of any goods lying in any dock or port, or in any warehouse in which goods are stored or deposited on rent or hire, or upon any wharf, such instrument being signed by or on behalf of the owner of such goods, upon the sale or transfer of the property therein, when such goods exceed in value twenty rupees. One anna.
DEPOSIT OF TITLE-DEEDS. [See AGREEMENT RELATING TO DEPOSIT OF TITLE-DEEDS, PAWN OR PLEDGE (No. 6).]
DISSOLUTION OF PARTNERSHIP. See PARTNERSHIP (No. 46).
29. DIVORCE-Instrument of, that is to say, any instrument by which any person effects the dissolution of his marriage. One rupee.
DOWER-Instrument of. See SETTLEMENT (No. 58).
DUPLICATE. See COUNTERPART (No. 25).
30. ENTRY AS AN ADVOCATE, VAKIL OR ATTORNEY ON THE ROLL OF ANY HIGH COURT,[under the Indian Bar Councils Act, 1926 (38 of 1926), or] in exercise of powers conferred on such Court by Letters Patent or by the Legal Practitioners Act, 1884 (9 of 1884)
(a) in the case of an Advocate or Vakil; Five hundred rupees.
(b) in the case of an Attorney. Two hundred and fifty rupees.
Exemption
Entry of an advocate, vakil or attorney on the roll of any High Court when he has previously been enrolled in a High Court.
[* * *]
31. EXCHANGE OF PROPERTY-Instrument of. The same duty as a Conveyance (No. 23) for a consideration equal to the value of the property of greatest value as set forth in such instrument.
EXTRACT. See COPY (No. 24).
32. FURTHER CHARGE-Instrument of, that is to say, any instrument imposing a further charge on mortgaged property –
(a) when the original mortgage is one of the description referred to in clause (a) of Article No. 40 (that is, with possession); The same duty as a Conveyance (No. 23) for a consideration equal to the amount of the further charge secured by such instrument.
(b) when such mortgage is one of the description referred to in clause (b) of Article No. 40 (that is, without possession) –
(i) if at the time of execution of the instrument of further charge possession of the property is given, or agreed to be given under such instrument; The same duty as a Conveyance (No. 23) for a consideration equal to the total amount of the charge (including the original mortgage and any further charge already made) less the duty already paid on such original mortgage and further charge.
(ii) if possession is not so given….. The same duty as a Bond (No. 15) for the amount of the further charge secured by such instrument.
33. GIFT-Instrument of, not being a SETTLEMENT (No. 58) or WILL OR TRANSFER (No. 62). The same duty as a Conveyance (No.,23) for a consideration equal to the value of the property as set forth in such instrument.
HIRING AGREEMENT or agreement for service. See AGREEMENT (No. 5).
34. INDEMNITY-BOND. The same duty as a Security-Bond (No. 57) for the same amount.
INSPECTORSHIP-DEED. See COMPOSITION-DEED (No. 22).
INSURANCE. See POLICY OF INSURANCE (No. 47).
35. LEASE, including an under-lease or sub-lease and any agreement to let or sub-let –
(a) whereby such lease the rent is fixed and no premium is paid or delivered –
(i) where the lease purports to be for a term of less than one year; The same duty as a Bond (No. 15) for the whole amount payable or deliverable under such lease.
(ii) where the lease purports to be for a term of not less than one year but not more than three years; The same duty as a Bond (No. 15) for the amount or value of the average annual rent reserved.
(iii) where the lease purports to be for a term in excess of three years; The same duty as a Conveyance (No. 23) for a consideration equal to the amount or value of the average annual rent reserved.
(iv) where the lease does not purport to be for any definite term; The same duty as a Conveyance (No. 23) for a consideration equal to the amount or value of the average annual rent which would be paid or delivered for the first ten years if the lease continued so long.
(v) where the lease purports to be in perpetuity; The same duty as a Conveyance (No. 23) for a consideration equal to one-fifth of the whole amount of rents which would be paid or delivered in respect of the first fifty years of the lease.
(b) where the lease is granted for a fine or premium or for money advanced and where no rent reserved. The same duty as a Conveyance (No. 23) for a consideration equal took amount or value of such fine or premium or advance as set forth in the lease.
(c) where the lease is granted for a fine or premium or for money advanced in addition to rent reserved. The same duty as a Conveyance (No-23) for a consideration equal to the amount or value of such fine or premium or advance as set forth in the lease, in addition to the duty which would have been payable on such lease if no fine or premium or advance had been paid or delivered:
Provided that, in any case when an agreement to lease is stamped with the ad valorem stamp required for a lease, and a lease in pursuance of such agreement is subsequently executed, the duty on such lease shall not exceed eight annas.
Exemptions
(a) Lease, executed in the case of a cultivator and for the purposes of cultivation (including a lease of trees for the production of food or drink) without the payment or delivery of any fine or premium, when a definite term is expressed and such term does not exceed one year, or when the average annual rent reserved does not exceed one hundred rupees.
[***]
36. LETTER OF ALLOTMENT OF SHARES in any company or proposed company, or in respect of any loan to be raised by any company or proposed company. [Two annas].
See also CERTIFICATE OR OTHER DOCUMENT (No. 19). [One rupee].
37. LETTER OF CREDIT, that is to say, any instrument by which one person authorises another to give credit to the person in whose favour it is drawn.
LETTER OF GUARANTEE. See AGREEMENT (No. 5).
38. LETTER OF LICENCE, that is to say, any agreement between a debtor and his creditors that the latter shall, for a specified time, suspend their claims and allow the debtor to carry on business at his own discretion. Ten rupees.
39. MEMORANDUM OF ASSOCIATION OF A COMPANY- Fifteen rupees.
a) if accompanied by articles of association under section 37 of the Indian Companies Act, 1882 (6 of 1882);
(b) if not so accompanied. Forty rupees.
Exemption
Memorandum of any association not formed for profit and registered under section 26 of the Indian Companies Act, 1882 (6 of 1882).
40. MORTGAGE-DEED, not being [an AGREEMENT RELATING TO DEPOSIT OF TITLE-DEEDS, PAWN OR PLEDGE (No. 6)], BOTTOMRY BOND (No. 16), MORTGAGE OF A CROP (No. 41), RESPONDENTIA BOND (No. 56), OR SECURITY-BOND (No. 57)-
(a) when possession of the property or any part of the property comprised in such deed is given by the mortgagor or agreed to be given; The same duty as a Conveyance (No. 23) for a consideration equal to the amount secured by such deed.
(b) when [* *] possession is not given or agreed to be given as aforesaid; The same duty as a Bond (No. 15) for the amount secured by such deed.
Explanation.-A mortgagor who gives to the mortgagee a power-of-attorney to collect rent or a lease of the property mortgaged or part thereof
(c) when a collateral or auxiliary or additional or substituted security, or by way of further assurance for the above-mentioned purpose where the principal or primary security is duly stamped –
for every sum secured not exceeding Rs. 1,000; Eight annas.
and for every Rs. 1,000.or part thereof secured in excess of Rs. 1,000. Eight annas.
Exemptions
(1) Instruments, executed by persons taking advances under the Land Improvement Loans Act, 1883 (19 of 1883), or the Agriculturists’ Loans Act, 1884 (12 of 1884), or by their sureties as security for the repayment of such advances.
(2) Letter of hypothecation accompanying a bill of exchange.
[* * * *]
41. MORTGAGE OF A CROP, including any instrument evidencing an agreement to secure the repayment of a loan made upon any mortgage of a crop, whether the crop is or is not in existence at the time of the mortgage-
(a) when the loan is repayable not more than three months from the date of the instrument –
for every sum secured not exceeding Rs. 200; One anna.
and for every Rs. 200 or part thereof secured in excess of Rs. 200; One anna.
(b) when the loan is repayable more than three months, but not more than [eighteen months], from the date of the instrument-
for every sum secured not exceeding Rs. 100; [Two annas].
and for every Rs. 100 or part thereof secured in excess of Rs. 100. [Two annas].
42. NOTARIAL ACT, that is to say, any instrument, endorsement, note, attestation, certificate or entry not being a PROTEST (No. 50) made or signed by a Notary Public in the execution of the duties of his office, or by any other person lawfully acting as a Notary Public. One rupee.
See also PROTEST OF BILL OR NOTE (No. 50).
3[43. NOTE OR MEMORANDUM sent by a Broker or Agent to his principal intimating the purchase or sale on account of such principal –
(a) of any goods exceeding in value twenty rupees; Two annas.
(b) of any stock or marketable security exceeding in value twenty rupees. Subject to a maximum of ten rupees, one anna for every Rs. 10,000 or part thereof of the value of the stock or security.
44. NOTE OF PROTEST BY THE MASTER OF A SHIP. Eight annas.
See also PROTEST BY THE MASTER OF A SHIP (No. 51).
ORDER FOR THE PAYMENT OF MONEY. See BILL OF EXCHANGE (No. 13).
45. PARTITION-Instrument of [as defined by section 2(15)]. The same duty as a Bond (No. 15) for the amount of the value of the separated share or shares of the property.
N.B.-The largest share remaining after the property is partitioned (or, if there are two or more shares of equal value and not smaller than any of the other shares, then one of such equal shares) shall be deemed to be that from which the other shares are separated:
Provided always that-
(a) when an instrument of partition containing an agreement to divide property in severalty is executed and a partition is effected in pursuance of such agreement, the duty chargeable upon the instrument effecting such partition shall be reduced by the amount of duty paid in respect of the first instrument, but shall not be less than eight arenas;
(b) where land is held on Revenue Settlement for a period not exceeding thirty years and paying the full assessment, the value for the purpose of duty shall be calculated at not more than five times the annual revenue;
(c) where a final order for effecting a partition passed by any Revenue-authority or any Civil Court, or an award by an arbitrator directing a partition, is stamped with the stamp required for an instrument of partition, and an instrument of partition in pursuance of such order or award is subsequently executed, the duty on such instrument shall not exceed eight annas.
46. PARTNERSHIP-
A.-INSTRUMENT OF-
(a) where the capital of the partnership does not exceed Rs. 500; Two rupees eight annas.
(b) in any other case….. Ten rupees.
B.-DISSOLUTION OF…… Five rupees
[PAWN OR PLEDGE. See AGREEMENT RELATING TO DEPOSIT OF TITLE DEEDS, PAWN OR PLEDGE (No. 6)].
47. POLICY OF INSURANCE- If drawn singly If drawn in duplicate for each part
[A.-SEA-INSURANCE (see section 7)-
(1) for or upon any voyage-
(i) where the premium or consideration does not exceed the rate of [* *] one-eighth per centum of the amount insured by the policy; [Five paise]. [Five paise].
(ii) in any other case, in respect of every full sum of [one thousand five hundred rupees]and also any fractional part of [one thousand five hundred rupees] insured by the policy; [Five paise]. [Five paise].
(2) for time –
(iii) in respect of every full sum of one thousand rupees and also any fractional part of one thousand rupees insured by the policy –  
where the insurance shall be made for any time not exceeding six months; [Ten paise] [Five paise].
where the insurance shall be made for any time exceeding six months and not exceeding twelve months. [Ten paise] [Five paise].
[B.-FIRE-INSURANCE AND OTHER CLASSES OF INSURANCE, NOT ELSEWHERE INCLUDED IN THIS ARTICLE, COVERING GOODS, MERCHANDISE, PERSONAL EFFECTS, CROPS, AND OTHER PROPERTY AGAINST LOSS OR DAMAGE]-
(1) in respect of an original policy-
(i) when the sum insured does not exceed Rs. 5,000; [Twenty-five paise].
(ii) in any other case….. [Fifty paise].
and
(2) in respect of each receipt for any payment of a premium on any renewal of an original policy. One-half of duty payable in respect of the original policy in addition to the amount, if any, chargeable under No. 53].
C.-ACCIDENT AND SICKNESS INSURANCE-
(a) against railway accident, valid for a single journey only. [Five paise].
Exemption
When issued to a passenger travelling by the intermediate or the third class in any railway; [Ten paise]:
(b) in any other case-for the maximum amount which may become payable in the case of any single accident or sickness where such amount does not exceed Rs. 1,000, and also where such amount exceeds Rs. 1,000, for every Rs. 1,000 or part thereof. [Provided that, in case of a policy of insurance against death by accident when the annual premium payable does not exceed [Rs. 2.50] per Rs. 1,000, the duty on such instrument shall be [five paise] for every Rs. 1,000 or part thereof of the maximum amount which may become payable under it]
[CC.-INSURANCE BY WAY OF INDEMNITY against liability to pay damages on account of accidents to workmen employed by or under the insurer or against liability to pay compensation under the Workmen’s Compensation Act, 1923 (8 of 1923), for every Rs. 100 or part thereof payable as premium. [Five paise].
[D.-LIFE INSURANCE [OR GROUP INSURANCE OR OTHER INSURANCE] NOT SPECIFICALLY PROVIDED FOR, except such a RE-INSURANCE, as is described in Division E of this article- If drawn singly If drawn in duplicate for each part
(i) for every sum insured not exceeding Rs. 250; [Ten paise]. [Five paise].
(ii) for every sum insured exceeding Rs. 250 but not exceeding Rs. 500; [Ten paise]. [Five paise].
(iii) for every sum insured exceeding Rs. 500 but not exceeding Rs. 1,000 and also for every Rs. 1,000 or part thereof in excess of Rs. 1,000. [Twenty paise]. [Ten paise].
[N.B.-If a policy of group insurance is renewed or otherwise modified whereby the sum insured exceeds the sum previously insured on which stamp-duty has been paid, the proper stamp must be borne on the excess sum so insured.]
Exemption
Policies of life-insurance granted by the Director General of Post Offices in accordance with rules for Postal Life-Insurance issued under the authority of the Central Government.]
E.-RE-INSURANCE BY AN INSURANCE COMPANY, which has granted a POLICY [of the nature specified in Division A or Division B of this article], with another company by way of indemnity or guarantee against the payment on the original insurance of a certain part of the sum insured thereby. One-quarter of the duty payable in respect of the original insurance but not less than [five paise or more than [fifty paise]:
[Provided that if the total amount of duty payable is not a multiple of [five paise], the total amount shall be rounded off to the next higher multiple of [five paise].
General Exemption
Letter of cover or engagement to issue a policy of insurance:
Provided that, unless such letter of engagement bears the stamp prescribed by this Act for such policy, nothing shall be claimable there under, nor shall it be available for any purpose, except, to compel the delivery of the policy therein mentioned.
48. POWER-OF-ATTORNEY [as defined by section 2(21)], not being a PROXY (No. 52)-
(a) when executed for the sole purpose of procuring the registration of one or more documents in relation to a single transaction or for admitting execution of one or more such documents; Eight annas.
(b) when required in suits or proceedings under the Presidency Small Cause Courts Act, 1882 (15 of 1882); Eight annas.
(c) when authorising one person or more to act in a single transaction other than the case mentioned in clause (a); One rupee.
(d) when authorising not more than five persons to act jointly and severally in more than one transaction or generally; Five rupees.
(e) when authorising more than five but not more than ten persons to act jointly and severally in more than one transaction or generally; Ten rupees.
(f) when given for consideration and authorising the attorney to sell any immovable property; The same duty as a Conveyance (No. 23) for the amount of the consideration.
(g) in any other case….. One rupee for each person authorised.
  N.B.-The term “registration” includes every operation incidental to registration under the Indian Registration Act, 1877 (3 of 1877).
Explanation.-For the purposes of this article more persons than one when belonging to the same firm shall be deemed to be one person.
[49. PROMISSORY NOTE [as defined by section 2(22)-
(b) where payable otherwise than on demand. One-fifth of the duty as applicable to Bill of Exchange (No. 13 of Schedule I) for the same amount payable otherwise on demand].
50. PROTEST OF BILL OR NOTE, that is to say, any declaration in writing made by a Notary Public, or other person lawfully acting as such, attesting the dishonour of a bill of exchange or promissory note. One rupee.
51. PROTEST BY THE MASTER OF A SHIP, that is to say, any declaration of the particulars of her voyage drawn up by him with a view to the adjustment of losses or the calculation of averages, and every declaration in writing made by him against the charterers or the consignees for not loading or unloading the ship, when such declaration is attested or certified by a Notary Public or other person lawfully acting as such. One rupee.
See also NOTE OF PROTEST BY THE MASTER OF A SHIP (No. 44).
52. PROXY empowering any person to vote at any one election of the members of a district or local board or of a body of municipal commissioners, or at any one meeting of (a) members of an incorporated company or other body corporate whose stock or funds is or are divided into shares and transferable, (b) a local authority, or, (c) proprietors, members or contributors to the funds of any institution. [Fifteen paise].
53. RECEIPT [as defined by section 2(23)] for any money or other property the amount or value of which exceeds [five thousand rupees]. [One rupee].
Exemptions
Receipt-
(a) endorsed on or contained in any instrument duly stamped, [or any instrument exempted] under the proviso to section 3 (instruments executed on behalf of the Government) [or any cheque or bill of exchange payable on demand] acknowledging the receipt of the consideration-money therein expressed, or the receipt of any principal-money, interest or annuity, or other periodical payment thereby secured;
(b) for any payment of money without consideration;
(c) for any payment of rent by a cultivator on account of land assessed to Government revenue, or [in the States of Madras, Bombay and Andhra] [as they existed immediately before the 1st November, 1956] of inam lands;
(d) for pay or allowances by non-commissioned [or petty] officers, [soldiers], [sailors] or airmen] of [[the Indian] military, [naval] or air forces], when serving in such capacity, or by mounted police-constables;
(e) given by holders of family-certificates in cases where the person from whose pay or allowances the sum comprised in the receipt has been assigned is a non- commissioned [or petty] officer, [soldier], [sailor] or airman] of [any of the said forces], and serving in such capacity;
(f) for pensions or allowances by persons receiving such pensions or allowances in respect of their service as such non-commissioned [or petty] officers, [soldiers], [sailors]or airmen], and not serving the Government in any other capacity;
(g) given by a headman or lambardar for land-revenue or taxes collected by him;
(h) given for money or securities for money deposited in the hands of any banker, to be accounted for:
Provided that the same is not expressed to be received of, or by the hands of, any other than the person to whom the same is to be accounted for:
Provided also that this exemption shall not extend to a receipt or acknowledgment for any sum paid or deposited for or upon a letter of allotment of a share, or in respect of a call upon any script or share of, or in any incorporated company or other body corporate or such proposed or intended company or body or in respect of a debenture being a marketable security.
[See also POLICY OF INSURANCE [No. 47-B (2)].]
54. RECONVEYANCE OF MORTGAGED PROPERTY
(a) if the consideration for which the property was mortgaged does not exceed Rs. 1,000; The same duty as a Conveyance (No. 23) for the amount of such consideration as set forth in the Re-conveyance.
(b) in any other case….. Ten rupees.
55. RELEASE, that is to say, any instrument [(not being such a release as is provided for by section 23-A)] whereby a person renounces a claim upon another person or against any specified property-
(a) if the amount or value of the claim does not exceed Rs. 1,000; The same duty as a Bond (No. 15) for such amount or value as set forth in theRelease.
(b) in any other case….. Five rupees.
56. RESPONDENTIA BOND, that is to say, any instrument securing a loan on the cargo laden or to be laden on board a ship and making repayment contingent on the arrival of the cargo at the port of destination. The same duty as a Bond (No. 15) for the amount of the loan secured.
REVOCATION OF ANY TRUST OR SETTLEMENT.
See SETTLEMENT (No. 58); TRUST (No. 64).
57. SECURITY-BOND OR MORTGAGE DEED executed by way of security for the due execution of an office, or to account for money or other property received by virtue thereof or executed by a surety to secure the due performance of a contract,-
(a) when the amount secured does not exceed Rs. 1,000; The same duty as a Bond (No. 15) for the amount secured.
(b) in any other case….. Five rupees.
Exemptions
Bond or other instrument, when executed-
(a) by headmen nominated under rules framed in accordance with the Bengal Irrigation Act, 1876 (Beng. Act 3 of 1876), section 99, for the due performance of their duties under that Act;
(b) by any person for the purpose of guaranteeing that the local income derived from private subscriptions to a charitable dispensary or hospital or any other object of public utility shall not be less than a specified sum per mensem;
(c) under No. 3-A of the rules made by the [State Government] under section 70 of the Bombay Irrigation Act, 1879 (Born. Act 5 of 1879);
(d) executed by persons taking advances under the Land Improvement Loans Act, 1883 (19 of 1883), or the Agriculturists’ Loans Act, 1884 (12 of 1884), or by their sureties, as security for the repayment of such advances;
(e) executed by officers of [the [Government]] or their sureties to secure the due execution of an office or the due accounting for money or other property received by virtue thereof.
58. SETTLEMENT
A.-INSTRUMENT OF (including a deed of dower). The same duty as a Bond (No. 15) for a sum equal to the amount or value of the property settled as set forth in such settlement:
Provided that, where an agreement to settle is stamped with the stamp required for an instrument of settlement, and an instrument of settlement in pursuance of such agreement is subsequently executed, the duty on such instrument shall not exceed eight annas.
Exemptions
(a) Deed of dower executed on the occasion of a marriage between Muhammadans.
[*****]
B.-REVOCATION OF….. The same duty as a Bond (No. 15) for a sum equal to the amount or value of the property concerned as set forth in the Instrument of Revocation but not exceeding ten rupees.
See also TRUST (No. 64).
59. SHARE WARRANTS to bearer issued under the Indian Companies Act, 1882 (6 of 1882). [One and a half times] the duty payable on a Conveyance (No. 23) for a consideration equal to the nominal amount of the shares specified in the warrant.
Exemptions
Share warrant when issued by a company in pursuance of the Indian Companies Act, 1882 (6 of 1882), section 30, to have effect only upon payment, as composition for that duty, to the Collector of Stamp-revenue, of-
(a) [one and a half] per centum of the whole subscribed capital of the company, or
(b) if any company which has paid the said duty or composition in full, subsequently issues an addition to its subscribed capital-[one and a half] per centum of the additional capital so issued.
SCRIP. See CERTIFICATE (No. 19).
60. SHIPPING ORDER for or relating to the conveyance of goods on board of any vessel. One anna.
61. SURRENDER OF LEASE-
a) when the duty with which the lease is chargeable does not exceed five rupees; The duty with which such lease is chargeable.
(b) in any other case….. Five rupees.
Exemption
Surrender of lease, when such lease is exempted from duty.
62. TRANSFER (whether with or without consideration)-
[(a) of shares in an incorporated company or other body corporate; [Twenty-five paise] for every hundred rupees or part there of the value of the share:
Provided that rates of stamp duty specified in column (2) on Bills of Exchange for items (b) and (c) in Article 13 and on promissory note for item (b) of Article 49 shall not apply to usance bills of exchange or promissory notes drawn or made for securing finance from Reserve Bank of India, Industrial Finance Corporation of India, Industrial Development Bank of India, State Financial Corporations, Commercial Banks and Cooperative Banks for (a) bona fide commercial or trade transactions, (h) seasonal agricultural operations or the marketing of crops, or (c) production or marketing activities of cottage and small scale industries and such instruments shall bear the rate of stamp duty at one-fifth of the rate mentioned against items (b) and (c) in Article 13 and item (b) in Article 49 of Schedule I of the Indian Stamp Act, 1899 (2 of 1899).
Explanation 1.-For the purposes of the proviso-
(a) the expression “agricultural operations” includes animal husbandry and allied activities jointly undertaken with agricultural operations;
(b) “crops” include products of agricultural operations;
(c) the expression “marketing of crops” includes the processing of crops prior to marketing by agricultural producers or any organization of such producers.
Explanation 2.-The duty chargeable shall, wherever necessary, be rounded off to the next five paise.]
(b) of debentures, being marketable securities, whether the debenture is liable to duty or not, except debentures provided for by section 8; [One-half] of the duty payable on a Conveyance (No. 23) for a consideration equal to the face amount of the debenture.
(c) of any interest secured by a bond, mortgage-deed or policy of insurance,-
(i) if the duty on such bond, mortgage-deed or policy does not exceed five rupees; The duty with which such bond, mortgage-deed or policy of insurance is chargeable.
(ii) in any other case….. Five rupees.
(d) of any property under the Administrator General’s Act, 1874 (2 of 1874), section 31; Ten rupees.
(e) of any trust-property without consideration from one trustee to another trustee or from a trustee to a beneficiary. Five rupees or such smaller amount as may be chargeable under clauses (a) to (c) of this article.
Exemptions
Transfers by endorsement-
(a) of a bill of exchange, cheque or promissory note;
(b) of a bill of lading, delivery order, warrant for goods, or other mercantile document of title to goods;
(c) of a policy of insurance;
(d) of securities of the Central Government.
See also section 8.
63. TRANSFER OF LEASE by way of assignment and not by way of under-lease. The same duty as a Conveyance (No. 23) for a consideration equal to the amount of the consideration for the transfer.
Exemption
Transfer of any lease exempt from duty.
64. TRUST-
A.-DECLARATION OF-of, or concerning, any property when made by any writing not being a WILL. The same duty as a Bond (No. 15) for a sum equal to the amount or value of the property concerned as set forth in the instrument but not exceeding fifteen rupees.
B.-REVOCATION OF-of, or concerning, any property when made by any instrument other than a WILL. The same duty as a Bond (No. 15) for a sum equal to the amount or value of the property concerned as set forth in the instrument but not exceeding ten rupees.
See also SETTLEMENT (No. 58).
VALUATION. See APPRAISEMENT (No. 8).
VAKIL See ENTRY AS A VAKIL (No. 30).

65. WARRANT FOR GOODS, that is to say, any instrument evidencing the title of any person therein named, or his assigns, or the holder thereof, to the property in any goods lying in or upon any dock, warehouse or wharf, such instrument being signed or certified by or on behalf of the person in whose custody such goods may be.

Four annas.
SCHEDULE II
ENACTMENTS REPEALED.-[Repealed by the Repealing and Amending Act, 1914 (10 of 1914), section 3 and Schedule II.]

Whether ownership in stamp papers passes to stamp vendor when treasury officer delivers stamp papers on payment of price

DEED

The ownership in the stamp-papers passes to the stamp vendor when the treasury officer delivers the stamp papers on payment of price less discount. The stamp rules themselves contemplates that what the licensed vendor does, while taking delivery of the stamp papers from the government offices, is purchasing the stamp papers. The stamp paper vendors are not the agent of the State Government, from whom they purchase the stamp papers. The stamp vendors have to first obtain licence under the Stamp Rules. The licensed stamp vendor has to apply to the treasury office for the stamps required by him. The statement of stamps, etc popularly known as ‘challan’ will have to be filled which clarifies the discount available to the stamp vendors on the basis of purchase of stamps and the total amount paid for it. The stamp vendor has to make the payment of the requisite amount in cash which is the total price of the stamps on their face value less the discount available to the vendor.

The following Judgment could be referred to gurner the above position :

(2009) 5 AD(Delhi) 385 : (2009) 224 CurTR 168 : (2009) 5 ILR(Delhi) 585 : (2009) 319 ITR 29 : (2010) 8 RCR(Civil) 1832 : (2009) 180 Taxman 128

DELHI HIGH COURT

DIVISION BENCH

( Before : Rajiv Shakdher, J; Badar Durrez Ahmed, J )

COMMISSIONER OF INCOME TAX — Appellant

Vs.

SINGAPORE AIRLINES LTD. — Respondent

IT Appeal No’s. 206 of 2005 and 123 of 2006

Decided on : 13-04-2009

Contract Act, 1872 – Section 182
Income Tax Act, 1961 – Section 131, Section 133A, Section 194(D), Section 194G, Section 194H, Section 197, Section 197(1), Section 201(1), Section 201(1A)
Income Tax Rules, 1962 – Rule 24(2)

Cases Referred

Qamar Shaffi Tyabji Vs. The Commissioner, Excess Profits Tax, Hyderabad, AIR 1960 SC 1269 : (1960) 39 ITR 611 : (1960) 3 SCR 546
Commissioner of Income Tax, Bangalore Vs. B.C. Srinivasa Setty, AIR 1981 SC 972 : (1981) 21 CTR 138 : (1981) 128 ITR 294 : (1981) 1 SCALE 384 : (1981) 2 SCC 460 : (1981) 2 SCR 938 : (1981) 13 UJ 391
Lakshminarayan Ram Gopal and Son Ltd. Vs. The Government of Hyderabad, AIR 1954 SC 364 : (1954) 25 ITR 449 : (1955) 1 SCR 393
Tirumala Venkateswara Timber and Bamboo Firm Vs. Commercial Tax Officer, Rajahmundry, AIR 1968 SC 784 : (1968) 2 SCR 476 : (1968) 21 STC 312
M.S. Hameed and Others Vs. Director of State Lotteries and Others, (2001) 249 ITR 186
Ahmedabad Stamp Vendors Association Vs. Union of India (UOI), (2002) 3 GLR 613 : (2002) 257 ITR 202 : (2002) 124 TAXMAN 628
Commissioner of Income Tax Vs. Majestic Hotel Ltd., (2006) 204 CTR 330 : (2007) 293 ITR 185 : (2006) 155 TAXMAN 447
Commissioner of Income Tax Vs. Adidas India Marketing (P) Ltd., (2006) 206 CTR 499 : (2007) 288 ITR 379 : (2006) 157 TAXMAN 519
The Commissioner of Income Tax Vs. Tej Quebecor Printing Ltd., (2006) 200 CTR 444 : (2006) 129 DLT 110 : (2006) 281 ITR 170 : (2006) 151 TAXMAN 210

JUDGMENT

Rajiv Shakdher, J.—In these batch of appeals, which have been preferred by the revenue, there are three issues which require consideration of this Court.

(i) In the first batch of appeals; the issue which arises is whether supplementary commission received by travel agents of assessee-airlines is a ‘commission’ within the meaning of Section 194H of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’). If that be so, the failure on the part of the assessee-airlines would render them liable for consequences u/s 201(1) and 201(1A) of the Act.

(ii) In the second set of appeals, the issue for consideration is whether certificates issued by the Assessing Officer to the assessee-airlines u/s 197 of the Act permitting the assessee-airlines to deduct tax at source at a lower rate or even ‘nil’ rate would also cover the supplementary commission.

(iii) The third set of appeals raise the issue as to whether tickets issued by assessee-airlines to its travel agents at a concessional price would result in bringing the transaction within the ambit of Section 194H of the Act. If that be so, would the assessee-airlines be liable for the ensuing consequences u/s 201(1) and 201(1A) of the Act.

2. The lead case in these batch of appeals is ITA No. 306/2005 entitled CIT v. Singapore Airlines. The judgment of the Income Tax Appellate Tribunal (hereinafter referred to as the ‘Tribunal’) dated 19-10-2004 passed in TDSA No. 58/Delhi/302 pertains to assessment year 2001-02. It is a common ground that all other appeals have been disposed of based on the aforesaid judgment of the Tribunal. The counsel for the assessees-airlines who have appeared before us have submitted that the facts, in issue, are common. Therefore, except for a few submissions the submissions are more or less common. Wherever counsel have laid stress on a particular point or made a submission different from one already made – we shall refer to the same as we go along with the narration of the facts and submissions in our judgment.

3. Therefore, in order to decide these appeals, it would suffice except for the eventuality articulated hereinabove, if we were to note the facts set out and submissions made in the records of the authorities below in ITA No. 306/2005. Keeping this ground rule in mind, let us examine the issues at hand.

4. The provision which is the subject-matter of the debate, that is Section 194H, was first brought on to the statute book by the Finance (2) Act, 1991 with effect from 1-10-1991. The Section was amended by the Finance Act, 1992 with effect from 1-6-1992. The section was omitted from the statute book by the Finance Act, 1999 with effect from 1-4-2000. The said Section 194H was reintroduced in the statute book in its present avatar by the Finance Act, 2001 with effect from 1-6-2001. We are concerned with the provisions of Section 194H as it stood after its introduction by virtue of the Finance Act, 2001. Therefore, the period in issue during which the assessee(s)-airline(s) received what the revenue terms as supplementary commission is: 1-6-2001 to 15-2-2002. It is the revenue’s case that the assessee-airline received by way of supplementary commission during the period in issue a sum of Rs. 29,34,97,709 on which it failed to deduct tax at source equivalent to Rs. 2,93,49,770. The department was thus deprived of not only the said short-deducted tax at source but also of surcharge.

5. It is the revenue’s case that immediately after the reintroduction of Section 194H on the statute book, the Department wrote letters to the airlines to adhere to the provisions of the newly introduced section. As a matter of fact, the Central Board of Direct Taxes (hereinafter referred to as the ‘CBDT’) issued a Circular No. 619, dated 4-12-1991 wherein it clarified that any retention of commission by a consignee or an agent would amount to constructive payment by the principal and hence Tax Deduction at Source (in short TDS’) was required to be deducted under the provisions of Section 194H of the Act. The revenue has stated that despite such instructions and communication the assessee(s)-airline(s) did not pay heed to the directives of the Department. The Department having been left with no choice conducted a survey under the provisions of Section 133Aof the Act. The survey was conducted on 18-2-2002. During the course of survey, it came to light that the assessee(s)-airline(s) would supply blank tickets to the travel agent. The travel agent, after sale, would send the details to an organization by the name of Billing Settlement Plan (hereinafter referred to as ‘BSP’); which is an organization approved by the International Air Transport Association (hereinafter referred to as the 1ATA.’). The travel agent would send sale details to BSP every two weeks. Based on this information, the BSP would send a billing analysis to the assessee(s)-airline(s). The billing analysis conducted by the BSP would invariably refer to the transaction value, the tax amount, the standard IATA approved commission, which to begin with, was 9 per cent and was reduced to 7 per cent with effect from 1-1-2002, and lastly, if the transaction pertained to what was termed as a ‘deal’ ticket, it would also indicate the supplementary commission. Thus the billing analysis would show the net amount payable, after deductions had been made from the transaction value, on account of, commission and supplementary commission wherever paid. The billing analysis statement prepared by BSP invariably in most cases referred to the deal code wherever there was reference to supplementary commission.

5.1 In view of this information having come to light, the Assessing Officer issued summons u/s 131 to the assessee-airline. The assessee-airline on 22-2-2000 filed its reply to the queries raised by the Assessing Officer. In short the assessee-airline submitted that the provisions of Section 194H were not applicable to it as what was retained by the travel agent was in the nature of discount and not commission as contemplated under the said provision. Reliance was placed on the judgment of the Kerala High Court in the case of M.S. Hameed and Others Vs. Director of State Lotteries and Others, .

6. On the other hand, the Department’s case was that a survey was conducted on 7-3-2002 with respect to certain travel agents. As a matter of fact, a reference has been made in the order of the Assessing Officer of two such travel agents viz., Ashok Travel and Tours and Balmer and Lawrie & Co. Ltd. Both the travel agents confirmed that even though they received special commission from the airline, the same was not passed on to the customers. Balmer and Lawrie & Co. Ltd. which is an approved travel agent for public sector undertakings, however, adverted to the fact that they had obtained exemption from the Income Tax authority vide communication dated 29-5-2001 and hence tax at source had not been deducted on commission received by them. It, however, informed the Department that in the said sector incentive/commission which it received was retained and not passed on to any agency or any of their clients. As regards concessional/free tickets Balmer and Lawrie & Co. Ltd. informed the Department that they were being utilized for the in-house travel and by the officers of the company who are required to travel for official work by air as per their entitlement.

7. The Assessing Officer after examining the stand came to the conclusion that the provisions of Section 194H of the Act were attracted in the instant case. The brief reasons which impelled the Assessing Officer to come to the said conclusion were as follows:

(i) the assessee-airline supply blank tickets to the travel agent in bulk. These tickets are the property of the assessee-airline and hence at no stage form the stock-in-trade of the travel agent, as there is no outright purchase of the tickets by the travel agent;

(ii) the relationship between the assessee-airline and the travel agent was that of a principal and agent. The assessee-airline did not bring any evidence on record to show that the supplementary commission retained by the travel agent was passed on to the customers;

(iii) there is no difference between the standard commission paid (as approved by IATA) by the assessee-airline to the travel agent on which the tax at source is deducted and the supplementary commission. The mode of accounting both for standard commission and the supplementary commission is the same;

(iv) the Bureau of Airlines Representatives Association as well as the Travel Agent Association of India had approached the Department whereupon a circular dated 13-11-2002 was issued which clarified the position that supplementary commission was commission within the meaning of Section 194H;

(v) the word ‘indirectly’ used in Section 194H of the Act was wide enough to bring within its ambit even the retention of monies in the form of supplementary commission by the travel agent; and

(vi) lastly, the transaction between the assessee-airline and the travel agent was of the nature of a principal and agent whereby the agent was selling tickets of a fixed amount on commission either in the form of standard commission (as approved by IATA) or special/supplementary commission.

7.1 On the aspect of issuance of a certificate u/s 197 of the Act permitting the deduction of tax at a lower rate or even ‘nil’ rate, the Assessing Officer came to the conclusion that these certificates had been obtained based on applications wherein travel agents had made a mention only with respect to the standard commission. There was no mention of special/supplementary commission. The Assessing Officer was, therefore, of the view that the Section 197 certificate issued by the Department would not extend to exemption from TDS on special/supplementary commission. The supplementary commission could not be categorized as discount since there was no obligation on the travel agent to pass on the special/supplementary commission to the customer. The BSP billing analysis has classified the commission in issue as supplementary commission. Most of the airlines in their books of account have divided the commission into two parts, the first is the standard commission and the other is the supplementary commission. The standard commission is calculated at the rate of 9 per cent or 7 per cent (with effect from 1-1-2002) on which tax at source is deducted. In the assessee-airline’s books of account the supplementary commission is either shown by using the same nomenclature or is shown under the head deals/incentives. Lastly, with effect from 1-4-2002 the entire procedure has undergone a change inasmuch as all airlines have started selling their tickets at net value. This according to the Assessing Officer proved the stand of the Department as being correct.

7.2 Based on the aforesaid the Assessing Officer while holding the assessee-airline as assessee in default directed calculation of interest u/s 201(1A) of the Act to the extent of Rs. 21,13,224. The Assessing Officer of other airlines and Commissioner of Income Tax, Delhi passed orders u/s 201(1) and 201(1A) of the Act in the case of other airlines.

8. Aggrieved by the same, 12 airlines preferred appeals to the Commissioner of Income Tax (Appeals) – XXX, New Delhi [hereinafter referred to as the ‘CIT(A)’]. A reference to the airlines which preferred appeal to the CIT(A) is made in paragraph 2 of his order. The CIT(A) in his order also notes the fact that the Pakistan Airlines has not contested the issue of treatment of supplementary commission being in the nature of commission as held by the Assessing Officer. He notes that the main ground taken by the Pakistan Airlines is that the tax ought to be recovered from the payee and not from the payer.

8.1 The CIT(A) after hearing the submissions of both sides summed up his conclusion in paras 16 and 17 of the impugned judgment. The conclusions being relevant are extracted here in below:

(i) The relationship between the airlines and travel agents is of principal and agent only.

(ii) The amount of supplementary commission mentioned in the billing analysis or BSP is in the nature of commission and supplementary commission.

(iii) There are sufficient reasons to hold that all airlines were knowing the stand of the Income Tax Department on interpretation of provisions of Section 194H that these were applicable to supplementary commission also. In fact in the remand report one Assessing Officer has mentioned that some airlines were already applying these provisions to supplementary commission.

(iv) The certificates u/s 197 were issued by Assessing Officers to some agents in respect of commission only and there was no distinction made by Assessing Officers between standard IATA commission and supplementary commission. Accordingly the credit for such certificates will have to be given while calculating short deduction of tax.

(v) The recovery of tax not deducted has to be made from the airlines only.

(vi) Levy of interest u/s 201(1A) is absolute and there is no relief in this respect.

(vii) The transaction prior to 1-6-2001 will be excluded for applying Section 194H to the supplementary commission.

17. The main ground relating to applicability of provisions of Section 194H to supplementary commission (or incentive or discount) fails. However, appellants would get relief in respect of certificates u/s 197 given to some agents and transaction prior to 1-6-2001.

9. The assessee-airline, being aggrieved, preferred an appeal to the Tribunal. The Tribunal reversed the decision of the CIT(A) and held that the provisions of Section 194H were not attracted in the instant case. Briefly, the Tribunal came to this conclusion by holding that the assessee-airline only receives the net fare. The assessee-airline does not have any means of knowing the price at which the travel agent has ultimately sold the ticket to the customer. The travel agent is required to pay the net fare to the assessee-airline even though he may end up selling the ticket at a price which is less than the net fare. The price which the travel agent obtains over and above the net fare is due to the travel agent’s own efforts in respect of which it does not render any service to the assessee-company. It is entirely open to the travel agent to make endeavours to obtain and realize the best price. The price that the travel agent obtains over and above the net fare does not emanate from the assessee-airline. The excess fare that is the price over the net fare which the travel agent earns may have been earned by virtue of the agency with the assessee-airline. The excess remuneration earned, however, could not be regarded as one which the travel agent realized on account of any services rendered by the travel agent to the assessee-airline. The fact that the assessee-airline comes to know the price at which the travel agent ultimately sold the ticket by referring to the BSP billing analysis statement is of no consequences in view of the fact that the assessee-airline comes to know of this state of affairs only when the statement is received from BSP and not at the time when the tickets are sold and the price is realized by the travel agent.

9.1 The Tribunal also rejected the submissions made on behalf of the revenue that, what is retained by way of difference between the published fare and the net fare was a constructive payment on the ground that what the assessee-airline was entitled to was the net fare and not published fare even if the travel agent were to sell the ticket at the published fare. The Tribunal noted that since assessee-airline had no right to receive any amount received by the travel agent over and above the net fare then based on the theory of constructive payment, it cannot be assumed that the assessee-airline received excess payment from the agent which was paid back by the assessee-airline to the travel agent. The Tribunal noted that there was no material on record to show that the travel agent was required to disclose at the time of sale of ticket the price at which the ticket was actually sold.

9.2 The above findings were summarized by the Tribunal by holding that: (a) the amount realized by the travel agent in excess of net fare could not be considered as commission; (b) the assessee-airline cannot be said to be a person responsible for paying commission to the travel agent; (c) the difference between the net fair and the published fair was not credited to the account of the travel agent in the assessee’s books; and (d) lastly, there was no payment of such excess amount by the assessee-airline to the travel agent in cash or cheque or by any other mode. In these circumstances, the Tribunal set aside the order of the Assessing Officer treating the assessee-airline as assessee in default u/s 201(1) of the Act and also the order passed u/s 201(1A) of the Act levying interest in the sum of Rs. 21,13,224. It is important to note that the Tribunal did not decide the issue of jurisdiction raised by the assessee-airline on the ground that this was within the domain of the CBDT. In view of the fact that the Tribunal had quashed the order of the Assessing Officer u/s 201(1) of the Act the other issue with respect to the issuance of certificate u/s 197 of the Act and the deductibility of the tax with respect to transaction prior to 1-6-2001, one which was decided by the CIT(A), was not considered by the Tribunal.

Submissions of counsel: Revenue

10. The revenue was represented by Ms. Prem Lata Bansal, learned Sr. Standing Counsel and Mr. R.D. Jolly, learned Sr. Standing Counsel. The assessees were represented by Mr. C.S. Aggarwal, Sr. Advocate assisted by Mr. Prakash Kumar, Mr. Aseem Mowar, Advocate, Mr. Mukesh Kumar, Advocate, Mr. Sandeep Sethi, Sr. Advocate assisted by Ms. Padma Priya; Mr. Ajay Vohra, Advocate assisted by Ms. Kavita Jha, Advocate; Mr. P.H. Parekh, Sr. Advocate assisted by Mr. D.P. Mohanty. The submissions made on behalf of the revenue were as follows:

(i) the relationship between the assessee-airline and the travel agent was that of a principal and agent and not one of principal-to-principal. At this point we must point out that except for Thai Airways and Belair Travel & Cargo Ltd. all other airlines have accepted this position;

(ii) the supplementary commission retained by the travel agent was not a discount as claimed by the assessee-airline since it was paid for services rendered by the travel agent in the course of buying and selling of tickets;

(iii) the submission of the assessee-airline that they had a dual/hybrid relationship with their agent, that is, insofar as the transaction which involved payment of standard commission was that of agency, while that which involved the retention of supplementary commission by the travel agent, that is, price obtained over and above the net fare, was a result of a principal-to-principal relationship ought to be rejected, for the reason that no evidence whatsoever was placed by the assessee-airline to establish that there was such a dual relationship between the parties. The Standard Format Agreement (as approved by IATA), that is, the Passenger Sales Agency (PSA) Agreement executed by the assessee-airline was silent as regards any such dual relationship to which the assessee-airline had adverted to;

(iv) a perusal of the billing analysis statement prepared by the BSP undoubtedly revealed that the assessee-airline received the balance amount that is the net fare after deductions made, from the gross fare of standard commission and supplementary commission. The assessee-airline would deduct tax at source from the standard commission but did not deduct the same from supplementary commission. The billing analysis statement clearly indicated that wherever extra commission in the form of special/supplementary commission was paid to the travel agent there was a reference to a deal code. The supplementary commission was nothing but commission within the meaning of Section 194H read with the Explanation which envisaged a payment received or receivable “directly or indirectly” by a person acting on behalf of another person for services rendered or for any services in the course of buying or selling of goods. It was the contention of the learned Counsel that the retention of supplementary commission was covered within the extended meaning of the commission as provided in the Explanation as this was an indirect payment by the assessee-airline to the travel agent. To buttress her submission that the nature of the relationship between the assessee-airline and the travel agent was that of a principal and agent, reference was made to the clauses of PSA Agreement, in particular, the Clauses 3.1, 3.2, 3.3, 3.5, 6.1, 6.2, 7.2, 7.4, 9, 10, 11.2, 11.3, 13 and 15. The attempt was to show that the travel agent could not do anything of his own, that is, without the leave of the assessee-airline;

(v) the main provision of Section 194H included within its ambit payment by cash, cheque, draft or by ‘any other mode’. Thus retention of money by the travel agent was covered by the main provisions of Section 194H. It was also contended that it was not the case of the assessee-airline either before the Assessing Officer or the CIT(A) that the travel agent was required to only remit the net fare to the airlines. It was submitted that this was not even a condition in the PSA Agreement. It was, however, submitted that the very fact that the standard commission had to be computed on gross fare and not on the net fare revealed that this was an afterthought. The Tribunal in proceeding on the lines it did had changed parameters of the case as set out before the Assessing Officer and the CIT(A). It was contended that the net fare was actually arrived at by deducting from the gross fare; tax, standard commission and supplementary commission. While standard commission was fixed by IATA the supplementary commission was variable as it was dependent on the policies of the airline vis-�-vis their agents. If net fare was the basis for the entire transaction then there was no necessity of intervention of BSP to carry out a billing analysis as then the amount payable by the travel agent to the assessee-airline could easily be calculated by taking into account the product of the number of tickets sold and the net fare; and

(vi) lastly, it was contended that the amount of supplementary commission which had to be paid on each transaction was embedded in the deal code which was known only to the three concerned parties, that is, the assessee-airline, the travel agent and BSP. Since the assessee-airline was the person responsible for payment of supplementary commission to the travel agent the tax could have been deducted as and when the billing analysis statement were handed over by the BSP to the airline. It was thus contended that the supplementary commission fell within the ambit of the Explanation to Section 194H and hence assessee-airline was an ‘assessee in default’ within the meaning of the provisions of Section 201(1) of the Act and was thus liable for payment of interest u/s 201(1A) of the Act.

10.1 As regards the issue arising in the second set of appeals with respect to the certificate issued u/s 197 of the Act was concerned, the learned Counsel for the revenue submitted that since the certificate was based on applications which made a reference to only standard commission, supplementary commission was not covered under the said certificate.

10.2 Insofar as the issue raised in the third set of appeals pertaining to issuance of concessional tickets to travel agents is concerned, the learned Counsel submitted that since the very basis of issuing discounted tickets to travel agent was on account of principal agent relationship, the concession constituted commission as the concessional tickets were issued for services rendered by the travel agent to the assessee-airline. In other words the difference between the normal fare and the concessional fare was nothing but additional commission paid by the assessee-airline to the travel agent, within the meaning of provisions of Section 194H. Therefore, the provisions of Sections 201(1) and 201(1A) were attracted even to this case.

Assessee(s)

11. On behalf of assessee-airlines the counsels appearing in ITA No 306/2005 submitted briefly as follows:

(i) supplementary commission was only a nomenclature which finds mention in the billing analysis statement of BSP. The said supplementary commission denotes a notional figure which is the difference between the published fare less standard IATA commission (9 per cent or 7 per cent). The net fare is the amount received by the assessee from its travel agents. In other words the contention is that the supplementary commission is not a ‘commission’ within the meaning of Section 194H of the Act;

(ii) supplementary commission can only be brought within the ambit of Section 194H of the Act, if it fulfils the following criteria as prescribed under the said provision-

(a) the sum received must be in the nature of income,

(b) such income must denote any payment received or receivable directly or indirectly by the payee from the payer, that is, the assessee, and

(c) the recipient should be a person acting on behalf of that another person, and that, the sum received or receivable whether directly or indirectly should be for services rendered in the course of buying and selling of goods, that is, tickets in the present case.

(iii) the Department has not been able to produce any evidence to show that the difference between the published fare and the net fare (is the fare the assessee received from the travel agents) was realized by the travel agents. The difference as reduced by standard commission and taxes which is referred to as supplementary commission is only a notional figure and this cannot be termed as a ‘commission’ within the meaning of Section 194H of the Act. It is contended that what the assessee is entitled to receive is only the net fare. There is no right in the assessee-airline to receive the published fare from the travel agent on sale of tickets. Reference in this regard was made to Clauses 7.1, 7.2 and 3.2 of the PSA Agreement;

(iv) thus the notional figure of supplementary commission as appearing in the billing analysis statement of the BSP is neither income nor can it be construed as payment received or receivable, directly or indirectly by the travel agents in its capacity as the agent of the assessee-airline for any services rendered to the assessee-airline. In this context it was submitted that the billing analysis statement of BSP is not a statement of account as contended by the revenue;

(v) since there was no evidence to suggest that the difference between published fare and the net fare was actually received by the travel agent, there was no obligation on the part of the assessee-airline to deduct tax at source on such notional commission which had not been realized and hence it could not be held to be an assessee in default u/s 201(1) or liable for interest u/s 201(1A) of the Act;

(vi) in these circumstances the provisions of Section 194H of the Act were unworkable. Reliance in respect of this submission was placed on the judgments of the Supreme Court in Commissioner of Income Tax, Bangalore Vs. B.C. Srinivasa Setty, ; and

(vii) lastly, it was contended that it is not disputed that the travel agents had paid tax on the said supplementary commission and hence the revenue was precluded from raising demands on the assessee-airline. Reliance in this regard was placed on the following judgments:

(a) Hindustan Coca Beverages (P.) Ltd v. CIT [2007] 293 ITR 326 .

(b) Commissioner of Income Tax Vs. Adidas India Marketing (P) Ltd., .

(c) CIT v. Select Holiday Resorts (P.) Ltd. [2007] 207 CTR 239(Delhi) .

(d) Commissioner of Income Tax Vs. Majestic Hotel Ltd., .

(e) The Commissioner of Income Tax Vs. Tej Quebecor Printing Ltd., .

(vii)(a) In this context it was submitted that at the most the assessee-airline would be liable for interest u/s 201(1A) of the Act which can be levied only up to the date of payment of tax by the travel agents.

11.1 The submissions on behalf of Belair Travels & Cargo Ltd. in ITA Nos. 105/2008 and 366/2008 by the learned Counsel were more or less similar except as noted hereinabove it was contended on its behalf that the relationship between assessee-airline and its travel agents was not that of principal and agent but that of one principal dealing with another. Furthermore, it was contended that a mere book entry cannot be the basis for imposition of tax when income does not actually accrue or is earned or is received. The counsel submitted that the tickets in issue which were sold were concessional tickets which were sold at a discounted price. The difference between the maximum price and the concessional rate cannot be construed as profit of the travel agent much less profit of the sub-agent. The trade discount is only a book entry and affects nobody.

11.2 Similarly, counsel for the Thai Airways has contended that the relationship between them and their travel agent was not that of principal and agent. Reliance in this regard was placed on Tirumala Venkateswara Timber and Bamboo Firm Vs. Commercial Tax Officer, Rajahmundry, . The remaining submissions were more or less similar.

11.3 In Appeal Nos. 117 and 118 of 2006 the learned Counsel reiterated the submission that the supplementary commission was in the nature of discount which is provided as and when any deal or scheme is announced by the assessee-airline, the travel agents are required to pass on the supplementary commission to ultimate customers/passengers and the fact that it had not been passed, by taking advantage of the lack of knowledge of the passengers, cannot convert what is in the nature of discount into commission within the meaning of provisions of Section 194H of the Act. The supplementary commission is not given in the normal course and is not in relation to services rendered to the assessee-airline by the travel agents. The travel agents do not render any additional or extra services in lieu of supplementary commission. The learned Counsel placed reliance on the judgment of the Kerala High Court in the case of M.S. Hameed Ahmed (supra) and Ahmedabad Stamp Vendors Association Vs. Union of India (UOI), .

11.4 In ITA Nos. 121/2006 and 123/2006 the learned Counsel in addition made a submission which is, that since the Tribunal had dismissed the appeal of the revenue by holding that the supplementary commission did not fall within the ambit of the provisions of Section 194H the issue with respect to the effect of the certificates issued by the Assessing Officer u/s 197(1) of the Act was not decided and hence in case this Court was to hold otherwise, the appeal be remitted to the Tribunal for decision on this aspect of the matter.

11.5 In ITA Nos. 113/2005 and 260/2006 the learned Counsel Mr. O.P. Sapra apart from the submissions made by other counsel has basically relied upon the observations of the Tribunal in the impugned judgment. It was submitted that since the money realized by the travel agent over and above the net fare paid to the assessee-airline is wholly and solely on account of the efforts of the travel agent the same cannot be considered as commission within the meaning of Section 194H of the Act. The assessee-airline is not the source of money received by the travel agents over and above the net fare coupled with the fact that neither the difference between the published and the net fare is credited to the travel agents account in assessee’s books, nor is the payment of the difference between the two paid by the assessee-airline to its travel agents in cash or cheque or by any other mode. In these circumstances it is contended that the supplementary commission cannot be construed as commission and brought within the ambit of Section 194H of the Act.

Our analysis

12. In order to come to a definite conclusion whether Section 194H of the Act would be applicable to the assessee-airline in respect of the transaction, in issue, we propose to first look at the scope and ambit of Section 194H of the Act and then analyse the transaction as to whether it falls within the purview of the said section. In this context, it would be necessary to extract the relevant portions of Section 194H of the Act. The said provision reads as under:

194H. Commission or brokerage.–Any person, not being an individual or a Hindu undivided family, who is responsible for paying, on or after the 1st day of June, 2001, to a resident, any income by way of commission (not being insurance commission referred to in Section 194(D) or brokerage, shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft of by any other mode, whichever is earlier, deduct Income Tax thereon at the rate of ten per cent:

** ** **
Explanation. – For the purposes of this section,–

(i) ‘Commission or Brokerage’ includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities;

13. The extracted portion of Section 194H suggests that except for a situation which is encompassed by the second proviso, it applies to all persons other than an individual or an HUF who is responsible for paying on or after 1-6-2001 to a resident any income by way of commission to deduct tax at source at the time of credit of such income to the account of the payee, that is, the recipient or at the time of payment of such income in cash or by issue of cheque or draft or by any other mode.

13.1 In other words where a person pays to a resident income which is of the nature of commission then that person is obliged to deduct tax at source at any of the said stages, that is, either at the time of credit of such income/commission or at the time of payment which may take the form of cash, cheque, draft or by any other mode.

13.2 Commission under Explanation (i) to Section 194H of the Act is defined in an inclusive manner. Commission under the definition includes payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any service in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing (not being securities). It takes into account a situation where a person renders services to another person for which the person rendering service either receives or is entitled to receive, directly or indirectly, payment from that another person to whom the service is rendered.

14. It is clear that the transaction, in issue, would fall within the provisions of Section 194H only if there is:

(i) a principal-agent relationship between the assessee-airline and the travel agent;

(ii) the payments made by assessee-airline to the travel agent, who is a resident is an income by way of commission;

(iii) the income by way of commission should be paid by the assessee-airline to the travel agent for services rendered by the travel agent or for any services in the course of buying or selling of goods;

(iv) the income by way of commission may be received or be receivable by the travel agent from the assessee-airline either directly or indirectly; and

(v) lastly, the point in time at which obligation to deduct tax at source of the assessee-airline will arise only when credit of such income by way of commission is made to the account of the travel agent or when payment of income by way of commission is made by way of cash, cheque or draft or by any other mode, whichever is earlier.

15. Therefore, the first question that needs to be answered is whether there is a principal-agent relationship between the assessee-airline and the travel agent? As indicated in our discussion above, except for Thai Airways and Belair Airways all other airlines have accepted that the relationship between the assessee-airline and the travel agent is that of principal and agent. Since two airlines have taken a contrary stand, let us examine as to whether the stand that there is a principal-to-principal relationship between the assessee-airline and the travel agent is tenable. For this purpose it would be profitable to look to the definition of an agent in Section 182 of the Contract Act. Section 182 of the Contract Act reads as follows:

182. Agent’ and ‘Principal’ defined–An agent is a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the principal.

16. It is clear from the definition that an agency comes into existence where one person is vested with the authority or capacity to create a legal relationship between person referred to as a principal and an outside third party. Therefore, the basic and essential requisites of an agency ordinarily would be that:

(i) The agent makes the principal answerable to third persons whereby the principal can sue third parties directly and renders himself, that is, the principal, liable to be sued directly by the third parties. – Varsha Engg. (P.) Ltd. v. Vijay Traders AIR 1983 Guj. 168 at pages 168-169, para 5.

(ii) The person who purports to enter into a transaction on behalf of the principal would have the power to create, modify or terminate contractual relationship between his principal, that is, the person whom he represents, and the third parties. – P. Krishna Bhatta v. Mundila Ganapathi Bhatta AIR 1955 Mad. 648 at page 651, para 36.

(iii) An agent, though bound by instructions given to him by the principal does not work under the direct control and supervision of the principal. The agent thus uses his own discretion to act on behalf of the principal subject to the limits to his authority prescribed by the principal – Lakshminarayan Ram Gopal and Son Ltd. Vs. The Government of Hyderabad, . This cited with the approval in Qamar Shaffi Tyabji Vs. The Commissioner, Excess Profits Tax, Hyderabad, .

(iv) There is no necessity of a formal contract of agency, it can be implied which could arise from the act of parties or situations in which parties are put.

17. Let us apply this test to the transaction, in issue.

17.1 For this we shall first advert certain operational aspects of the transaction which are not in issue:- What is not disputed is that LATA monitors the trade in air traffic and lays down guidelines for carrying on civil air transportation business. As a matter of fact LATA prescribes PSA agreements which most airlines have executed with their travel agents. It is also not disputed that in respect of commission which the assessee-airline are required to pay to the travel agent is fixed by LATA. This commission is termed as standard commission. The LATA commission, that is, the standard commission payable by assessee-airline to travel agent prior to 1-7-1999 was 9 per cent and thereafter it dropped to 7 per cent. It is also an admitted fact that insofar as assessee(s)-airline(s) which operate from India are concerned they are required to file a fare list with the Directorate General of Civil Aviation (in short ‘DGCA’) for its approval. This fare which is called the DGCA fare is more often than not below the LATA fare. It is important to note for the period, under consideration, assessee-airline were prohibited from mentioning a fare below the LATA/DGCA approved fare on air tickets. What is of importance is that this is referred to as the published fare on which the commission fixed by LATA, that is, the standard commission is paid by the assessee-airline to their respective travel agents. It is also undisputed that LATA in order to streamline the financial aspects of air transportation service provides a service for settlement of financial transaction between the travel agent(s) and their assessee(s)-airline(s). This is done broadly in the following manner:

(i) LATA prints neutral tickets and distributes them to all agents.

(ii) Agents issue tickets to passengers and sent audit coupons to the BSP.

(iii) The BSP captures the information from these audit coupons and prepares a billing statement which clearly reflects the gross/published fare, standard LATA commission paid to agents as well as the supplementary commission. The net fare payable by the travel agent to the assessee-airline is also reflected in the billing statement.

(v) The travel agent then pays a single cheque to LATA/BSP for tickets sold on behalf of various assessee-airlines, who then distribute the money received to respective assessee-airline.

18. It is not disputed that each billing analysis received from the BSP contains the following details:

(i) The name of the agent

(ii) Identification number of the tickets sold

(iii) Gross value of the tickets sold

(iv) Standard commission or the IATA commission payable to travel agent, and

(v) The supplementary commission, which is the difference between the gross fare, net fare, taxes and standard commission payable to the travel agent.

19. At this stage, it would be important to note two things that the supplementary commission varies from one travel agent to another and also from one transaction to another. The learned Counsel for the assessee-airlines have contended that the supplementary commission which they claim is a discount is paid only on deal tickets. It was, therefore, important to briefly examine as to how the fare-sheet would look. For this purpose we were given a fare-sheet which, we were told, was part of the record below by the learned Counsel for the assessee. The portion of the fare-sheet reads as follows:

SINGAPORE
_________________________________________________________
(1) (2) (3) (4) (5) (6) (7)
_________________________________________________________
ON EX Fare Gross Net SP Code BSP Bkg.
BOM Basis Fares Code Class
_________________________________________________________
QEE3M 26,795 17,500 AG/UT SQSIN3 N
_________________________________________________________

20. A perusal of the extract above would show that this fare-sheet would indicate that for journey which originates from Bombay[see column (1)], the gross or the published fare would be Rs. 26,795 [see column (3)] and the net fare would be Rs. 17,500 [see column (4)]. The net fare is calculated on the basis of the code given under the heading ‘SP Code’ which reads in the instant case as AG/UT [see column (5)]. We were informed by the learned Counsel for the assessee that AG stands for agent and ‘UT’ represents the percentage in numerical terms which the agent would retain from the published fare and the balance would be remitted to the assessee-airline in the form of net fare. In order to understand the code UT which translates into figures we were given the following explanation. The code is encapsulated in the words MOUNTFABER. Each alphabet of these words is represented by figures 1,2,3…. 9 & 0. For convenience it may be read as under:

M O U N T F A B E R
1 2 3 4 5 6 7 8 9 0

21. Therefore, in the code that we are considering which is AG/UT, AG would stand for agent U is equivalent to numerical 3 while T is equivalent to numerical 5. Therefore, in the example given above from the gross fare of Rs. 26,795 the agent would retain 35 per cent of the amount and would be responsible for remitting 65 per cent to the assessee-airline in respect of the transaction, in issue. The assessee has submitted that in the transaction, in issue, it is interested only in receiving 65 per cent of the gross/published fare in the form of net fare. Any amount which the travel agent earns over and above the net fare or does not earn is not the concern of assessee-airline and hence is neither income paid directly or indirectly to the travel agent and, therefore, there cannot be any liability firstly on the assessee-airline to deduct tax at source on the balance 35 per cent, evidently received by the travel agent of which there is no evidence put forth by the Department. In order to appreciate this aspect it may be important to look at the provisions of PSA agreement. In this regard while summarizing the relevant provisions of the PSA a reference will be made to the relevant clauses.

(i) The PSA provides that the travel agent is authorized to sell air passenger transportation services of the carrier and such services of other air carriers as authorized by the carrier(s). (See Clause 3.1 of the PSA agreement).

(ii) All services offered by the carrier are sold by the travel agent on behalf of the carrier. The travel agent is not empowered to vary or modify the terms and conditions setforth in the traffic document used for services provided by the carrier(s) and the agent is obliged to complete the documents in the manner prescribed by the carriers(s). (See Clause 3.2 of the PSA agreement).

(iii) The agent shall make only such representations as authorized in the PSA agreement or by the carrier. In respect of Traffic Documents/Air Tickets previously issued the travel agent is authorized to accept, re-issue, validate or re-validate all such Traffic Documents only in accordance with carrier’s-tarif f conditions, conditions of carriage or written instructions. (See Clauses 3.3 and 3.5 of the PSA agreement).

(vi) Any request made by the passenger shall be forwarded by the agent to the traffic carrier to enable the carrier to extend such services to the customer. (See Clause 3.6 of the PSA agreement).

(v) The agent is prohibited from making any representation which would indicate or imply its office is the office of the carrier or any of its members. (See Clause 5 of the PSA agreement).

(vi) Traffic Documents deposited by the carrier or by the billing settlement plan management on behalf of the carrier, as the case may be, are and will remain the property of the carrier or plan management unless they are issued and delivered pursuant to a transaction. (See Clause 6.1 of the PSA agreement).

(vii) The carrier or the BSP is empowered to carry out an audit or procure audit of the traffic documents as and when it so desires. (See Clause 6.2 of the PSA agreement).

(viii) Where carrier participates in an automated ticketing system for issuance of standard traffic documents or other neutral traffic documents and the travel agent issues such traffic documents through the system on behalf of the carrier, the carrier at any time may withdraw from the agent, the authority to issue neutral traffic documents on its behalf. In the event the agent is in default or suspended in accordance with the sales agency rules, in such situation, the agent is prohibited from issuing neutral traffic documents which he always does on behalf of the carrier. (See Clause 6.3 of the PSA agreement).

(ix) Where money is received by the agent on issuance of traffic documents to the passengers for a transportation or ancillary service, it shall be the agent’s responsibility to remit the amount to the carrier. (See Clause 7.1 of the PSA agreement).

(x) The monies collected by the agent for transportation and ancillary services shall be the property of the carrier and the agent shall hold the monies in trust on behalf of the carrier until satisfactorily accounted for to the carrier and settlement made. (See Clause 7.2 of the PSA agreement).

(xi) The agent is prohibited from pledging, ceding, promising or otherwise transferring to third parties any claim to monies due to the agent or to the carrier, but not yet collected for transportation and ancillary services sold under the PSA agreement. (See Clause 7.3 of the PSA agreement).

(xii) In the event of agent becoming bankrupt all monies due to the carrier or held on behalf of the carrier in connection with the PSA agreement shall become immediately due and payable to the carrier. (See Clause 7.4 of the PSA agreement).

(xiii) Agent is empowered to make representations only in accordance with the carrier’s tariffs, conditions of carriage and written instructions, and against receipts. (See Clause 8 of the PSA agreement).

(xiv) The agent shall be remunerated for sale of air transportation and ancillary services in the manner and amount as may be agreed and communicated to the agent from time to time which shall construed full compensation for services rendered to the carrier. (See Clause 9 of the PSA agreement).

(xv) The agency under the PSA shall be terminated in accordance with sale agency rules, in particular where the carrier withdraws the appointment of agent or agent withdraws from its appointment by the carrier or the agent is removed from the agency list or the agent relinquishes its IATA approval or accreditation. (See Clause 13 of the PSA agreement).

(xvi) The carrier would indemnify and hold the agent harmless for any liability on account of loss, injury or damage whether direct or indirect or consequentially arising in the course of transportation or other ancillary services provided by the carrier pursuant to a sale made by the agent which arises from failure on the part of the carrier to provide such transportation or services. (See Clause 15 of the PSA agreement).

(xvii)The agent also in turns is obliged to indemnify and hold the carrier harmless for any negligence and/or omission on its behalf which causes loss, injury or damage to the carrier. This also includes any loss caused to the carrier resulting from negligent or unauthorized use by the agent or his employees and service by the agent on account of unauthorized issuance of traffic documents through an automated ticketing system. (See Clauses 15.2 and 15.3 of the PSA agreement).

22. A reading of the provisions of the aforesaid clauses would clearly establish that the travel agent acts on behalf of the assessee-airline whereby a legal relationship is established between the assessee-airline and the third party, that is, the passenger. By entering into such a legal relationship on behalf of the principal, that is, the assessee-airline by issuing the traffic documents to a third party, that is, the passenger, the travel agent makes the assessee-airline liable to a legal action by the passengers, that is, the third party. Similarly by virtue of such a transaction, that is, issuance of traffic documents by the travel agent to the passenger it enables the principal, that is, the assessee-airline to sue the third party which is the passenger. The travel agent by virtue of the provisions of the PSA agreement is empowered to create, modify and terminate contractual relationship on behalf of the principal, that is, the assessee-airline. In this context see the provisions of Clauses 3.1 to 3.6 and Clause 8 of the PSA agreement. Furthermore as is evident from a reading of Clause 6, in particular, Clause 6.1 of the PSA agreement the traffic document at any given point in time remain the property of the assessee-airline. As a matter of fact since the traffic documents, that is, the air tickets are issued by the travel agent on behalf of the assessee-airline who is the provider of the air transportation and other ancillary services it holds the travel agent harmless and is obliged to indemnify the travel agent for any loss caused on account of failure to provide such air transportation or other ancillary services contracted for by the travel agent on behalf of the assessee-airline. This situation obtains even where the air tickets are issued by the travel agent on behalf of the assessee-airline through an automated system. Similarly any negligence on behalf of the agent in issuing the traffic documents/air tickets would render him liable to the assessee-airline/the carrier.

22.1 The provisions in the PSA agreement leaves us in no doubt whatsoever that the relationship between the travel agent and the assessee-airline is that of a principal and agent, which is why perhaps none of the airline except Thai Airways and Belair Airways have submitted that their relationship is one which is of a nature of principal-to-principal as against principal and agent.

22.2 We may note here that the learned Counsel Mr. C.S. Aggarwal, Sr. Advocate who appears for Singapore Airlines has informed us that Singapore Airlines has not executed a PSA agreement with its travel agents. Even though such was the situation obtaining in his case, the learned Counsel did not dispute the fact that the relationship between Singapore Airlines and its travel agents was that of principal and agent. Insofar as the learned Counsel for Thai Airways and Belair Airways are concerned, even though they submitted that the relationship between them and their travel agent was not of principal and agent, they did not elaborate as to how their relationship fell within the exception. There is no clue whatsoever in their submissions as to why their travel agent should be treated as not having acted as an agent. The only possible answer to this would perhaps be in the argument which is being taken by all other airlines that insofar as the first leg of the transaction is concerned whereby the travel agent is paid on IATA approved commission, that is, standard commission the relationship between the assessee-airline and the travel agent is one of principal and agent while when it recovers money from the passengers over and above the net fare, and in its own right then the transaction transforms into between one principal and another. We are unable to appreciate that a single transaction whereby a traffic document in the form of an air ticket is sold by a travel agent on behalf of its principal would result in a hybrid relationship, that is, insofar as payment of the IATA/standard commission is concerned the same transaction would be treated as one between a principal and the agent and insofar as the payments over and above the net fare are concerned it would then, in a manner of speaking, metamorphise into a transaction of a different kind, that is, principal-to-principal. Such a submission is completely at odds with the manner in which the transaction is conducted. In our minds, there is no doubt, that the relationship between the assessee-airline and the travel agent is one of principal and agent. This is a finding of fact which is being returned by Assessing Officer and the CIT(A) which has not been upset even by the Tribunal.

23. This brings us to the second leg of the transaction as to whether income by way of commission has been paid by the assessee-airline to the travel agent. It is not disputed that any amount which the travel agent would receive over and above the net fare would be assessed in the hands of the travel agent as profit, gain or income. As a matter of fact one of the submissions of the learned Counsel for the assessee-airline has been that they ought not to be held an assessee-in-default in view of the fact that the supplementary commission, that is, sums received over and above the net fare by the travel agent and retained by them have been disclosed by travel agent as their income on which the travel agents have paid tax. In view of this we find no difficulty in holding that supplementary commission is income within the meaning of Section 194H of the Act.

24. The submission of the some of the learned Counsel for the assessee-airline that the monies retained in the form of supplementary commission are really in the nature of discount rather than commission is not tenable. The fact that this is a payment which the travel agent receives from the passenger by virtue of the sale of the Traffic Documents/Air Tickets of which the assessee is the proprietor at a point till the transaction is made would clearly establish that it is a commission as against the discount. The word ‘discount’ is normally used to describe a deduction from the full amount or value of something, especially a price (see Black’s Law Dictionary VIIth Edition page 477) whereas a commission is defined in Explanation (1) to Section 194H as any payment received or receivable, directly or indirectly by an agent for services rendered acting on behalf of the assessee-airline. In view of the fact that the payment retained by the travel agent is inextricably linked to the sale of the traffic document/air ticket, it cannot but lead to a conclusion that the payment retained which is the supplementary commission, is a commission within the meaning of Section 194H of the Act. This is especially so, as indicated above, at no point in time the travel agent obtains proprietary rights to the Traffic Documents/Air Tickets. There is no value or price paid by him on which the travel agent gets a deduction. The price or value is received by the assessee-airline through the medium of the travel agent from the passenger which is also one of the facets of the services offered by the travel agent. The price or value of the Traffic Document received by the travel agent for and on behalf of the assessee-airline is held in trust. Thus the money retained by the travel agent is commission (supplementary commission) within the meaning of Section 194H of the Act. Therefore, for the assessee-airline to contend, as discussed hereinabove, that insofar as the first leg of the transaction is concerned whereby they pay standard commission to the travel agent on which assessee-airline deduct tax at source, the relationship between the assessee-airline and the travel agent is that of principal and agent, whereas the money or monies which the travel agent retains over and above the net fare is not commission since the relationship transforms-from one which commences as a principal and agent relationship and ends up into that of a principal-to-principal relationship; is completely untenable as there are no two transactions in point of fact. The transaction is a singular transaction which is executed between the travel agent while acting on behalf of the principal airline in selling the traffic documents/air tickets to a third party which is the passenger and thereby creating a legal relationship between the principal that is, the assessee-airline and the third party, which is the passenger. For any enforcement of rights emanating therefrom the principal would have the right to sue the passenger and similarly the passenger would have the right to sue the principal, that is, the assessee-airline.

25. The submission of the assessee-airline which has found acceptance, with the Tribunal and on which an enormous emphasis is laid is that:

(i) there is no evidence as to whether the travel agent has received anything over and above the net fare. As a matter of fact the assessee-airline is not interested in receiving anything from the travel agent over and above the net fare; and

(ii) the assessee-airline is unable to deduct tax at source since it is unaware till a billing analysis is placed before it by the BSP as to the amount received by the travel agent.

26. Insofar as the first submission is concerned that there is no evidence of receipt of money by the travel agent over and above the net fare is answered really by the second submission of the assessee-airline which is that they become aware of the monies received by the travel agent only when the billing analysis is placed on record by the BSP. Therefore, to say that the revenue is seeking to cast the liability on the assessee-airline to deduct tax when there is no evidence of income received by the travel agent is factually an incorrect submission. It should be remembered that what is relevant is whether the Section 194H casts an obligation on the assessee to deduct tax at source. Once an obligation is cast it is for the assessee-airline to retrieve the necessary information from the travel agent who works under its supervision and put itself in a position to deduct tax on the actual income received by the travel agent on sale of each of such traffic documents/air tickets sold on behalf of the assessee-airline. Since the best evidence in respect of the sale of Traffic Documents/Air Tickets is available with the assessee-airline or its agents it cannot in our view take up the stand that the machinery for deduction of tax has failed. The very fact that this information is made available by the billing analysis made by BSP would show that it is possible to retrieve the information by the assessee-airline, therefore, we do not accept the view of the Tribunal that there is no evidence of monies having been received by the travel agent over and above the net fare or that the said information is not available at the relevant point in time and, therefore, the assessee-airline cannot be held to be an assessee-in-default.

27. As regards the submission of the learned Counsel for the assessee-airline that the facts of the present case are in pari materia with the Judgment of the Kerala High Court in M.S. Hameed’s case (supra), we may only note that the said judgment of the Kerala High Court is clearly distinguishable from the facts obtaining in the present case. The points of distinction are as follows:

(i) The case pertains to deduction of tax at source u/s 194G of the Act while the present case pertains to Section 194H of the Act. It is important to note that Explanation (1) which finds mention in Section 194H and sets out the wide definition of expression ‘commission’ does not find mention in Section 194G.

(ii) The Court found as a fact that the sale of lottery tickets by the State Government to registered agents who sold the tickets further to the public or the sub-agents was an out-right sale because registered agents after purchasing the tickets would sell them either directly to the public or to the sub-agents who would further sell it to the public. The tickets were purchased at a discounted price, therefore, the Court came to the conclusion that discount cannot be termed as a commission. It is important to note that the Court in M.S. Hameed’s case (supra) observed that given fact that perhaps the idea behind incorporation of Section 194G was to bring such transactions within the net of Section 194G of the Act, however, since the fiction did not extend to the payments, in issue, it could not be brought within the purview of Section 194G. In the instant case the Legislature by spreading the net wide by inserting Explanation (i) to Section 194H of the Act, has made its intention crystal clear.

27.1 As indicated above the point of distinction here is clearly the Explanation (i) to Section 194H of the Act which did not find mention in Section 194G of the Act. Furthermore, as discussed above in the present case as found as a matter of fact by the Assessing Officer that the billing analysis clearly shows that supplementary commission was received by the travel agent. The several “ifs” which crept up in M.S. Hameed’s case (supra) did not arise in the present case. In our view this case has no applicability to the present fact situation and is clearly distinguishable.

27.2 The counsel for the assessee(s)-airline(s) to buttress their submission that transaction in relation to which supplementary commission was earned by the travel agents was in the nature of contract of sale as against a contract of agency, relied upon the following judgments:

Sri Tirumala Venkatesware Timber & Bamboo Firm’s case (supra) and Ahmedabad Stamp Vendors Association’s case (supra).

21.3 On reading of the judgments it is clear that the distinction between a contract of sale and a contract of agency has to be borne in mind before the transaction can be dubbed as one or the other. In coming to a conclusion one way or the other what would be determinative would be the nature of the transaction and not its form. And this exercise undoubtedly involves delving into both facts and law. The observations in Sri Tirumala Venkatesware Timer & Bamboo Firm’s case (supra) being apposite are culled out hereinbelow:

As a matter of law there is a distinction between a contract of sale and a contract of agency by which the agent is authorised to sell or buy on behalf of the principal and make over either the sale proceeds or the goods to the principal. The essence of a contract of sale is the transfer of title to the goods for a price paid or promised to be paid. The transferee in such a case is liable to the transferor as a debtor for the price to be paid and not as agent for the proceeds of the sale. The essence of agency to sell is the delivery of the goods to a person who is to sell them, not as his own property but as the property of the principal who continues to be the owner of the goods and will therefore be liable to account for the sale proceeds. The true relationship of the parties in each case has to be gathered from the nature of the contract, its terms and conditions, and the terminology used by the parties is not decisive of the legal relationship….

…It is manifest that the question as to whether the transactions in the present case are sales or contracts of agency is a mixed question of fact and law and must be investigated with reference to the material which the appellant might be able to place before the appropriate authority.

27.4 In the instant case in our view the Tribunal has misapplied the law to the facts determined or even those which are undisputed.

27.5 Insofar as the Ahmedabad Stamp Vendors Association’s case (supra) is concerned it is clear that it does not assist the assessee(s)-airline(s), if at all the ratio of the judgment clearly helps the revenue. In the said case the petitioner association whose members were stamp vendors had approached the court, amongst others, with a prayer of declaration to the effect, that the provisions of Section 194H of the Act were not applicable in respect of discount available to them with regard to stamps bought by them at a discount from the State Government. It is in this context the Court was called upon to determine whether the discount made available to the stamp vendors by the State Government was a ‘commission’ or ‘brokerage’ within the meaning of the Explanation (i) to Section 194H of the Act. The Court came to the conclusion that stamp vendors had purchased the stamps at a discounted price and hence the provisions of Section 194H of the Act had no applicability. This is clear from the following observations of the Court:

There is no dispute about the fact that the licensed vendor has to pay the price of the stamp papers less the discount at the rates provided in Appendix III to the Rules, which rates vary from 0.5 per cent to 4 per cent. It is not that the stamp vendor collects the stamp papers from the Government, sells them to the retail customers and then deposits the sale proceeds with the Government less the discount. The liability of the stamp vendor to pay the price less the discount is not dependent upon or contingent to sale of the stamp papers by the licensed vendor. The licensed vendor would not be entitled to get any compensation or refund of the price if the stamp papers were to be lost or destroyed.

** ** **
The crucial question is whether ownership in the stamp papers passes to the stamp vendor when the treasury officer delivers stamp papers on payment of price less discount. The rules themselves contemplate that what the licensed vendor does, while taking delivery of the stamp papers from the Government offices, is purchasing the stamp papers. Clause (b) of Sub-rule (2) of Rule 24 indicates that the discount which the licensed vendor had obtained from the Government was on purchase of the stamp papers…. (p. 213)

28. In view of the above we hold that the supplementary commission which is the amount retained by the travel agent is commission within the meaning of Section 194H read with Explanation (i) to the said section. The assessee-airlines were thus obliged to deduct tax at source at the rate prescribed during the relevant period. The assessee-airline having not deducted the tax at source, they are liable to be held, within the terms of Section 201(1), as assessee(s)-in-default and also liable for payment of interest in terms of Section 201(1A) of the Act. In view of the fact that the Tribunal having coming to the conclusion that Section 194H of the Act was not applicable and hence did not examine any other contention of the assessee-airline, as also, the quantum and the period for which assessee-airline would be entitled to pay interest or to what extent the benefit of the certificate issued to them, if any, u/s 197 of the Act would be available. We allow the following appeals and set aside the impugned judgments passed by the Tribunal in each of these appeals and remand the matter to the Tribunal for examining all other aspects of the matter as also the consequences which would flow therefrom.

29. This leaves us with the third set of appeals which relate to cases where assessee(s)-airline(s) had issued tickets at concessional price to their respective travel agents.

29.1 The learned Counsel for revenue Ms. Bansal, as noted hereinabove, has submitted that even these would come within the ambit of Section 194H of the Act for the reason that the concessional tickets are given to the travel agents for the services rendered by them. Therefore, the difference between the full value of the ticket and the concessional ticket would be the ‘commission’ on which tax at source should have been deducted by the assessee(s)-airline(s).

29.2 The learned Counsel appearing for the assessee(s) refute this submission. They have submitted that the said concessional tickets are for the personal use of the travel agents; they are non-transferable and the difference between the full value of the ticket and the concessional price is not ‘income’ within the meaning of Section 194H of the Act.

29.3 After considering the matter carefully we tend to agree with the submission of the learned Counsel for the assessee(s)-airline(s). The difference in value in these cases cannot be termed as ‘commission’ for the following reasons:

(i) the concessional ticket may have been given to the travel agent for carrying out his function as an agent; however, the transaction between the two is that of principal-to-principal. The travel agent upon payment of concessional price adorns the robe of a customer of the assessee-airline;

(ii) the difference in price is a discount, that is, a deduction on the full value of the ticket;

(iii) no income having been received by the travel agent, it is not offered to tax by them. We are not told that the department sought to tax the travel agent on the difference in price i.e., concession received by the travel agents except to the extent of holding the assessee(s)-airline(s) liable u/s 194H of the Act for failure to deduct tax at source in respect of such concession; and

(iv) lastly, the transferee i.e., travel agent is liable to the transferor i.e., the assessee-airline in its capacity as a debtor and not an agent for the price of ticket as soon the property in ticket passes, to the travel agent.

29.4 Keeping the aforesaid in mind, the appeal of the revenue in CIT v. Lufthansa German Airways in ITA No. 1269/2007 is dismissed.

30. Consequently, in the result the appeal is allowed in ITA Nos. 306/2005, 123/2006, 121/2006, 432/2006, 124/2006, 116/2006, 952/2008, 964/2008, 51/2006, 119/2006, 120/2006, 256/2006, 969/2008, 897/2008, 1501/2006, 1139/2005, 108/2007, 105/2008, 336/2008,117/2006 & 118/2006 in terms of the directions contained in our judgment.

The duty to act Judicially may be inferred from the provisions of the statute

Where  the provisions of the Act are silent, the duty to act Judicially may be inferred from the provisions of the statute or may be gathered from the cumulative effect of the nature of the rights affected, the manner of the disposal provided the objective criterion to be adopted the phraseology used and other indicia afforded by the statute.

It is clear therefore that S. 56 (2) deals with cases where there is a doubt in the mind of the collector in regard to an instrument which comes up before him under the above provisions of the Act as to the construction of the instrument and the provisions of the Act applicable to it. Such doubt itself shows that the point raised for the Collector’s decision is a difficult point of law and from the very nature of the duty to be performed in such circumstances it appears clear that the Chief Controlling Revenue-authority has to decide the matter Judicially and would thus be a quasi-Judicial tribunal.Continue Reading

The agreement to sell with possession is an instrument which requires payment of the stamp duty applicable to a deed of conveyance.

Supreme Court in the case of Avinash Kumar Chauhan v. Vijay Krishna Mishra, (2009) 2 SCC 532, in which it has been held as follows:

“21. It is not in dispute that the possession of the property had been delivered in favour of the appellant. He has, thus, been exercising some right in or over the land in question. We are not concerned with the enforcement of the said agreement. Although the same was not registered, but registration of the document has nothing to do with the validity thereof as provided for under the provisions of the Registration Act, 1908.

22. We have noticed heretobefore that Section 33 of the Act casts a statutory obligation on all the authorities to impound a document. The court being an authority to receive a document in evidence is bound to give effect thereto. The unregistered deed of sale was an instrument which required payment of the stamp duty applicable to a deed of conveyance. Adequate stamp duty admittedly was not paid. The court, therefore, was empowered to pass an order in terms of Section 35 of the Act.” To put the record straight, the correctness of the impugned judgment (Laxminarayan & Ors. v. Omprakash & Ors., 2008 (2) MPLJ 416) came up for consideration before a Division Bench of the High Court itself in Writ Petition No. 6464 of 2008 (Man Singh (deceased) through Legal Representatives Smt. Sumranbai & Ors. v. Rameshwar) and same has been overruled by judgment dated January 22, 2010. The High Court observed as follows:

“8. A document would be admissible on basis of the recitals made in the document and not on basis of the pleadings raised by the parties. In the matter of Laxminarayan (supra), the learned Single Judge with due respect to his authority we don’t think that he did look into the legal position but it appears that he was simply swayed away by the argument that as the defendant was denying the delivery of possession, the endorsement/recital in the document lost all its effect and efficacy.

9. It would be trite to say that if in a document certain recitals are made then the Court would decide the admissibility of the document on the strength of such recitals and not otherwise. In a given case, if there is an absolute unregistered sale deed and the parties say that the same is not required to be registered then we don’t think that the Court would be entitled to admit the document because simply the parties say so. The jurisdiction of the Court flows from Sections 33, 35 and 38 of the Indian Stamp Act and the Court has to decide the question of admissibility. With all humility at our command we over-rule the judgment in the matter of Laxminarayan (supra).”

In  Omprakash Vs. Laxminarayan & Ors. [OCTOBER 7, 2013The plaintiffs filed a suit for specific performance of contract and their case is founded on the agreement to sell executed on 27th December, 2000. The agreement to sell acknowledges payment of the part of consideration money and further giving actual physical possession to the purchaser by the seller. Though the defendants dispute that, but in our opinion, for determination of the question of admissibility of a document, it is the recital therein which shall be decisive. Whether the possession in fact was given or not in terms of the agreement to sell is a question of fact which requires adjudication. But, at the time of considering the question of admissibility of document, it is the recital therein which shall govern the issue. It does not mean that the recital in the document shall be conclusive but for the purpose of admissibility it is the terms and conditions incorporated therein which shall hold the field. Having said that, we proceed to consider as to whether the document in question is “conveyance” within the meaning of Section 2(10) of the Act. Section 2(10) of the Act reads as follows:

2. Definitions. -In this Act, unless there is something repugnant in the subject or context, –

xxx xxx xxx

(10)”Conveyance” includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for by Schedule I;

xxx xxx xxx”

From a plain reading of the aforesaid provision, it is evident that an instrument by which movable or immovable property is transferred, comes within the expression “conveyance”. In the present case, an immovable property is transferred on payment of part of the consideration and handing over the possession of the property. It is relevant here to state that by the Indian Stamp (Madhya Pradesh Second Amendment) Act, 1990 (Act No.22 of 1990) few Articles including Article 23 of Schedule 1- A has been substituted and Explanation has been added to Article 23. The Explanation appended to Article 23 of Schedule 1-A of the Stamp Act as substituted by Section (6) of Act 22 of 1990 reads as follows:

“Explanation.-For the purpose of this article, where in the case of agreement to sell immovable property, the possession of any immovable property is transferred to the purchaser before execution or after execution of, such agreement without executing the conveyance in respect thereof then such agreement to sell shall be deemed to be a conveyance and stamp duty thereon shall be leviable accordingly:

Provided that, the provisions of Section 47-A shall apply mutatis mutandis to such agreement which is deemed to be a conveyance as aforesaid, as they apply to a conveyance under that section:

Provided further that where subsequently a conveyance is effected in pursuance of such agreement of sale the stamp duty, if any, already paid and recovered on the agreement of sale which is deemed to be a conveyance shall be adjusted towards the total duty leviable on the conveyance, subject to a minimum of Rs. 10.”

The aforesaid Explanation has come into effect with effect from 26th September, 1990. The Explanation, therefore, creates a legal fiction. The agreement to sell shall be deemed to be a conveyance and stamp duty is leviable on an instrument whereby possession has been transferred. Thus the agreement to sell in question is a conveyance within the meaning of Section 2(10) of the Act and is to be duly stamped. Section 35 of the Act makes instruments not duly stamped inadmissible in evidence, the relevant portion whereof reads as follows:

“35. Instruments not duly stamped inadmissible in evidence, etc.- No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped:

Provided that-

(a)any such instrument shall be admitted in evidence on payment of the duty with which the same is chargeable or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion;

xxx xxx xxx.”

From a plain reading of the aforesaid provision, it is evident that an authority to receive evidence shall not admit any instrument unless it is duly stamped. An instrument not duly stamped shall be admitted in evidence on payment of the duty with which the same is chargeable or in the case of an instrument insufficiently stamped, of the amount required to make up such duty together with penalty. As we have observed earlier, the deed of agreement having been insufficiently stamped, the same was inadmissible in evidence. The court being an authority to receive a document in evidence to give effect thereto, the agreement to sell with possession is an instrument which requires payment of the stamp duty applicable to a deed of conveyance. Duty as required, has not been paid and, hence, the trial court rightly held the same to be inadmissible in evidence. The view which we have taken finds support from a decision of this Court in the case of Avinash Kumar Chauhan v. Vijay Krishna Mishra, (2009) 2 SCC 532