1963 (1) TMI 65 - SC - Indian Laws

Summary

Issues Involved:
1. Whether the instrument executed in Uttar Pradesh but bearing stamps overprinted with "West Bengal" is duly stamped under the Indian Stamp Act as amended by the Uttar Pradesh Legislature.
2. Whether the Board of Revenue, Uttar Pradesh, was correct in demanding additional stamp duty.
3. Constitutionality of Rule 3 of the Stamp Rules framed by the Uttar Pradesh Government.
4. Whether the State of West Bengal had illegally exacted the stamp duty paid by the petitioner.

Detailed Analysis:

Issue 1: Whether the instrument executed in Uttar Pradesh but bearing stamps overprinted with "West Bengal" is duly stamped under the Indian Stamp Act as amended by the Uttar Pradesh Legislature.
The primary question is whether an instrument executed in Uttar Pradesh, which bears stamps overprinted with "West Bengal," is duly stamped under the Indian Stamp Act as amended by the Uttar Pradesh Legislature. The court held that when a public officer in Uttar Pradesh has to decide whether an instrument is "duly stamped," he must apply the Indian Stamp Act as modified by the Uttar Pradesh Legislature. Section 3 of the Stamp Act, as amended by the Uttar Pradesh Legislature, mandates that instruments executed in Uttar Pradesh must bear stamps issued by the Uttar Pradesh Government. Rule 3 of the Uttar Pradesh Stamp Rules requires that stamps must be overprinted with "Uttar Pradesh" or "U.P." Since the instrument bore stamps overprinted with "West Bengal," it was not in compliance with the law in force in Uttar Pradesh. Therefore, the public officer was correct in holding that the instrument was not duly stamped.

Issue 2: Whether the Board of Revenue, Uttar Pradesh, was correct in demanding additional stamp duty.
The Board of Revenue, Uttar Pradesh, decided that the original document, executed in Uttar Pradesh, must bear stamps issued by the Uttar Pradesh Government. The Board rejected the argument that the document was not an instrument and could bear stamps issued by the West Bengal Government. The Board held that the petitioner was liable to pay Rs. 1,74,000 as stamp duty on the original document before availing of the concessional rate for the substituted security. The court upheld this decision, stating that the instrument must be stamped in accordance with the law of the state where it was executed. Since the instrument was executed in Uttar Pradesh, it had to bear Uttar Pradesh stamps.

Issue 3: Constitutionality of Rule 3 of the Stamp Rules framed by the Uttar Pradesh Government.
The petitioner challenged Rule 3 of the Stamp Rules framed by the Uttar Pradesh Government as unconstitutional, arguing that it constituted an unreasonable restriction on the petitioner's fundamental rights under Article 19(1)(f) and 19(1)(g) of the Constitution. The court did not find merit in this argument. It held that Rule 3, which requires stamps to be overprinted with "Uttar Pradesh" or "U.P.," is a valid exercise of the state's power to regulate the sale and use of stamps within its jurisdiction. The rule was found to be consistent with the provisions of the Stamp Act and necessary for ensuring proper stamp duty collection.

Issue 4: Whether the State of West Bengal had illegally exacted the stamp duty paid by the petitioner.
The petitioner alternatively contended that the State of West Bengal had illegally exacted Rs. 1,08,751 as stamp duty without any authority of law, thereby infringing the petitioner's fundamental rights under Article 19(1)(f) and 19(1)(g) of the Constitution. The learned Solicitor-General, however, did not press this contention against the State of West Bengal. The court did not address this issue in detail, as it was not seriously pressed during the arguments.

Conclusion:
The court dismissed the petition, holding that the instrument executed in Uttar Pradesh was not duly stamped as it did not bear stamps overprinted with "Uttar Pradesh" or "U.P." The Board of Revenue, Uttar Pradesh, was correct in demanding additional stamp duty. Rule 3 of the Stamp Rules framed by the Uttar Pradesh Government was found to be constitutional. The petitioners were not entitled to any relief, and the parties were ordered to bear their own costs.