1999 (5) TMI 636 - HC - Indian Laws

Summary

Issues:
1. Whether the subsequent notification under Section 9 of the Indian Stamp Act can impose stamp duty.
2. Who is liable to pay the stamp duty on the contract.
3. Whether the subsequent notification removes the exemption on stamp duty.
4. Whether the limit of five thousand rupees applies to specific instruments or all instruments mentioned in the notification.

Analysis:

1st Issue - Imposition of Stamp Duty by Notification (Section 9):
The subsequent notification dated 14.1.1982 did not impose fresh stamp duty but merely amended the existing exemption. The power to issue notifications includes the authority to add, amend, or rescind provisions. The State Government's action in issuing the subsequent notification was within its jurisdiction, and the stamp duty was not newly imposed. The question of whether the stamp duty exemption was lifted is a separate matter to be addressed.

2nd Issue - Liability to Pay Stamp Duty:
In the case of conveyance contracts like the one in question, the grantee is responsible for paying the stamp duty as per Section 29 of the Act. The petitioner, being the grantee, is liable to bear the stamp duty expenses. The terms of the contract also specify that the buyer, in this case, the petitioner, is obligated to pay the stamp duty and registration fees. Thus, the petitioner is legally bound to pay the stamp duty.

3rd Issue - Removal of Stamp Duty Exemption:
The exemption under the notifications pertains to conveyance of forest produce in Government forests. The contract for resin purchase falls under the first part of item No. 11, which covers general conveyance of forest produce. While the subsequent notification introduced a value limit of five thousand rupees for exemption, there is ambiguity regarding whether this limit applies to specific instruments or all instruments mentioned. The Court noted that the semi-colon in the notification's wording could be misleading, and suggested the State clarify the ambiguity. However, the Court did not find sufficient grounds to rule against the State on this issue, rendering the fourth point irrelevant.

Conclusion:
The Court dismissed the writ petitions, upholding the State's authority to charge stamp duty on resin contracts and affirming the petitioner's liability to pay the duty as the grantee. The judgment emphasized the need for clarity in legal notifications to avoid ambiguity and recommended the State address such issues for future reference.