Published on: 31 August 2023 at 10:30 IST
Court: Supreme Court
Citation: New Central Jute Mills Co. Ltd. V. State of W.B. (1963)
Honourable Supreme Court of India has held that if an instrument after becoming liable to duty in one State on execution there becomes liable to duty also in another State on receipt there as well. Example if an instrument had been stamped in accordance with the law of West Bengal could not justify a conclusion that it had been stamped in accordance with the law in force in of the State of U.P.
14. Primarily, the liability of an instrument to stamp duty arises on execution. Execution in India itself made the instrument liable to stamp duty under Section 3(a) as it stood before the amendment. Under Section 3(c) execution out of India, where the instrument relates to property situated or any matter or thing done or to be done in India together with the further fact that the instrument is received in India, made the instrument chargeable with duty.
In amending the Stamp Act what the State legislatures substantially did was to treat the particular State as equivalent to India. Thus, after the amendment by the U.P. legislature the position in law is that execution of an instrument in Uttar Pradesh is made the primary dutiable event and liability to stamp duty arises on such execution. Apart from that, liability also arises where the instrument though executed out of Uttar Pradesh relates to property situated or any matter or thing done or to be done in Uttar Pradesh and is received in Uttar Pradesh. It may be mentioned that the changes in the law made by the other State legislatures are exactly similar.
21. The mortgage deed which is the subject-matter of the present petition was executed in Uttar Pradesh, though it related to property situated in West Bengal and was received in that State for registration. The first dutiable event was the execution, which took place in U.P.; the second dutiable event was the receipt in West Bengal. When it came before the officers of Uttar Pradesh for decision whether it was duly stamped or not, the officers of Uttar Pradesh were bound to hold—for the reasons we have discussed earlier—that the instrument was not duly stamped as it did not bear Uttar Pradesh stamps.
Drafted By Abhijit Mishra
