The stamp act 1899
Hafiz M.Azeem
Stamp act;
For legalizing the
document of the people. It
is applicable where one conveys his right to other, e.g., partnership deed,
sale deed, gift deed etc.
Meaning;
For legalizing the
document for which amount is paid.
Nature;
(i)
Substantive
(ii)
Objective
Objective;
Aims
and objectives of Stamp Act can be described as under:
1.
To increase government income
2.
Regularization of document
3.
Elimination of dought
4.
Collection of revenue
5.
Evidentiary value of document
6.
Creation of rights
7.
Registration on duty payment
8.
Penalization on unpaid duty
9.
Prevention of fraud and loss to
government
10.
Consolidation the law relating to
stamps
How to achieve these objectives;
1.
Registering the documents
2.
Public officers should not accept
un-stamped documents
3.
Making the offences
Which instruments are chargeable under stamp act and which
are exempted?
Relevant law:
Section 3, schedule 1
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 [1][20][Pakistan] on or after the first day
of July, 1899;
(b) every bill of exchange [2][21][payable otherwise than on demand] [3][22][* * *] or promissory note drawn or
made out of [4][23][Pakistan] on or after that day and
accepted or paid, or presented for acceptance or payment, or endorsed,
transferred or otherwise negotiated, in [5][24][Pakistan]; and
(c) every instrument (other than a bill of
exchange [6][25][* * *] or promissory note) mentioned
in that Schedule, which, not having been previously executed by any person, is
executed out of [7][26][Pakistan] on or after that day,
relates to any property situate, or to any matter or thing done or to be done,
in [8][27][Pakistan] and is received in [9][28][Pakistan]:
Provided
that no duty shall be chargeable in respect of–
(1) any
instrument executed by, or on behalf of, or in favour of, the [10][29][Government] in cases where, but for
this exemption, the [11][30][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[12][31], or the Registration of Ships Act,
1841[13][32], as amended by subsequent Acts.
Object:
Collection of revenue
Instruments
chargeable with duty u/s 3:
Following
documents are liable to pay stamp duty:
1)
Instruments which are listed in
schedule 1.
Essential
conditions,
·
Not exempted in schedule 1
·
Not exempted in any other act after
1st July 1899
2)
Foreign instruments which are
negotiated in Pakistan.
·
Bill of Exchange and
·
Promissory Note,
Which are drawn out of Pakistan but negotiated in Pakistan require stamp
duty.
Essential conditions,
·
Acted upon Pakistan and execution in
foreign
·
1st july 1899
·
Not to be payable on demand
3)
Foreign instruments relating to
property existing in Pakistan.
Essential
conditions,
·
Must executed in Pakistan
·
Not to be executed before someone
else
·
1st July
Nature of stamp act in respect of
execution:
·
Legality of the act to enforce all
the instruments which stamp duty
·
True intention
·
Execution must be on instrument not
on transaction
Those instruments which are exempted
are as under:
1.
Instruments which are made by
government.
2.
Instruments which are exempted in
stamp act or under any special law.
i.e.
·
Mercantile act 1894.
·
Registration of ship act 1842.
3.
Instruments which are exempted by
local authorities.
4.
Instruments which are exempted by
special order passed by the provincial government or remitted by the
government.
These are
primarily, and such other examples are
1.
Instrument executed by government.
2.
Instrument executed on the behalf of
government.
3.
Instrument executed in favour of
government.
4.
Instrument of sale of ship.
5.
Instrument of transfer of ship.
6.
Instrument relating to ship.
7.
Instrument of the mortgage of ship.
8.
Where local government exempts.
What is a receipt and what is the penalty on refusal to give
receipt?
Introduction:
Under the stamp act, a person who
receives money more than 20 rupees is liable to give receipt upon it.
Relevant law:
Section 30, and if he refuses to
give receipt then section 62, 65 are applicable.
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.
[14][81][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].
(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 [16][145][payable otherwise than on demand] [17][146][* * *] 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 [18][147][one thousand] 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 [19][148][one 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;
Definition:
Section 2(23)
2(23) “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;
Types:
·
To
give on demand
·
Compulsory
To give on demand:
According to section 30;
a) Principles regarding section 30
Ø No specific form
Ø Mere signatures are enough
Ø Acknowledgement is essential
b) Essentials;
Ø Prove of demand
Ø Stipulation of purpose
c) Liable to give receipt, and if
refuses, what are the punishments;
Ø Liable under section 65, fine upto
200 rupees.
Ø If he issues an un-stamped receipt,
then liable under section 62, and will be held in criminal prosecution, and
fine can be imposed upto 1000 rupees.
And
for criminal prosecution, necessary conditions are;
·
Prove
of demand
·
His
refusal
·
Collection
sanction
Compulsory receipt: (section 30)
a) Essential in renewal of any
agreement relating to movable property, bill of exchange, promissory note.
And
if he refuses to give receipt, then section 62 and 65 applicable.
b) Time limitation, he is liable to
give receipt in 3 months.
Examination
and impounding of instruments and inadmissibility
Examination
and impounding of instrument u/s 33:
The
Civil Judge had the authority to impound (confine, confiscate) the document if
he is of opinion that document is not sufficiently stamped. He could admit the
document in evidence if eleven times the stamp duty was paid. If the document
was not admitted in evidence then S. 38 (2) was applicable and the document was
to be sent to the Collector. U/s 38 (2) he could only send to the Collector, he
had no power to impose penalty.
Who
examines:
1)
Public officers,
a)
Judge
b)
Registrar
2)
Commissioner.
3)
Any person authorized by law.
4)
Any person appointed with the
consent of parties.
What
is impounding:
It
means (confine, confiscate) after examination to take in possession of any
suspected instrument.
Relevant
law:
Section
33, and section 35
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 [21][88][Pakistan] 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[22][89];
(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) [23][90][the Provincial Government] may
determine[24][91] what offices shall be deemed to be
public offices; and
(b) [25][92][the Provincial Government] may
determine who shall be deemed to be persons in charge of public offices.
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–
[26][94](a) any
such instrument not being an instrument chargeable with a duty [27][95][not exceeding twenty-five paisa]
only, or a bill of exchange or promissory note, shall, subject to all just
exceptions, 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[28][96];
(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 [29][97][the Government], or where it bears
the certificate of the Collector as provided by section 32 or any other
provision of this Act.
Main
object:
It
is defined in section 3.
That
is the instrument chargeable.
Object
of examination and impounding:
1)
Proper scrutinizing for the Stamp
Act.
2)
To help the criminal provisions
relating to the Stamp Act.
Conditions for examination and
impounding:
1) No or unstamped/false stamped
2) Present before competent authority
3) Before time of accepted evidence
Procedure:
1) All competent authorities
2) Examine the instrument
3) Satisfaction
4) Endorsement of presiding officer
Admissible or not:
Section 35 deals with it.
·
If
admissible then can be presented as an evidence in court of law.
·
And
if not admissible then it can’t be presented as an evidence in court of law.
Penalty:
In case of not admissibility, fine
upto rupees 5.
Exceptions:
1) After payment of penalty, it becomes
admissible. Agreement u/s 35A.
2) Criminal procedure code is not applicable.
3) Instrument relating to government.
Particular
offences in Stamp Act 1899
Offences
under Stamp Act u/s 62 to 69: Following are the offences under Stamp Act:
a.
Drawing Bill of Exchange or
Promissory Note without stamps other as witness
b.
Making Bill of Exchange or
Promissory Note without stamps other as witness
c.
Issuance Bill of Exchange or
Promissory Note without stamps other as witness
d.
Transferring Bill of Exchange or
Promissory Note without stamps other as witness
e.
Signing Bill of Exchange or
Promissory Note without stamps other as witness
f.
Execution Bill of Exchange or
Promissory Note without stamps other as witness
g.
Voting as proxy without affixing
stamps
h.
Attempting to vote as proxy without
affixing stamps
i.
Failure to cancel stamps: Penalty is
Rs. 200/-/ as fine.
j.
Defraud to government
k.
Refuses to give receipt
l.
Separate receipts to defeat stamps
m.
Postdating Bill of Exchange to
defraud government
n.
Disobey rules in selling stamps
o.
Selling stamps without appointment
Relevant law:
Section 62 to 72
(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 [31][145][payable otherwise than on demand] [32][146][* * *] 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 [33][147][one thousand] 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 [34][148][one thousand] 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 [35][149][two 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;
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;
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;
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 [39][153][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 [40][154][two 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, practices 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;
69. Penalty for breach of rule relating to sale
of stamps and for unauthorised 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 [42][156][five paisa, fifteen paisa, or
twenty-five paisa revenue] adhesive stamp;
shall be punishable with imprisonment
for a term which may extend to six months, or with fine which may extend to [43][157][one thousand] 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 [44][158][the [45][159][Provincial Government]] generally,
or the Collector specially, authorises in that behalf.
(2) The [46][160][Chief Revenue Authority], or any
officer generally or specially authorized 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 [47][161][* * *] 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 [48][162][* * *] in which such instrument is
found as well as in any district [49][163][* * *] in which such offence might be
tried under the Code of Criminal Procedure for the time being in force.
[1][20]Substituted
by the Central Laws (Statute Reform) Ordinance, 1960 (XXI of 1960), section 3
and 2nd schedule (with effect from the 14th October, 1955), for “the Provinces
and the Capital of the Federation”, which had been substituted by the
Adaptation of Central Acts and Ordinances Order, 1949 (G.G.O. 4 of 1949),
Articles 3(2) and 4, for “British India”.
[4][23]Substituted
by the Central Laws (Statute Reform) Ordinance, 1960 (XXI of 1960), section 3
and 2nd schedule (with effect from the 14th October, 1955), for “the Provinces
and the Capital of the Federation”, which had been substituted by the
Adaptation of Central Acts and Ordinances Order, 1949 (G.G.O. 4 of 1949),
Articles 3(2) and 4, for “British India”.
[7][26]Substituted
by the Central Laws (Statute Reform) Ordinance, 1960 (XXI of 1960), section 3
and 2nd schedule (with effect from the 14th October, 1955), for “the Provinces
and the Capital of the Federation”, which had been substituted by the
Adaptation of Central Acts and Ordinances Order, 1949 (G.G.O. 4 of 1949),
Articles 3(2) and 4, for “British India”.
[10][29]Substituted
by the Stamp (West Pakistan Amendment) Ordinance, 1959 (XLVI of 1959), for
“Crown”.
[15][144]For
modification of provisions in respect of instruments to which the Stamp
(Specified Instruments) Act, 1924 (XIII of 1924), applies, see section 3 of that Act.
[21][88]Substituted
by the Central Laws (Statute Reform) Ordinance, 1960 (XXI of 1960), section 3
and 2nd schedule (with effect from the 14th October, 1955), for “the Provinces
and the Capital of the Federation”, which had been substituted by the
Adaptation of Central Acts and Ordinances Order, 1949 (G.G.O. 4 of 1949),
Articles 3(2) and 4, for “British India”.
[23][90]The original
words “the G.G. in C”. were first substituted by the Government of India
(Adaptation of Indian Laws) Order, 1937 as amended by the Government of India
(Adaptation of Indian Laws) Supplementary Order, 1937, and then amended by the
Stamp (West Pakistan Amendment) Ordinance, 1959 (XLVI of 1959).
[24][91]For the
purposes of this section the office of a returning officer appointed for the
purposes of an election to a legislative body constituted under the Government
of India Act is not a public officer, see
Gazette of India, 1920 (Pt. I, p. 2136).
[25][92]The original words “the Local Government” were first substituted by the
Government of India (Adaptation of Indian Laws) Order, 1937 as amended by the
Government of India (Adaptation of Indian Laws) Supplementary Order, 1937 and
then amended by the Stamp (West Pakistan Amendment) Ordinance, 1959 (XLVI of
1959).
[26][94]For
modifications of this provision in respect of instruments to which the Stamps
(Specified Instruments) Act, 1924 (XIII of 1924), applies see section 3 of that Act.
[27][95]Substituted
by the Stamp (West Pakistan Amendment) Act, 1964 (II of 1964), for “one anna or half an anna”.
[29][97]The original
words “the Govt.” were first substituted by the Government of India (Adaptation
of Indian Laws) Order, 1937 as amended by the Government of India (Adaptation
of Indian Laws) Supplementary Order, 1937 and then amended by the Stamp (West
Pakistan Amendment) Ordinance, 1959 (XLVI of 1959).
[30][144]For
modification of provisions in respect of instruments to which the Stamp (Specified
Instruments) Act, 1924 (XIII of 1924), applies, see section 3 of that Act.
[42][156]Substituted
by the Stamp (West Pakistan Amendment) Act, 1964 (II of 1964), for “one anna or half an anna”.
[44][158]Substituted by the Government of India (Adaptation of Indian Laws) Order,
1937 as amended by the Government of India (Adaptation of Indian Laws)
Supplementary Order, 1937, for “the Local Government”.
[45][159]Substituted by the Stamp (West Pakistan Amendment) Ordinance, 1959 (XLVI
of 1959), for “Collecting Government”.
[46][160]Substituted,
by the Central Laws (Adaptation) Order, 1961 (A.O. 1 of 1961), Article 2 and
schedule for “Chief Controlling Revenue Authority (with effect from the 23rd March,
1956).
[47][161]The words
“Presidency Magistrate or”, omitted by the Adaptation of Central Acts and
Ordinances Order, 1949 (G.G.O. 4 of 1949).
[48][162]The words “or
Presidency Town”, repealed by the Federal Laws (Revision and Declaration) Act,
1951 (XXVI of 1951), section 3 and 2nd Schedule.
Thank you Azeem sahib for simplifying the stamp act for general public and law students !
ReplyDeleteSir, whats its validity or expiration?
ReplyDeleteMay you tell me that when rupees 10,20,40 and 100 stamp paper had been issued/used...
ReplyDelete