The Stamp duty is a legal tax payable in full and it has an evidentiary value in the courts of law. The stamp duty for different types of documents is prescribed in Indian Stamp Act, 1899 (Act) but some documents do not have predetermined stamp duty given in the act. Therefore, as per Section 31 of the Act, the adjudication of the applicable stamp duty would have to be made by the concerned Collector of Stamps.

A stamp duty paid instrument/document is considered a proper and legal instrument/document and has evidentiary value and is admitted as evidence in courts. Section 35 of the Act states that any instrument chargeable with stamp duty will not be considered as evidence unless it has been duly stamped. Stamp duty is collected on the basis of property value at the time of registration. Stamp duties amount varies from state to state and also property types old or new.

The adjudication of the stamp duty is sometimes delayed by the concerned authority thereby causing a delay in the registration of documents because the time limit for this adjudication is not given in the act.

The Delhi High Court in Uno Minda v. Deputy Commissioner Revenue Department and Reebok India Company v. Govt of NCT of Delhi and Ors. case has given directions prescribing a time limit for the adjudication of the stamp duty by the Collector of Stamps. The court directed that the stamp duty payable will be adjudicated and communicated within 30 days. In case of complexity or extraordinary circumstances, the adjudication can be further extended for a maximum period of three months from the date of application.

Background of the case:
This judgment disposed of two different matters pertaining to the same legal issue i.e., delay in adjudication of the stamp duty by the Collector of Stamps. The petitioner argued that they are suffering problems due to the delay in adjudication of the stamp duty. The Delhi High Court in this judgment issued directions setting the time limit for the adjudication.

Facts:

1. In pursuant to the scheme of amalgamation of five Harita group companies with Uno Minda Ltd., the petitioner intends to get the documents registered and duly stamped. The petitioner has applied to the Divisional Commissioner, Revenue Department, GNCTD seeking adjudication of the stamp duty which is being delayed by the said authority and thus this petition has been filed by the petitioner seeking issuance of directions to the Respondents to adjudicate the stamp duty payable.
    
2. The second case is that the petitioner Reebok has converted its debentures into shares and seeks the issuance of stamp paper for the share certificates. Despite several requests over more than 1 year, the respondents have not issued challans to Reebok to purchase the stamp duty to be paid on the Share Certificate. Thus, Reebok has filed the petition that the Respondents be directed to issue the challans.

Issue:

1. What will be the relief in case of delay in adjudication of the stamp duty by the Collector of Stamps since the time limit for adjudication is not prescribed in the Act?

Ratio Decidendi:

1. Some documents have not the predetermined stamp duty given in the Indian Stamp Act, 1899. (ACT). Therefore, Section 31 of the Act shows that adjudication of the proper stamp duty would have to be made by the concerned Collector of Stamps. However, the time limit of the adjudication is not fixed under the Act.
    
2. However, some documents have a fixed time to get itself registered for which the adjudication of correct stamp duty is needed under a specific time period. For example, under Section 56 of the Companies Act, 2013 the company cannot register the transfer of securities unless the instrument of transfer is duly stamped, dated, and executed. Section 56(4) requires the said transmission to take place within a period of two months from the date of allotment or from the date of incorporation. In the case of allotment of debentures, the time limit fixed is six months.
    
3. The court observed that "the activities of individuals and companies would be depended upon various documents, instruments of transfer, etc., and the first step would be to seek adjudication of the stamp duty under Section 31 of the Indian Stamps Act, 1899, a time limit would be required to be followed by the Collector of Stamps for the said adjudication."[1]

Judgement:
The Court opined that a reasonable time should be fixed for the adjudication of the stamp duty. The court directed that the Collector of Stamps will adjudicate and communicate the stamp duty payable within 30 days. In case of complexity or extraordinary circumstances, the adjudication of stamp duty can be extended for a maximum period of three months from the date of application.

The court ordered for the present cases, the stamp duty to be adjudicated and communicated within 30 days by the respondents.

End-Notes:

1. Uno Minda Limited vs. Deputy Commissioner Revenue Department (24.04.2023 - DELHC): MANU/DE/2985/2023