Stamp Duty refers to the duty levied by the State for the purpose of registering a document. Under the Constitution of India, Article 246, Schedule 7[1], Stamp Duty is a Union as well as a State subject, which means that the State is entitled to levy and legislate upon matters, except those which are in the purview of the Union Legislature:


Seventh Schedule, Union List: Entry 90 provides as follows Rates of the stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies, and receipts.

Seventh Schedule, State List: Entry 63: Rates of stamp duty in respect of documents other than those specified in List I

Stamp Paper refers to paper bearing a pre-printed Revenue Stamp. The purpose of Stamp Papers is to collect taxes on documents that require stamping (such as leases, agreements, etc.,) Stamp Papers can be divided into two types:

• Judicial/Court Fee Stamp Paper:
  Facilitates payment of Court Fees. A case before a Court of Law is admitted after such Payment of Court Fees has been made.
   
• Non-Judicial:
  Facilitates the execution of documents and agreements (Such as affidavits, Power of Attorney, Affidavits, Rent Agreements, Mortgage, Lease, and other relevant agreements.)

Now coming to our question whether Stamp Papers have an expiry date, the same was answered by the Supreme Court in the case of Thiruvengada Pillai Vs Navaneethammal and Another[2] where the Court held that the Indian Stamp Act prima facie does not stipulate any expiry date for the usage of Stamp Paper and since Section 54 only provides a recourse for refund in case a person does not wish to use the stamp paper within six months of such purchase, there is no obligation on the Purchaser of the Stamp Paper to use the same within six months.

The Relevant Paragraphs are extracted from the Judgment for reference:
The Indian Stamp Act, 1899, nowhere prescribes any expiry date for use of a stamp paper. Section 54 merely provides that a person possessing a stamp paper for which he has no immediate use (which is not spoiled or rendered unfit or useless), can seek refund of the value thereof by surrendering such stamp paper to the Collector provided it was purchased within the period of six months next preceding the date on which it was so surrendered.

The stipulation of the period of six months prescribed in Section 54 is only for the purpose of seeking refund of the value of the unused stamp paper, and not for use of the stamp paper. Section 54 does not require the person who has purchased a stamp paper, to use it within six months. Therefore, there is no impediment for a stamp paper purchased more than six months prior to the proposed date of execution, being used for a document.

However the Stamp Acts of States such as Maharashtra and Gujarat clearly spells out that - Stamps which have been purchased, but have not been used, or for which no allowance has been claimed within a period of 6 months, are invalid i.e such stamps shall be treated as expired and will have no validity after the efflux of time of 6 months (supra).

The Relevant Sections - Section 52B (b) of The Maharashtra Stamp Act and Section 52C of Bombay Stamp (Gujarat Amendment) Act, 2016 have been extracted for reference:

• The Maharashtra Stamp Act (Section 52 B)
  [52B. Notwithstanding anything contained in sections 47, 50, 51 and 52:
  
  1. Any stamps which have been purchased but have not been used or in respect of which no allowance has been claimed on or before the day immediately preceding the date of commencement of the Bombay Stamp (Amendment) Act, 1989 (hereinafter referred to as  the commencement date ) and the period of six months from the date of purchase of such stamps has not elapsed before the commencement date, may be used before a period of six months from the date of purchase of such stamps is completed, or delivered for claiming the allowance under the relevant provision of this Act; and any stamps not so used or so delivered within the period aforesaid shall be rendered invalid.
      
  2. Any stamps which have been purchased on or after the commencement date but have not been used, or no allowance has been claimed in respect thereof, within a period of six months from the date of purchase thereof, shall be rendered invalid.]
      
• Bombay Stamp Act (Section 52 C)
  52C. Invalidation of stamps and saving. - Notwithstanding anything contained in Sections 47, 50, 51, and 52:
  
  1. any impressed stamps which have been purchased on or after the date of commencement of the Bombay Stamp (Gujarat Amendment) Act, 2001 (Gujarat 19 of 2001) (hereinafter referred to as "the said date") shall be used or presented for claiming allowance within a period of six months from the date of purchase. Any such stamps which have not been used or no allowance has been claimed in respect thereof within the period of six months from the date of purchase shall be rendered invalid;
      
  2. any impressed stamps which have been purchased but have not been used or no allowance has been claimed in respect thereof before the said date, may be used or presented for claiming the allowance under the relevant provisions of the Act within a period of six months from the said date. The stamps which have not been used or presented within the aforesaid period of six months shall be rendered invalid."]

End-Notes:

1. Constitution of India.
2. Thiruvengada Pillai Vs Navaneethammal and Another 2008 4 SCC 530.

Written By Priyam Sharma