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Report No. 67

Chapter 36

Articles 23-25

36.1. Article 23-Introduction.-

Article 23 levies duty on a conveyance. There are many other instruments analogous to conveyance, but we need not enumerate them here. As to instrument of release, we have already discussed the position.1

1. See discussion relating to section 2(10)-"Conveyance".

36.2. No change recommended as to basis of charge.-

In the discussion relating to section 27,1 we have referred to certain State amendments which alter the basis of the charge under Article 23 from the amount of the consideration (which is the present basis), to the value of the property. Such an amendment basically affects the rate of duty. We do not propose to consider the merits or demerits of such an amendment having regard to the fact that the question is one of policy, and no difficulties resulting from complexity of law arise.

1. See discussion regarding section 27.

36.3. Exemption relating to copyright.-

There is, in this Article, an exemption from duty in respect of assignments of copyright by entry made under section 5 of the Copyright Act, 1847. It should be pointed out that the Copyright Act, 1847 was repealed by the Copyright Act, 1914. That Act has, in its turn, been repealed by the Copyright Act, 1957. Both the Act of 1914 and the Act of 19571 prohibit assignments of copyright by entry in the register, and the exemption under Article 23, in the form in which it appears, is obsolete. There can be an assignment of a copyright in a different form, under the Copyright Act, 1957, section 18. However, section 19 of that Act is material, and provides as follows2:-

"19. No assignment of the copyright in any work shall be valid unless it is in writing signed by the assignor, or by his duly authorised agent." This section corresponds to the Act of 1914. First Schedule, section 5(2). Thus, the assignment of a copyright must, under the present Act, be in writing, and signed by the assignor.

1. Section 18, Copyright Act, 1957.

2. Section 18, Copyright Act, 1957.

36.4. State Amendments as to copyright.-

Reverting to the article in the Stamp Act, we may note that State Amendments of Article 23, while taking note of the fact that the Copyright Act of 1847 has been repealed, ran on divergent lines. Briefly, the position is as follows:-

(a) In Gujarat and Maharashtra, a reference to the Copyright Act of 1957 has been substituted, in place of the reference to the Act of 1847. But adequate notice does not seem to have been taken of the details of the scheme in the Act of 1957.

(b) In Andhra Pradesh, Madhya Pradesh, Madras (now Tamil Nadu), Mysore and Punjab, all assignments under section 18 of the 1957 Act have been exempted.

(c) In Uttar Pradesh, the exemption appears to be limited to assignments of copyright in musical works by a resident in India or first published in India.

(d) In Bihar, the exemption has been deleted with effect from 31st March, 1958.

36.5. Need for exempting all assignments of copyright.-

Having taken note of the divergent approaches adopted by State Legislatures, and after a careful consideration of the merits, we have come to the conclusion that all assignments of copyright ought to be exempted. The assignment of literary, musical or artistic works should be treated differently from the transfer of other property. We need not elaborate the reasons. It will be enough to say that barring a few exceptions, artists and musicians must assign their copyright if they are to eke out their living. It is then only that they can put their products before the public. It is hardly proper to treat the sale of a house and an assignment of a copyright on an equal footing.

36.5A. Copyright to be treated on a special footing.-

Deletion of the exemption should, in our view, be regarded as a retrograde step. Nor is it proper to restrict the exemption to assignments of musical works. Creative activity, whatever be the medium, ought to be treated on a special footing. There is no reason why only musical works should be granted/protection, and not paintings or sculptures or literary works or choreography.

The primary reason for which the law has, in the field of stamp duties, made a distinction between material property and what is conveniently described as intellectual property, would appear to be that the latter represents man's journey into spheres bordering on the region of the spirit. To nourish that laudable endeavour ought to be an object of the law. This is not to say that if profit is made out of the pursuit of such activity, such profits should never be taxed. The point to be made is that in the context of the stamp law, the assignment should not be subjected to tax. Another aspect also ought not to be overlooked. In the case of International News Service,1 Brandeis J. observed:-

"The general rule is that the noblest of human production, knowledge, truth ascertained, conception and ideas become, after voluntary communication to others, free as the air to common use."

Freedom from taxation places the work of art at the disposal of many more persons than would be possible if there were no exemption.

1. International New Service v. Associate Press, (1918) 248 US 215 (25).

36.6. Recommendation.-

We, therefore, recommend that the present exemption should be retained, after substituting a reference to sections 18-19, Copyright Act, 1957 (which deal with assignments), in place of the reference to assignment under section 5 of the Copyright Act, 1847. We may mention that the suggested amendment has been favoured by most of the replies to our Questionnaire1

1. Question 87 (Article 23).

36.6A. Article 24-Introductory.-

Article 24 levies duty on a copy or extract certified to be a true copy or extract by or by order of "any public officer" and not chargeable with court-fee. The article applies to all copies certified to be true copies by public officers, whether the original was or was not chargeable with stamp duty. The duty is eight annas if the original was not chargeable with duty or if the duty on the original does not exceed one rupee. In other cases, the duty is one rupee. It should be noted that the article applies also to copies of documents which do not create rights1 or liabilities.

1. Section 2(24), definition of "instrument" (inclusive definition).

Indian Stamp Act, 1899 Back

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