Report No. 67
46.11. Article 58-Receipt-Exemption (a).-
So much as regards the main article. We now deal with the exemptions. Exemption (a) to the article relates to a receipt endorsed on, or contained in-(1) any instrument duly stamped, or (ii) any instrument, exempt under the proviso to section 3 (instruments executed by the Government etc.), or (iii) any cheque or bill of exchange payable on demand, acknowledging the receipt of the consideration money therein expressed, or the receipt of any principal money, interest or annuity or other periodical payment thereby secured. The principle on which this exemption is based is that-(a) the receipt is incidental to the main transaction, and the instrument is not executed with the primary object of acknowledging the receipt of money, and (b) the primary instrument is itself duly stamped or exempt from duty.
The exemption does not, however, mention instruments exempt from stamp duty by virtue of the exemptions contained below other articles in the Schedule to the Act, or instruments exempt by virtue of a notification under section 9, or by virtue of any other law. We are of the opinion that a receipt endorsed or contained in any such instrument, if it acknowledges the receipt of the consideration money there expressed, or the receipt of any principal money, interest or annuity, or other periodical payment thereby secured, should also be exempt from the duty under Article 53. Most replies1 to our Questionnaire have favoured such amendment, which we recommend.
1. Question 104.
46.12. Article 53-Exemption (a).-
Exemption1 (a) to Article 53 should, therefore, be revised as above. Loss of revenue-a .point made in one reply-cannot be a valid argument, when the main instrument is itself exempt. The principle on which this exemption is based is that-(a) the receipt is incidental to the main transaction, and the instrument is not executed with the primary object of acknowledging the receipt of money, and (b) the primary instrument is itself duly stamped of exempt from duty.
1. Point raised by S. No. 11 (Delhi Administration).
46.13. Exemption (b).-
Exemption (b) exempts a receipt for "1any payment of money without consideration". There is no such exemption in English law. In general, the exemption is meant for voluntary payments, or payments made in consideration of natural love or affection, of mere gifts. Internal payments within an office, or payments by book transfer, are also treated as falling within this exemption2-3. It appears however, that a payment of house-tax to the municipality does not fail4 within the exemption; it is not treated as a payment "without consideration". This view receives support from the fact that exemption (g) was considered necessary to provide for one specific case of receipt of tax. The exemption needs no change.
1. General Council of the Bar v. Inland Revenue Commissioners, (1907) 1 KB 462 (478).
2. 1910 ILR 37 Cal 634 (640).
3. Secretary to the Commissioner of Salt, Madras (in re:), (1911) 9 IC 342 (FB) (Mad).
4. Karachi Municipality (in re:), 1888 ILR 12 Born 103 (104).
46.14. Exemption (c).-
Exemption (c) relates to a receipt for payment of rent by a cultivator on account of rent assessed to Government revenue, or in the States of Andhra Pradesh, Bombay and Madras, as they existed before 1st November, 1956, of Inam lands. It is obvious that the exemption is not confined to receipts by the Government-these will be exempt even under the proviso to section 3-but also covers receipts given to raiyats by the holders of revenue paying land. The exemption, however, ceases to operate where a decree for such rent is passed and payment is made out of court, under such decree1. The exemption needs no change.
1. Emp. v. Doongar Singh, 1909 ILR 31 All 36 (37).
46.15. Exemptions (d), (e) and (f)-Recommendation.-
Exemptions (d), (e) and (f) relate to receipts given by armed forces in respect of certain payments. In this connection, our discussion relating to the definition of "soldier1" may be seen. In these exemptions, "soldier"2 should be substituted. We may state that such an amendment has been generally favoured by the replies to our Questionnaire.
1. See recommendation as to section 2-"soldier".
2. Q. 105.
46.16. Exemption (g).-
Exemption (g) relates to a receipt given by a headman or lumberdar for land revenue or taxes collected by him. This needs no comment.
46.17. Exemption (h).-
Exemption (h) exempts receipts given for money or securities for money deposited in the hands of any banker, to be accounted for. The exemption needs no change.
46.18.There are two provisos to the exemption, which are not material for our purpose. The principle of this exemption seems to be that the money received is to be accounted for; and, unlike other receipts the receipt is not issued for something to be retained permanently by the person receiving. In other words, it does not discharge any liability, but merely evidences a transaction of deposit. The factum of deposit itself may create a liability to return the money or securities. But the deposit receipt is merely a receipt, and nothing more.
46.19. Recommendation to revise the amount in Article 53.-
As regards the figure Rs. 20, we repeat our recommendation that it should be increased to Rs. 100, having regard to the fall in the purchasing power of the rupee.
46.20. Article 54.-
Article 54 levies duty on a reconveyance of mortgage. If the consideration for which the property was mortgaged does not exceed Rs. 1,000 the duty is the same as on a Conveyance (No. 23) for the amount of such consideration as set forth in the Re-conveyance. In any other case, it is ten rupees. It needs no change.