Report No. 67

14.8. Obligation confined to movable property.-

It should be noted that under section 30, it is only when a movable property exceeding Rs. 20 in value has been received in satisfaction of a debt (and a demand for receipt has been made), that the question of granting a duly stamped receipt arises. The section has no application where an immovable property exceeding Rs. 20 in value is made over by a debtor to a creditor, in satisfaction of a pre-existing liability1.

1. Emperor v. Sukhdas, AIR 1932 Nag 172.

14.9. Exemption from duty-effect of.-

Several kinds of receipts have, by the exemption in the Schedule or by notification under section 9, been exempted from the obligation to stamp. A question which would arise is whether, even in such cases, the obligation to give a receipt imposed by section 30 survives. A similar question can arise where a receipt has been given, but is unstamped because the situation is one where the exemption applies. In an Allahabad case1, the document at issue was a receipt signed by the payee in duplicate, on the Post Office form, for money remitted by money order. No stamp was put on it, as the necessity for stamp was obviated by a notification.

The person who remitted the money thereafter demanded from the payee a duly stamped receipt which should mention that the payment was received on account of a certain specified debt. The payee refused to do so, and was persecuted and convicted under section 65. The High Court set aside the conviction, and held that since a proper receipt had been given to the Post Office which was an agent of the remitter, the remitter could not demand a second receipt. Further, section 30 did not require the person receiving to specify the particular purpose for which money was paid.

1. Emp. v. Balmukund, 1907 ILR 34 All 192.

14.10. Recommendation to amend section 30.-

To avoid the recurrence of such controversies-which could arise from the present wide provision-it is desirable that the position should be clarified. The object of the law of stamps is to ensure that duty is paid where payable. The obligation requiring receipt is intended merely for such cases. We, therefore, recommend the addition of the following exception to section 30.

"Exception.-Nothing in this section shall apply to cases-

(a) where the receipt, if given, would not require stamp, or

(b) where a receipt has been given but does not require stamp".

14.10A. Recommendation to increase the amount.-

We also recommend that the amount should be increased1 to one hundred rupees, for reasons which we shall indicate under Article 53.

1. See discussion as to Article 53, infra.

14.11. Section 30A (New).-

At this stage, it becomes necessary to deal with one matter which is not adequately dealt with in the Act. The question whether a person from whose possession a document comes before a public officer-section 33-and who does not pay the duty and penalty-section 35-can be compulsorily ordered to pay it by the Collector-section 40(1)(b) and section 48-has led to a difference of views as to the scope and ambit of sections 40 and 48. We shall revert to the matter when we consider section 48, but a few important points may be referred to. Section 48 provides that all duties, penalties and other sums required to be paid under this Chapter may be recovered by the Collector by distress and sale of the movable property of the "person from whom the same are due", or by any other process for the time being in force for the recovery of the arrears of land-revenue.

As to the "person from whom the duty is due" within the meaning of section 48, the section itself is silent, and the answer has to be sought from other provisions. Unfortunately, the other provisions are also sketchy. As a result, there is considerable obscurity in this respect, and the obscurity arises primarily from the fact that, excepting in a very limited number of cases,1 the Act does not give any specific and comprehensive guidance as to the person who is to be regarded as the one liable to pay stamp duty.

1. Sections 19,20 and 30.

14.12. The very limited number of cases specifically dealt with in this regard are contained in-(i) section 19, which relates to bills and notes drawn out of India, (ii) section 29, which, in the case of certain instruments, provides as to who shall bear the burden of proper stamp, and (iii) section 30, dealing with receipts. Section 29 is a somewhat general provision-though not exhaustive. And even that section does not very clearly indicate whether it is to operate as between the parties, or whether it is to operate also between the State on the one hand, and the private party on the other hand, so as to be available for interpreting section 48. In view of the obscurity and uncertainty as to the inter-relationship of section 29 and similar sections on the one hand, and section 48 on the other hand, we are of the view that the matter should be put beyond doubt, as it is neither in the interests of the State nor in the interests of the citizen that liability to bear the tax should be left in doubt.

14.13. Recommendation.-

Our recommendation, in concrete terms,1 is that the provisions of section 48 should be enforceable-

(a) against persons who are liable by virtue of section 19, agreement or section 29 or section 30, as the case may be; and

(b) where none of the above-mentioned sections applies, then against the person executing the document in question.

It may be mentioned that most replies to our Question2 have agreed with the need for an amendment on the above lines.

1. See discussion relating to section 48, infra.

2. Q. 56 (concerning sections 40 and 48).

14.14. Section 30A (New).-

In the light of the above discussion, we recommend the insertion of a new section on the following lines:-

"30A. For the purposes of this Act, the person from whom duty on an instrument is due is-

(a) the person liable under sections 19, 29 or 30, or under an agreement, or

(b) where clause (a) does not apply, the executant of the instrument".