Report No. 231

Amendments in Indian Stamp Act 1899 and Court-Fees Act 1870 Permitting Different Modes of Payment

I. Introduction

Indian Stamp Act 1899

1.1 The idea of raising revenue for the State from the transactions of its citizens originated in Holland. The first stamp law was passed in Holland in 1624. In England, it was first adopted under Charles II, but under the reign of William and Mary, it assumed a definite shape and thereafter various statutes were passed requiring stamps on various instruments among the English people.1

1.2 In India, the first stamp law was Regulation VI of 1797, which was limited in its extent to Bengal, Bihar, Orissa and Benaras. Various stamp Regulations were subsequently introduced in the sister provinces of Bombay and Madras.1

1.3 In 1860, the first Act relating to stamp duties was enacted in India.

It repealed all the existing Regulations. The Stamp Act 1860 was replaced by the Stamp Act of 1862. Thereafter were enacted the Stamp Act 1869 and the Stamp Act 1879 replacing the Act of 1869. The Stamp Act 1879 was ultimately replaced by the Stamp Act 1899, the present law on the subject.1

1. 67th Report of the Law Commission of India.

1.4 In Jagdish Narain v. Chief Controlling Revenue Authority, AIR 1994 All 371, the Allahabad High Court observed:

"The sole object of the Indian Stamp Act is to increase the revenue and its provisions must be construed as having in view only the protection of revenue. Although the provisions contained in the Act imposed pecuniary burdens and this Act is a fiscal enactment yet considering the implications involved therein its provisions must be given a construction which prevents undue hardship to the subject."

1.5 Section 10 of the Indian Stamp Act envisages stamps as the mode of payment of duty. An instrument is "duly stamped" only if it bears an adhesive or impressed stamp of the proper amount, vide section 2(11) of the said Act.