Contents
Chapter 1:
INTRODUCTION ......................................................................... 21
1.1.
Prelude..................................................................................... 21
1.2.
Cosmos .................................................................................... 22
1.2.1.
Taxation ................................................................................... 22
1.2.2.
Purposes of Taxation ............................................................... 23
1.2.3.
The History of Taxation ............................................................ 24
1.2.3.1.
The History of Taxation in India................................................ 25
1.2.3.2.
History of Stamp Duty .............................................................. 26
1.2.3.2.1.
Stamp Duty in India: British Period........................................... 26
1.2.3.2.2.
First Stamp Act in India ............................................................ 27
1.2.3.3.
Stamp Duty: The Indian Stamp Act, 1899 ................................ 27
1.2.4.
Different kind of Taxes and Tax Rates ..................................... 29
1.2.4.1.
Property Tax............................................................................. 31
1.2.5.
Economics of Taxation ............................................................. 31
1.2.5.1.
Important Aspects of Tax under Economics of Taxation .......... 32
1.2.5.2.
Important Concepts of Economics of Taxation ......................... 32
1.2.5.3.
Objectives of the System of Tax............................................... 32
1.2.6.
Voluntary Taxation ................................................................... 33
1.2.6.1.
Advantages of Voluntary Taxation ........................................... 33
1.2.6.2.
Disadvantages of Voluntary Taxation....................................... 34
1.2.7.
Optimal Tax .............................................................................. 34
1.2.8.
Tax Incidence System .............................................................. 35
1.2.9.
Tax Burden .............................................................................. 36
1.2.10.
Tax Evasion ............................................................................. 37
1.2.11.
Ethos of Taxation ..................................................................... 37
1.3.
Bombay .................................................................................... 39
1.3.1.
Duty.......................................................................................... 40
1.3.2.
Stamp Duty .............................................................................. 40
1.3.3.
Indian Stamp Act ...................................................................... 41
1.3.3.1.
The Bombay Stamp Act, 1958 ................................................. 42
1.4.
Object....................................................................................... 43
1.5.
Significance .............................................................................. 44
8
1.6.
Hypothesis ............................................................................... 44
1.7.
Tools of Analysis ...................................................................... 45
1.8.
Research Design...................................................................... 45
Chapter 2:
STAMP DUTY A PRODIGY OF CONSTITUTION .............................. 46
2.1.
Introduction .............................................................................. 46
2.2.
Central-State Relations ............................................................ 47
2.3.
Legislative Relations ................................................................ 48
2.4.
Financial Relations of Union and States .................................. 51
2.5.
Distribution of Revenues .......................................................... 53
2.5.1.
Distribution of Revenues between Union and States ............... 54
2.5.2.
Grant in Aid .............................................................................. 56
2.5.3.
Restrictions and Limitations of State to Levy Tax .................... 57
2.5.4.
State’s Power to Levy Tax ....................................................... 58
2.5.5.
Finance Commission................................................................ 62
2.5.5.1.
Constitution of Finance Commission ........................................ 62
2.5.5.2.
Functions of Finance Commission ........................................... 63
2.5.5.3.
Various Finance Commissions ................................................. 64
2.5.6.
Stamp Duty and Legislative Power .......................................... 65
2.5.7.
Levy of Stamp Duty in India ..................................................... 67
2.5.7.1.
Power of Parliament in Respect of Stamp Duty ....................... 69
2.5.7.2.
Powers of State Government of Stamp Duty ........................... 69
2.5.7.3.
Circumventing Central Law ...................................................... 70
2.5.7.4.
Computation of Stamp Duty ..................................................... 70
Chapter 3:
OVERVIEW OF STAMP DUTY ACTS .............................................. 73
3.1.
Indian Stamp Act ...................................................................... 73
3.2.
Object of Stamp Duty ............................................................... 73
3.2.1.
Statement of Objects and Reasons.......................................... 75
3.2.2.
Instruments Chargeable under Stamp Duty ............................. 76
3.2.3.
Duty Payable in Several Instruments ....................................... 76
3.2.4.
Powers to Reduce Stamp Duty ................................................ 76
3.2.5.
Mode of Payment of Stamp Duty ............................................. 77
3.2.5.1.
Survey: Payment of Stamp Duty .............................................. 77
3.2.6.
Valuation for Stamp Duty ......................................................... 78
9
3.2.7.
Adjudication as to Stamp Duty Payable ................................... 79
3.2.8.
Meaning of ‘Duly Stamped’ ...................................................... 79
3.2.9.
Instrument Non Admissible if Not Duly Stamped...................... 79
3.2.10.
Case When Short Payment is by Mistake ................................ 79
3.2.11.
Stamp Duty on Receipt ............................................................ 80
3.2.12.
Stamp Duty on Transfer of Shares in a Corporate Body .......... 80
3.2.13.
Stamp Duty on Transfer in Depository Scheme ....................... 80
3.2.14.
Types of Stamp in India ........................................................... 81
3.3.
Important Provisions of Stamp Duty ......................................... 82
3.4.
Instruments under Gujarat Stamp Act, 1958 ............................ 85
3.4.1.
Bombay Stamp Act, 1958: Pattern and Design ........................ 85
3.5.
Rules of Business .................................................................... 88
3.6.
Bombay Stamp Act and Other Acts.......................................... 89
3.6.1.
Registration Act, 1908 .............................................................. 89
3.6.1.1.
Documents of which Registration is Compulsory ..................... 89
3.6.1.2.
Time of Presentation for Registration ....................................... 90
3.6.1.3.
Where Document should be Registered .................................. 90
3.6.1.4.
Registration by Registering Officer........................................... 91
3.6.1.5.
Effective Date of Document ..................................................... 91
3.6.1.6.
Effect of Non Registration ........................................................ 92
3.6.2.
The Gujarat Court Fees Act, 2004 ........................................... 92
3.6.3.
Transfer of Property Act, 1882 ................................................. 93
3.6.3.1.
Sale of Immovable Property ..................................................... 96
3.6.3.2.
Mortgage .................................................................................. 96
3.6.3.3.
Possession of Mortgaged Property in Case of Default ............. 97
3.6.3.4.
Charge ..................................................................................... 97
3.6.3.5.
Lease of Immovable Property .................................................. 98
3.6.3.6.
Exchange ................................................................................. 98
3.6.3.7.
Actionable Claim ...................................................................... 98
3.6.4.
Indian Contract Act 1872.......................................................... 99
3.6.4.1.
Essential Elements of a Valid Contract .................................. 100
3.6.4.2.
Types of Contracts ................................................................. 101
3.6.4.3.
Agency ................................................................................... 103
10
3.6.5.
Power of Attorney Act, 1882 .................................................. 104
3.6.5.1.
Indian Law: Types of Power of Attorney Documents.............. 105
3.6.5.2.
Power of Attorney as an Agency ............................................ 106
3.6.5.3.
Power of Attorney and Stamp Duty Evasion .......................... 106
3.6.5.4.
Termination of a Power of Attorney ........................................ 108
3.6.5.5.
Other Acts: Relevant to Bombay Stamp Act, 1958................. 109
Chapter 4:
REVIEW OF STATE TAXATION STRUCTURE ............................... 111
4.1.
Taxes in Theory ..................................................................... 111
4.1.1.
Taxation Theory as Background ............................................ 112
4.1.2.
Tax Theory Meets Tax Practice ............................................. 114
4.2.
Tax Structure in Ancient India ................................................ 114
4.2.1.
Tax Structure in Medieval India .............................................. 115
4.2.2.
Tax Structure in British Period ............................................... 115
4.2.3.
Evolution of Indian Tax System .............................................. 116
4.2.3.1.
Fiscal Decentralization: Theoretical Considerations............... 117
4.3.
Tax and Expenditure in India: Constitutional Assignments .... 118
4.3.1.
Taxation Heads Assigned to the Union and the States .......... 119
4.3.2.
Recital of Constitutional Provisions ........................................ 120
4.4.
Revenue Receipts of the Central and State Governments..... 122
4.5.
Share of State Governments in Total Expenditures ............... 123
4.6.
Major Issues in Fiscal Assignment in India ............................ 124
4.7.
State Finances and Effectiveness of Policy Measures ........... 126
4.8.
Analytical Framework ............................................................. 127
4.9.
Sources of Revenues: States’ Own Revenues ...................... 128
4.9.1.
Current Transfers and Devolution from the Centre ................ 128
4.9.2.
Expenditure Responsibilities of States ................................... 129
4.10.
Financing Pattern of Gross Fiscal Deficit (GFD) .................... 129
4.11.
Scheme of Presentation of States’ Fiscal Analysis ................ 130
4.12.
Finances of Major States: Review and Assessment .............. 131
4.12.1.
Finance Commissions Impact on State Finances .................. 132
4.13.
A New Borrowing Regime for States ...................................... 132
4.13.1.
Challenges Ahead .................................................................. 133
Chapter 5:
REFORMS IN TAXATION IN INDIA AND GUJARAT ....................... 135
11
5.1
Tax Reform ............................................................................ 135
5.1.1.
Philosophy of Tax Reform ...................................................... 136
5.1.2.
Tax Reform Analysis: A Necessity ......................................... 137
5.2.
Tax Reforms Attempts Until 1990 .......................................... 138
5.2.1.
Report of Tax Reform Committee .......................................... 139
5.2.1.1.
Implementation of Reforms .................................................... 141
5.3.
Revenue Implications of Reforms .......................................... 144
5.4.
Shortcomings and Challenges ............................................... 146
5.5.
Role of State and Economic Reforms .................................... 148
5.5.1.
Tax and Cost Related Incentives ........................................... 150
5.6.
Evolving Coordinated Consumption Tax System ................... 152
5.7.
Reform in Tax Administration ................................................. 153
5.7.1.
Scope of Improvement in Tax Administration ......................... 156
5.7.2.
Tax Indicators......................................................................... 158
5.8.
Tax Reforms in Gujarat .......................................................... 159
5.8.1.
Process of Economic Reforms in Gujarat .............................. 161
5.8.2.
Gujarat Economy Scenario .................................................... 162
5.8.2.1.
Analyzing the Fiscal Indicators ............................................... 164
5.8.3.
Gujarat committed to Tax Reforms ........................................ 165
Chapter 6:
TRENDS IN STATE TAXES ......................................................... 169
6.1.
Taxes and Economic Growth ................................................. 169
6.1.1.
Policy Implications ................................................................. 169
6.2.
Role of States in Growth ........................................................ 170
6.3.
State Finance Framework ...................................................... 171
6.3.1.
Sources of Revenue: States’ own Tax Revenues .................. 171
6.3.2.
Sources of Revenue: States’ Own Non-tax Revenues ........... 172
6.3.2.1.
Current Transfers and Devolution from the Centre ................ 172
6.3.3.
Expenditure Responsibilities of States ................................... 172
6.4.
Fiscal Indicators ..................................................................... 172
6.4.1.
State’s Own Revenue to Revenue Receipts Ratio ................. 173
6.5.
Trends in State Taxes ............................................................ 174
6.5.1.
States’ Own Revenue and Own Non-Tax Revenue ............... 174
6.6.
State Taxation as Tool for Raising Revenue .......................... 175
12
6.7.
Policy Measures towards States’ taxes .................................. 176
6.7.1.
Observations on Policy Measures .......................................... 177
6.8.
State Taxes as Per Cent of GDP ........................................... 177
6.9.
Direct and Indirect Taxes ....................................................... 179
6.9.1.
States’ Own Taxes: Direct and Indirect Taxes ....................... 179
6.10.
Composition of Direct Taxes .................................................. 180
6.10.1.
Land Revenue ........................................................................ 180
6.10.1.1.
Agricultural Income-Tax ......................................................... 181
6.10.2.
Composition of Indirect Taxes ................................................ 181
6.10.2.1.
Sales Tax ............................................................................... 181
6.10.2.2.
State Excises ......................................................................... 182
6.10.2.3.
Taxes on Motor Vehicles........................................................ 182
6.10.2.4.
Entertainment Tax .................................................................. 183
6.10.2.5.
Stamp Duty and Registration Fees ........................................ 183
6.10.2.6.
Electricity Duty ....................................................................... 183
6.10.2.7.
Octroi ..................................................................................... 184
6.10.2.8.
Professions Tax ..................................................................... 184
6.10.3.
Local Finance ......................................................................... 184
6.11.
Gujarat State at a Glance ....................................................... 185
6.11.1.
Demographic Factsheet ......................................................... 185
6.11.2.
A Brief Comparison with India ................................................ 186
6.11.3.
Gujarat Economy ................................................................... 186
6.11.4.
Gujarat State Taxation Income .............................................. 188
6.11.5.
Gujarat Revenue Receipts ..................................................... 189
6.11.6.
Gujarat is Different from Other States .................................... 191
6.11.7.
Gujarat Budget 2013-14: Revenue Account Profile................ 192
Chapter 7:
FISCAL IMPORTANCE AND GROWTH OF STAMP DUTY .............. 195
7.1.
Stamp Duty Nexus with other Taxes ...................................... 195
7.2.
The Distributional Effects of Stamp Duties ............................. 196
7.3.
The Effects of Stamp Duties on Resource Allocation ............. 199
7.4.
Stamp Duty Collections and Trends ....................................... 204
7.4.1.
Stamp Duty Revenue Data across the States ........................ 205
7.4.1.1.
Revenue from Non Judicial Stamps ....................................... 206
13
7.4.1.2.
Revenue and Revenue Components per Capita .................... 207
7.4.1.3.
States’ Own Revenue Shares of Revenue Components........ 208
7.4.1.4.
Statewise Revenue Collection of Stamp Duty and CAGR...... 209
7.4.1.5.
Statewise Stamp Duty: Maximum and Minimum Growth ....... 210
7.4.1.6.
Statewise Stamp Duty: Growth v/s GDP ................................ 211
7.5.
Estimated Buoyancies of own Revenue and Components..... 212
Chapter 8:
GUJARAT STAMP DUTY: IMPORTANCE AND GROWTH ............... 214
8.1.
Economic Environment in Gujarat .......................................... 214
8.1.1.
Importance in the National Economy ..................................... 215
8.1.1.1.
Primary Sector Output............................................................ 215
8.1.1.2.
Domestic Product and Per Capita .......................................... 216
8.1.2.
Gujarat Economy ................................................................... 217
8.1.3.
State Domestic Product ......................................................... 218
8.1.3.1.
Gross State Domestic Product (GSDP) ............................... 218
8.1.3.2.
Net State Domestic Product .................................................... 219
8.1.3.3.
Per Capita Income .................................................................. 220
8.2.
Finance .................................................................................. 221
8.3.
Structure of Revenue ............................................................. 223
8.4.
Changes in per capita Taxes and Tax Ratio .......................... 224
8.5.
Composition of Revenue ........................................................ 227
8.6.
Analysis of Growth of the Tax Revenues ............................... 229
8.6.1.
Compound Growth Rates and Marginal Tax Rates ................ 230
8.6.2.
Buoyancy ............................................................................... 230
8.6.2.1.
Estimated Buoyancies............................................................ 232
8.7.
Relative Importance of Stamp Duty........................................ 233
8.7.1.
Share of Judicial, Non-Judicial and Registration Fees ........... 235
8.7.1.1.
Decadal Growth of Stamp Duty in Total Taxes ...................... 237
8.7.2.
Wholesale Price Index and Stamp Duty ................................. 239
8.7.3.
Receipts of Stamp Duties per Documents Executed.............. 240
8.7.4.
A Comparison: Sales Tax/VAT and Stamp Duty .................... 241
Chapter 9:
VALUATION: PROCESS AND LEGAL ASPECTS ............................ 243
9.1.
Instruments under Gujarat Stamp Act, 1958 .......................... 243
9.2.
Valuation under Bombay Stamp Act, 1958 ............................ 244
14
9.2.1.
Section 32A of Bombay Stamp Act, 1958 .............................. 245
9.2.2.
Obiter Dictum: Section 32A .................................................... 247
9.2.3.
Evolution of Valuation Provision ............................................. 249
9.2.4.
Survey and Under Valuation .................................................. 252
9.2.5.
Implementation of Valuation Provisions ................................. 254
9.2.5.1.
Observations of Gujarat High Court ....................................... 257
9.2.5.2.
The Second Full Bench Further Observed: ............................ 260
9.2.6.
Ready Reckner and Valuation................................................ 262
9.2.7.
Procedure of Valuation........................................................... 264
9.3.
Valuation and Income Tax Act, 1961 ..................................... 266
9.3.1.
Stamp Act and Assessment under Income Tax Act. .............. 267
9.4.
Statement of the Case by the Collector: Section 32B ............ 268
9.4.1.
Important Observations .......................................................... 269
9.5.
General Legal Principles for Determination of Market Value.. 270
9.5.1.
Factors for Determining Market Value of Property ................. 273
9.6.
Market Value of Property: Legal Views .................................. 277
9.6.1.
Auction Sale and other Observations ..................................... 278
9.7.
Guidelines for the Purpose of Valuation ................................. 279
9.7.1.
Guidelines for Determination of Market Value ........................ 280
9.7.2.
Valuation Guidelines .............................................................. 281
9.7.3.
Ready Reckner ...................................................................... 283
9.7.4.
Procedure for Assessment of Market Value ........................... 283
9.7.4.1.
Instrument of Conveyance ..................................................... 286
9.7.5.
Under Valuation and Stamp Act ............................................. 286
9.7.6.
Valuation of Property.............................................................. 291
9.7.7.
Encumber of Affixation of Photograph.................................... 292
9.7.8.
Valuation of Land ................................................................... 292
9.7.9.
Fair Procedure ....................................................................... 292
9.7.10.
Opportunity of Hearing When Denied .................................... 294
9.7.11.
Jurisdiction ............................................................................. 294
9.7.12.
Application of Mind ................................................................. 295
9.8.
Imposition of Penalty .............................................................. 296
9.9.
Evasion of Stamp Duty........................................................... 300
15
9.9.1.
Avoidance of Stamp Duty and Registration Fee..................... 301
9.9.2.
Nomenclature of Document ................................................... 302
9.9.3.
Sale Deed .............................................................................. 302
Chapter 10: PROGENIES WITH STAMP ACT ................................................. 304
10.1.
Pertinence of Stamp Duty ...................................................... 304
10.2.
Transfer of Property and Registration Act .............................. 304
10.3.
Instruments chargeable with Stamp Duty ........................... 306
10.3.1.
Observations of Charging Section.......................................... 307
10.3.2.
Important Definitions and Charging Section ........................... 308
10.3.2.1.
Chargeable: Section 2(d) ....................................................... 308
10.3.2.1.1.
Observation on Chargeable ................................................... 309
10.3.2.2.
Conveyance: Section 2(g) ...................................................... 309
10.3.2.2.1.
Observation on Conveyance .................................................. 310
10.3.2.3.
Duly Stamped: Section 2(h) ................................................... 313
10.3.2.3.1.
Observation on Duly Stamped ............................................... 313
10.3.2.4.
Executed and Execution: Section 2(i) .................................... 314
10.3.2.4.1.
Observation on “Executed” and “Execution” .......................... 314
10.3.2.5.
Instrument: Section 2(l) .......................................................... 315
10.3.2.5.1.
Observation on Instrument ..................................................... 315
10.3.3.
Additional Duty: Section 3A .................................................... 317
10.3.3.1.
Observation on Additional Duty .............................................. 318
10.4.
Machinery Provision of Stamp Duty ....................................... 318
10.4.1.
Stamp Duty When Payable .................................................... 319
10.4.2.
Stamp Duty by Whom Payable: Section 30 ........................... 319
10.4.3.
Penalty for Executing Instruments not Duly Stamped ............ 319
10.4.4.
Impounding of Instruments: Section 33 .................................. 320
10.4.4.1.
Effect of Impounding .............................................................. 324
10.4.5.
Exemption .............................................................................. 325
10.4.5.1.
Exemption: Indian Stamp Act, 1899. ...................................... 326
10.4.5.2.
Exemption: Bombay Stamp Act, 1958.................................... 327
10.4.5.3.
Survey and Exemption ........................................................... 328
10.4.6.
Adjudication ........................................................................... 330
10.4.6.1.
Adjudication as to Proper Stamps .......................................... 330
16
10.4.7.
Demand of Stamp Duty .......................................................... 331
10.4.8.
Deficit Stamp Duty and Indian Stamp Act .............................. 333
10.4.8.1.
Additional Deficit .................................................................... 336
10.4.9.
Appeal, Review and Revision: Section 53A and Section 58 .. 338
10.4.9.1.
Alternate Remedy .................................................................. 343
10.4.9.2.
Limitation ................................................................................ 343
10.5.
Penalty for Executing Instrument not Duly Stamped .............. 347
10.6.
Instrument not Duly Stamped Inadmissible in Evidence ........ 349
Chapter 11: CONJURING WITH STAMP DUTY ............................................... 354
11.1.
Individual Compliance and Stamp Duty ................................. 354
11.2.
Administrative Problems with Stamp Duty ............................. 356
11.2.1.
Complex Valuation Procedure ............................................... 356
11.2.2.
Avoidance: A Way to Avoid Tax Burden ................................ 356
11.2.3.
Evasion of Stamp Duty........................................................... 357
11.2.4.
Survey: Evasion of Stamp Duty.............................................. 358
11.2.5.
Collection Costs ..................................................................... 360
11.2.6.
Corruption: Common Practice ................................................ 360
11.2.6.1.
Survey: Issue of Corruption .................................................... 360
11.2.7.
Fraudulent Stamp Paper Scandals ........................................ 362
11.3.
Black Money Effect ................................................................ 363
11.3.1.
Vicious Circle of Black Money ................................................ 364
11.3.2.
Revenue Suffers from Multiple Sources ................................. 364
11.3.3.
Rate of Taxation ..................................................................... 365
11.3.3.1.
Rate of Stamp Duty in India ................................................... 366
11.3.4.
The Case for Stamp Duty Rate Reform.................................. 368
11.3.5.
Overall Impact of Rate Reduction .......................................... 368
11.4.
Stamp Duty Rates in Gujarat ................................................. 369
11.4.1.
Survey and Rate of Stamp Duty ............................................. 370
11.4.2.
Mortgage Transactions .......................................................... 371
11.4.3.
Agreement ............................................................................. 372
11.4.4.
Entry in Revenue Records and Search .................................. 372
11.4.5.
Orders Passed Under Section 32A ........................................ 373
11.4.5.1.
Pending Cases for Valuation in Gujarat State ........................ 374
17
11.4.5.2.
Survey and Pending Recovery ............................................... 376
11.4.6.
Letter Issued: An Instrument .................................................. 377
11.5.
Structuring Transaction .......................................................... 378
11.5.1.
Differential Stamp Duty .......................................................... 378
11.5.2.
Multiple Transactions ............................................................. 379
11.5.3.
Instrument of Distinct Matter .................................................. 379
11.5.4.
Instrument: An Electronic Record........................................... 380
11.6.
Stamp Duty on Letter of Allotment ......................................... 381
11.6.1.
The Flat Act and Letter of Allotment ....................................... 381
11.7.
Major Issues with Stamp Duty ................................................ 382
11.7.1.
Execution in Different States .................................................. 383
11.7.2.
Rate Differences .................................................................... 383
11.7.3.
Creation of Charge ................................................................. 384
11.7.4.
Rates on Bond ....................................................................... 385
11.7.5.
Types of Mortgages and Stamp Duty ..................................... 386
11.7.6.
Distinguishing Instruments and Rates .................................... 386
11.7.6.1.
Survey and Nature of Instrument ........................................... 387
11.7.7.
Special Provisions by States .................................................. 388
11.7.8.
Gift at the Rate of Conveyance .............................................. 389
11.7.9.
Lost Instruments: Secondary Evidence .................................. 389
11.8.
Specific Issues with Gujarat Stamp Duty ............................... 390
11.8.1.
Administering the Statute ....................................................... 390
11.8.2.
Improving the Procedure ........................................................ 391
11.8.3.
Ignorance in Execution........................................................... 392
11.8.4.
Continuous Valuation of Properties ........................................ 393
11.8.5.
Injustice and Tool for Avoidance ............................................ 394
11.8.6.
Deviation in Search Report Procedure ................................... 394
11.9.
Imposing Stamp Duty on E-Commerce .................................. 396
11.9.1.
Important Facts of the Case ................................................... 396
11.9.2.
Face to Face With Amendment .............................................. 397
11.9.3.
Inconsistency with Section 8A of Indian Stamp Act, 1899...... 397
11.9.4.
Inconsistency with Information Technology Act, 2000............ 398
11.9.5.
Other Related Problems......................................................... 399
18
11.9.6.
Inconsistency with Article 286 of Constitution of India............ 400
11.9.7.
Finding Solution for E-Commerce .......................................... 400
11.10.
Factors Impeding Factoring ................................................... 401
11.10.1.
Constitutional Validity ............................................................. 402
11.10.2.
Past Amendments in Various Acts ......................................... 403
11.10.3.
Clear Interpretation ................................................................ 403
11.11.
Uniform Duty Structure for Stock Exchange ........................... 404
11.12.
Stamp Duty Collections can be Raised .................................. 405
Chapter 12: PROPOSITIONS FOR AUGMENTING STAMP DUTY ...................... 407
12.1.
Nature of Stamp Duty............................................................. 407
12.1.1.
Various Aspects of Stamp Duty.............................................. 408
12.1.2.
Stamp Act: Self Executing Act ............................................... 408
12.2.
Lines of Propositions .............................................................. 409
12.3.
Scope of the Propositions ...................................................... 410
12.4.
Consideration for Propositions ............................................... 411
12.5.
Shaping up the Indian Stamp Act, 1899 ................................. 412
12.5.1.
Amended Definition of Conveyance ....................................... 412
12.5.2.
Lease Transactions Brought under Duty ................................ 413
12.5.3.
Basis of Stamp Duty............................................................... 414
12.5.4.
Property Sales under Power of Attorney to Attract Duty ........ 414
12.5.5.
Imprisonment for Documents without Proper Stamps ............ 414
12.5.6.
Tax on “Record” of Securities Transactions ........................... 415
12.5.7.
Increase in Duty on Articles of Association ............................ 416
12.5.8.
Other Important Amendments Proposed................................ 417
12.6.
Survey and Propositions ........................................................ 418
12.7.
Propositions ........................................................................... 418
12.7.1.
Administrative Propositions .................................................... 418
12.7.2.
Legal Propositions.................................................................. 423
12.8.
Propositions and Draft Amendments...................................... 428
12.8.1.
Propositions on Definition of Conveyance.............................. 428
12.8.1.1.
Draft Bill Item.......................................................................... 429
12.8.2.
Propositions on Charging Section .......................................... 429
12.8.2.1.
Draft Bill Item.......................................................................... 429
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12.8.3.
Instrument Chargeable with Additional Duty .......................... 430
12.8.3.1.
Draft Bill Item.......................................................................... 430
12.8.4.
Propositions on Exemption Section........................................ 430
12.8.4.1.
Draft Bill Item.......................................................................... 431
12.8.5.
Propositions for Provision of Amnesty Scheme ..................... 431
12.8.5.1.
Draft Bill Item.......................................................................... 432
12.8.6.
Propositions on Duties by Whom Payable ............................. 432
12.8.6.1.
Draft Bill Item.......................................................................... 433
12.8.7.
Propositions on Section 32A .................................................. 433
12.8.7.1.
Draft Bill Item.......................................................................... 433
12.8.8.
Propositions Regards to Adjudication .................................... 434
12.8.8.1.
Draft Bill Item.......................................................................... 434
12.8.9.
Propositions on Impounding of Instruments ........................... 435
12.8.9.1.
Draft Bill Item.......................................................................... 435
12.8.10.
Propositions for Change in Provision in Section 34................ 436
12.8.10.1.
Draft Bill Item.......................................................................... 436
12.8.11.
Propositions on Inspection ..................................................... 437
12.8.11.1.
Draft Bill Item.......................................................................... 437
12.8.12.
Propositions for Inspection of Private Places ......................... 437
12.8.12.1.
Draft Bill Item.......................................................................... 438
12.8.13.
Propositions for Recovery Power ........................................... 438
12.8.13.1.
Draft Bill Item.......................................................................... 439
12.8.14.
Draft Bill ................................................................................. 441
12.8.15.
Propositions on Articles of Schedule I .................................... 450
12.9.
A Clincher on Stamp Duty ...................................................... 450
Annexure–I: SURVEY REPORT .................................................................. 451
Annexure–II: LIST OF CASES ...................................................................... 465
Annexure–III: ABBREVIATIONS .................................................................. 482
Annexure–IV: LIST OF TABLES.................................................................... 485
Annexure–V: LIST OF FIGURES .................................................................. 488
Annexure–VI: BIBLIOGRAPHY .................................................................... 489
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