# AND ORS. Januar.J, 17 v. ' THE STATE OF WEST BENGAL AND ORS

- **Citation:** [1964] 1 S.C.R. 535
- **Court:** Supreme Court of India
- **Decided:** 1964
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/and-ors-januar-j-17-v-the-state-of-west-bengal-and-ors-2919
- **Pages:** 18

## Headnote

f
'
I '
,I
1 S.C.R.
SUPREME COURT REPORTS
535
NEW CENTRAL JUTE MILLS CO. LTD.
•
1963
AND ORS.
Januar.J, 17.
v.
'
THE STATE OF WEST BENGAL AND ORS.
(B. P. SINHA, c. ].! P. B. GAJjiJNDRAGADKAR.
K. N. WANCHOO, K. C. D.As GUPTA and
J. c. SHAH, Jj.).
, I
Start:p J)uty-"Duly stamped"-Meaning qf-Mortga11e
deed executed in Uttar
Prade.h in respect of property in West
Bengal-Duty
pa11~ble on such instr-ument-Stamp Act, 18.99
(2 of 1899), ss.
2 \ii), !!_ (as amended in Uttar Pradesh and
West Bengal), s.19A, "· 3.
·
•
The first petitioner, a Company with its register~ office
at Calcutta, is the owner of a fac;tory al Varanasi in the State
of Uttar Pradesh. The State of Uttar Pradesh h'\ving agreed -- -
to advance a loan on the mortgage of the Company"s assets at
its jute mills at Budge Budge and at Ghusuri, all situatr.d in
\Vest Bengal, the dee<l of mortgage was executed at Lucknow
in the State of Uttar Pradesh on March 22, 1957. To that
deed, the petitioner affixed stamps of the value of Rs. 1,08,751/-·
purchased from the Collector of •lamps, Calcutt!'. It was duly
registered at Calcutta on April 5, 1957. On a reference made
to the Board of Revenue, UtJar Pradesh, the.Board held that as
the- mortgage deed dated March 22, 1957, was executed at
a place within Uttar Pradesh it must bear, stamps issued by the
Uttar Pradesh Government.- The Board also held that the
Company ~as liable to pay Rs. 1,7(000/~ as stamp, duty on the
document dated March 22,
1957. The petitioner fileda
petition under Art. 32 of the Constitution challenging the order
of the Board of Re.venue.
The petitioner contended that the
document should have been held to be dulY. stamped .as it bore
stamps in accordance with the law of WesrBengal.
Held, that the mortgage deed dated March 22, 1957, was
executed in Uttar Pradesh, though it relat~d to property situated
. in West Bengal and was received in the State for registration.
The first dutiable event was the execution which took place in
Uttar Pradesh. The second dutiallle cvent.wa> the receipt in West
Bengal. When it came before the officers of Pttar Pradesh for a
decision whether it was duly stamped or not, the officers of
•• "I'
•
196J
Ntra U•tral }tJtt
MUJs C.. Lti.
••
Th S14u of
West Bmgal
536 SUPREME COURT REPORTS [1964] VOL·
Cttar Pradesh were bound to hold that the instrument was not
duly stamped as it did not bear Uttar Prades11 starnps.
In the
circu1nstances of the case, the fact that the instrunlent had stamps
in accordance with the law of West llengal coulJ not justify a
conclusion that it had been duly stamped. The instrument can
be said to be duly stamped only if it be us stamps of the amount
and description in accordance '"'ith the la\V of the S!a.te concern·
ed. The law includes not only the Act bill also t'ic rules framed
under the Act.
rr an instrument af·er becoming liable to <luty in one
State on execution there becomes liable to dutv also in anothrr
State on receipt there, it must fint be stam~d in accordance
with the law of the first State and it will not be required to be
further stamped in accordance with the law of tbe second State
when the rate of the second state is the samr or lower.
Where
the rate of the second S:atc i; higher,
it wal require ta be
stamped only with 1he excess a1nount in accorda11cc with the
law and rules in force in ihe second Sta tr.
C1v1L
0RJGIXAL
Ju1us1Hc:T10N
: Petiti,1n
No. 13 of 1962.
Petition under Art. 32 of the Constitution of
India for the enforcement or Fundamen1al Rights.
0. K. Daphtary, Solicitor General of India, and
B. P. Maheshwari, for the petitioners ..
B. Sen, 8. C. Mazumdar for P. K. Bose, for
respondent No. 1.
C. B. Ag'lrwal. K. S. llajefo and G. P. Lal, for
respondents l\os. 2 to t
·
'l'. V. R. Tr1taclU1ri and /'. D. Menon, for intervener No. I.
B. Sen, and S. I'. l'arm11 for I. N. Shroff,
for intervener No. 2.
R. Sen, JI. S. K. Sastri and R. l/. Dhebar,
for intervener No. ii.
1 S.C.R.
SUPREME COURT REPORTS
537
1963. January 17. The Judgment of the court
w

## Text

f
'
I '
,I
1 S.C.R.
SUPREME COURT REPORTS
535
NEW CENTRAL JUTE MILLS CO. LTD.
•
1963
AND ORS.
Januar.J, 17.
v.
'
THE STATE OF WEST BENGAL AND ORS.
(B. P. SINHA, c. ].! P. B. GAJjiJNDRAGADKAR.
K. N. WANCHOO, K. C. D.As GUPTA and
J. c. SHAH, Jj.).
, I
Start:p J)uty-"Duly stamped"-Meaning qf-Mortga11e
deed executed in Uttar
Prade.h in respect of property in West
Bengal-Duty
pa11~ble on such instr-ument-Stamp Act, 18.99
(2 of 1899), ss.
2 \ii), !!_ (as amended in Uttar Pradesh and
West Bengal), s.19A, "· 3.
·
•
The first petitioner, a Company with its register~ office
at Calcutta, is the owner of a fac;tory al Varanasi in the State
of Uttar Pradesh. The State of Uttar Pradesh h'\ving agreed -- -
to advance a loan on the mortgage of the Company"s assets at
its jute mills at Budge Budge and at Ghusuri, all situatr.d in
\Vest Bengal, the dee<l of mortgage was executed at Lucknow
in the State of Uttar Pradesh on March 22, 1957. To that
deed, the petitioner affixed stamps of the value of Rs. 1,08,751/-·
purchased from the Collector of •lamps, Calcutt!'. It was duly
registered at Calcutta on April 5, 1957. On a reference made
to the Board of Revenue, UtJar Pradesh, the.Board held that as
the- mortgage deed dated March 22, 1957, was executed at
a place within Uttar Pradesh it must bear, stamps issued by the
Uttar Pradesh Government.- The Board also held that the
Company ~as liable to pay Rs. 1,7(000/~ as stamp, duty on the
document dated March 22,
1957. The petitioner fileda
petition under Art. 32 of the Constitution challenging the order
of the Board of Re.venue.
The petitioner contended that the
document should have been held to be dulY. stamped .as it bore
stamps in accordance with the law of WesrBengal.
Held, that the mortgage deed dated March 22, 1957, was
executed in Uttar Pradesh, though it relat~d to property situated
. in West Bengal and was received in the State for registration.
The first dutiable event was the execution which took place in
Uttar Pradesh. The second dutiallle cvent.wa> the receipt in West
Bengal. When it came before the officers of Pttar Pradesh for a
decision whether it was duly stamped or not, the officers of
•• "I'
•
196J
Ntra U•tral }tJtt
MUJs C.. Lti.
••
Th S14u of
West Bmgal
536 SUPREME COURT REPORTS [1964] VOL·
Cttar Pradesh were bound to hold that the instrument was not
duly stamped as it did not bear Uttar Prades11 starnps.
In the
circu1nstances of the case, the fact that the instrunlent had stamps
in accordance with the law of West llengal coulJ not justify a
conclusion that it had been duly stamped. The instrument can
be said to be duly stamped only if it be us stamps of the amount
and description in accordance '"'ith the la\V of the S!a.te concern·
ed. The law includes not only the Act bill also t'ic rules framed
under the Act.
rr an instrument af·er becoming liable to <luty in one
State on execution there becomes liable to dutv also in anothrr
State on receipt there, it must fint be stam~d in accordance
with the law of the first State and it will not be required to be
further stamped in accordance with the law of tbe second State
when the rate of the second state is the samr or lower.
Where
the rate of the second S:atc i; higher,
it wal require ta be
stamped only with 1he excess a1nount in accorda11cc with the
law and rules in force in ihe second Sta tr.
C1v1L
0RJGIXAL
Ju1us1Hc:T10N
: Petiti,1n
No. 13 of 1962.
Petition under Art. 32 of the Constitution of
India for the enforcement or Fundamen1al Rights.
0. K. Daphtary, Solicitor General of India, and
B. P. Maheshwari, for the petitioners ..
B. Sen, 8. C. Mazumdar for P. K. Bose, for
respondent No. 1.
C. B. Ag'lrwal. K. S. llajefo and G. P. Lal, for
respondents l\os. 2 to t
·
'l'. V. R. Tr1taclU1ri and /'. D. Menon, for intervener No. I.
B. Sen, and S. I'. l'arm11 for I. N. Shroff,
for intervener No. 2.
R. Sen, JI. S. K. Sastri and R. l/. Dhebar,
for intervener No. ii.
1 S.C.R.
SUPREME COURT REPORTS
537
1963. January 17. The Judgment of the court
was delivered by
DAS
GUPTA,
].-Where
an
inst:ument
extcuted
in
Uttar
Pradesh
and consequently
liable
to
stamp
duty
under
the
Indian
Stamp Act as amended in Uttar Pradesh
but
relating to property in West Bengal bears stamps
overprinted with the name of West Bengal comes
before a public officer of Uttar Pradesh, is such
officer right in holding that the instrument is not duly
stamped inasmuch as it does not bear stamps over·
printed with the name of Uttar Pradesh? That is the
principal question which has arisen in this petition
under Art. 32 of the Constitution.
_
The first petitioner, a Company incorporated
under the Indian Company's Act with its registered
office at Calcutta, is the owner of a factory at
Varanasi in the State ofUttar Pradesh. The petitioners numbers 2 and 3 are the shareholders of the
first petitioner Company. The State of Utt~r Pradesh
having agreed to advance a loan of Rs. 1,45,00,000/-
on the mortgage of the Company's assets at its jute mills
at Budge Budge and at Ghusuri, all situated in West
Bengal, the deed of mortgage was executed at Lucknow
in the State of Uttar Pradesh on March 22, 1957.
To this deed the first petitioner affixed stamps of the
value of Rs. 1,08, 751/- purchased from the Collector
of Stamps, Calcutta. It was duly
registered at
Calcutta on April 5, 1957. Thereafter, on March 23,
1957, by a deed executed between the first petitioner
and the State of Uttar Pradesh a part or the mortgage
property in West Bengal was released and in its place
and stead a part of some properties of U ttar Pradesh
were substituted.
The deed of substitution was duly
stamped and registered in Uttar Pradesh. No objec•
tion was then taken to the stamp affixed on the original deed of mortgage. In 1960 the first petitioner
made a reqticst to the state ofUttar Prad~sh to release
11163
New C1n1ral Jule
Mills C.. Ltd.
v.
. TM State of
W111 B1•1al
•Das Gu;ta, J.
1963
Ntw Centro/ Jutt
Mill.< Co. ltd.
v.
Tlit l'talt of
Wtsl BtrzgJI
Dtu Gupta, J,
538
SUPREME COURT REPORTS[I964]VOL.
. a further part of the mortgage properties included in
the original mortgage deed and to accept in their place
and stead the assets and properties of the Company's
factory at Varanasi as substituted security.
A draft
deed
for
the substitution was sent by the
first
petitioner to the Collector of Varanasi for ascertaining the stamp duty payable on it and for getting
the benefits of reduced rates of duty applicable in
case of substitution of security. The Collector
referred the matter to the Board of Revenue for
adjudication of the Stamp duty on the document for
substitution. Ultimately, the Board of Revenue,
Uttar Pradesh, decided that as the original document
had been executed at a place within Uttar Pradesh it
must bear stamps issued by the Uttar Pradesh Government. It rejected the argument that the document
of March 23, I !l57 was not an instrument and therefore could bear the stamps issued by the West Bengal
Govemment. The Board of Revenue held that the
Company was liable to pay, Rs. l, 74,000,'. as stamp
duty on the document dated March 2:l, 195i, before
it can avail of the concessional rate provided for in
substituted srcurity. Thereafter, the Collector of
Varanasi, by a letter dated September 8,
1961,
informed the first petitioner that (a) that the draft
deed submitted by it \\':1' a substituted security chargeable under Art. ·ltl (c) of Schedule 1-B of the Uttar
Pradesh Stamp Amendment Act, 1058, with a duty
of Rs. 7,551/-, provided the original mortgage deed
of March 22, l!l57, was "first got properly stamped
by payment of deficit duty of Rs. 1,74,000/-". The
letter ended with a request for deposit of the deficit of
Rs. 1,74,000/- on the mortgage deed of March 22,
1957, and also for deposit of Rs. 7,554/- for the deed
of substitution to be executed.
This letter from the
Collector was followed by a letter dated November
17,
Ifl(il, from the Tehsildar, Chandauli,
Varanasi, demanding payment of Rs. 1,74,000/-
within a week of the receipt of the letter.
On
November :JO, th~ first petitioner rcpliedto this letter
I
1 S.C.R. SUPREME COURT REPORTS
539
asking for a month's time. The present petition was
filed on December 22, 1961.
Primarily, the petitioner's case is that under the
provi~ions of the Stamp Act a document cannot be
said to be unstamped unless it comes within the mis·
chief of s. 15 of the Act and so the Board of Revenue
was wrong in holding that the mortgage deed of
March 22, 1957, could not be said to be properly
stamp.ed unless it bore stamps of the value of
Rs. 1,74,000/- issued by the Uttar Pradesh Government. The order was also challenged as illegal on
the ground that the petitioner had already paid
stamp duty in West Bengal to the extent of
Rs. 1,08, 751/- "after proper adjudication thereof
by the Collector of stamps, Calcutta, based on the
provisions of a circular dated August 2, 1954, issued
by the State of West Bengal." Rule 3 of the Stamp
Rules as framed by the Uttar Pradesh Gove,rnment
(which provided that stamps overprinted with the
words "Uttar Pradesh" or the ·letters "U.P.") was
also attacked as mwonstitutional on the ground that
it constituted an unreasonable restriction on the
petitioner's fundamental rights under Art. 19 (1) (f)
and 19 (1) (f) (g) of the Constitution.
Alternatively,
it was contended that the circular of the West Bengal
Government dated August 2, 1954 was null and void
and the State of West Bengal had "ilJegally exacted
the sum of Rs. 1,08,751/- from the petitioner without
any authority of law in that behalf" and had infringed the fundamental rights of the petitioner under
Att. 19 (1) (f) and 19 (1) (g) of the Constitution.
The petitioner asks for (i) a writ of certiorari
for the quashing of the order of the Board of Revenue
dated August 11, 1961; (ii) a writ in the nature of
mandamus directing respondents 3, 4 and 5, viz.,
Mr.
Bhargava,
Member,
Board
of Revenue,
Uttar Pradesh, the - Board of Revenue,
Uttar
Pradesh and the Collector of Varanasi to forbear
. 1963
New Central :Juli
Mills Co. Ltd.
••
Thi State of
Wist Bm1•l
Das Gupta, J.
1963
"'• Ctnlral J11tt
Milb Co. Ltd.
••
n.si.tt of
Wt.II s,.,_i
DuG.plo, J.
540 SUPRE.'.\fE COURT REPORTS [l!l64] VOL.
from acting on the basis
of the
order dated
August 11, 19GI; (iii) alternatively, a writ in the
nature of mandamus directing the respondent No. 1,
the State of West 13tngal to refond to the petitioner
the sum uf Rs.
1,08,~Gl/·.
The petition was resisted by the State of West
Bengal as also by the other respondents, i. e., the
State of C. P. and its officers.
On behalf of the State of Uttar Pradesh is was
urged that the Board's order dated August 11, 1961,
was in accordance with law. It appears from paragraph 19 of the counter-affidavit filed on behalf of
the respondents 2 to (i that the document in question,
i. e., the original mortgage deed dated .'.\!arch 22,
1957, was impounded hy the Inspector of Stamps on
August 9, !9Gl.
The State of West Bengal
denied that the
circular dated August 2, l!J;)I, was illegal and also
that "the State of West Bengal had illegallv exacted
the sum of Rs. 1,(16,i.ili· without
authority of
law." In view of the importance of the questions
raised, notices were issued to all the
AdvocatesGeneral of the States and . .\dvocatrs General of
several States appeared
before
us through their
Counsel.
·The learned Solicitor.General. who appeared
in support of the petitioner, did not press the contention against the State of West Bengal. The only
point seriously pressed by him was that on a proper
interpretation of the provisions of the Stamp Act and
the Rules framed thereunder it would be wrong to
hold that the document required to be stamped with
the stamps purchased from U. P. Government.
The
learned Solicitor-Genera! did not address us on the
question as regards the amount of the stamp duty.
1 S.C.R.
SUPREME COURt REPORTS
541
There cannot be any doubt that when it be~
comes necessary for any . public officer of a Stateusing that word to mean an officer in charge of a
public officc--to decide whether an instrument is or
is not "duly stamped" the law he has to apply is the
Indian Stamp Act in the light of the appropriate
modifications made by the State Legislature. So,
when the Uttar Pradesh public officers had to decide
in the present case whether the original mortgage
deed was or was not "duly stamped" they had to
examine_ for the purpose the Indian Stamp Act as
it stood after its amendment by the Uttar Pradesh
Legislature. Section 3 of the Stamp Act creates a
liability for stamp duty.
Section 3 after its amendment by the U. P. legislature stands thus:--
"3. Subject to the p:ovisions of this Act and
the exemptions contained in Schedule I, the
following instruments shall be chargeable with
duty of the amount indicated in that Schedule
as the proper duty therefor, respectively, that
is to say :-
(af every instrument mentioned in that schedule which, not having been previously
executed by any person, is executrd in the
States on or after the first day of July,
l8!Jtl;
..
(b) every bill of exchange (payable otherwise
than on demand) o:r
promissory note
drawn or made of the States on or after·
that day and accepted or paid, or presented for acceptance or payment or endorsed,
transferred or otherwise negotiated, in the
States; and
(c) every instrument (other than a bill of
exchange, or promissory note) mentioned
in that Schedule which, not having been
1963
N1w Ctnltal Juti
Mills c •. Lld.
v.
Tiu State of
Wist Bngal
· D•r Gupta, I.
li63
N1•CIOJra/Jut1
Mills C1. Lttl.
v.
Tiii $1411 ef
Will B,.1al
/)., Cio#l4, /.
542 SUPREME COURT REPORTS [1964] VOL.
previously executed by any person, is
executed out of the States on or after that
day, relates to any property situate, or •to
any matter or thing done or to be done,
in the States and is received in the States : --
Provided that, except as otherwise express·
ly provided in this Act, and notwithstanding
anything contained in clauses (a), (b) and (c)
of this section or in Schedule I or I-A the
following instruments shall subject to the
exemptions contained in Schedule I-A or l·B
be chargeable with duty of the amount indi·
cated in Schedule I-A or l-B as the proper
duty therefor respectively, that is to say-
(aa) every instrument mentioned in Schedule
I-A or 1-B which not having been previously
executed by any person was executed in Uttar
Pradesh-
(i)
in the case of instruments mentioned in
Schedule I-A on or after the date on
which theU. I'. Stamp (Amendment) Act,
I 948, came into force, and
(ii) in the case of instruments mentioned in
Schedule 1-B on or after the date on which
the U. P. Stamp (Amendment) Act, 1952,
comes into force.
(bb) ev~ry instrument mentioned in Schedule
l·A or 1-B which not having been previously
executed by any person, was executed out of
Uttar Pradesh-
(i)
in the case of instruments mentioned in
Schedule I-A, on or after the.date on which
the U. P. Stamp (Amendment) Act, 1948,
came into force, and
1 $.C.R.
SUPREME cotrR.t REPORTS
543
(ii) in the case of instruments mentioned in
Schedule I-Bon or after the date the U. P.
Stamp (Amendment) Act, 1952 comes into
force, and relates to any property situated,
or to any matter or. thing done or to be
done in Uttar Pradesh and is received in
Uttar Pradesh:
Provided also that no duty shall be charge·
able in respect of-
( 1) any instrument executed by, or on behlllf
of, or in favour of, the Governme:nt in cases
where, but for this exemption, the Government
. would be liable to pay the duty chal'"geable in .
respect of such instrument ;
(2) any instrument for the sale, transfer or
· other disposition, either absolutely or by way
of mortgage or otherwise, of any ship or vt'Ssel,
or any part, interest, share or property of or in
any ship or vessel registered under the Merchant
Shipping Act, 1894, or under Art. XIX of 1838,
or the Indian Registration of Ships Act, 1841,
(X of 1841), as amended by subsequent
Acts."
Another important chadge in the legal position
was effected by framing rules under the Act. While
s. 74 empowers the State Government to make rules
relating to the sale of stamps, s. 75 empowers the
Government generally to make rules "to carry out
generally the purposes of the Act." Section 76
provides that all rules made under the Act shall be
published in the official gazette and on such publication shall have effect as if enacted by the Act.
Of the rules framed by the Uttar Pradesh Government it is necessary to consider in the present case
Rule 3 which is in these words :-
.
"3, Except as otherwise provided by the Stamp
196'! .•
Ntw Cmiral ·Jttll . ·
Milli C•. Lrd, :
•.
'
TA1 Stoll •l·
Wist Bnit"1··
Du <Jupta, I. •
1963
N"" C.UoJ Juh
Mi/U Co. Ltd
...
7711 s,.,, ef
wuc.11..,,1
Doi GoPlll, J.
544 SUPREME COURT REPORTS [1964] VOL.
Act or by these rules~
(i) all duties with which any instrument is
chargeable shall be paid, and such payment shall be indicated on such instrument,
by means of stamp issued by the Government for the purposes of the Act, and
(ii)
a stai;1p which by any word or words on
the face of it is appropriated to any particular kind of instrument shall not be used
for an instrument of any other kind.
(2) :there shall be two kinds of stamps for
ind.eating the payment of duty with which
imiruments are chargeable namely;
\·a)
impressed stamps overprinted with the
words "L' ttar Pradesh" or the
letters
''Ll, P.", and
(b) adhesive stamps overprinted with letters
"U. P.";
Provided that the payment of stamp duty
on instruments, ex\cuted in any part of British
India other than C ttar Pradesh and governed
by S.19-A of the said Act, as amended in its
application to ·the Uttar Pradesh, may be
indicated by stich stamps as may be
prescribed for use in that part to the extent of
the duty payable there, the additional duty,
if any chargeable in
the U ttar Pradesh
being paid by means of stamps prescribed in
this rule. Sub·rule (:!) of this rule shall take
effect from !st A~ril, 1942 :-
Provided further that all impressed and
adhesive stamps for indicating the payment of
I s.c.R.
SUPREME COURT REPORTS
541>
duty with which instruments are chargeable
and which are not overprinted with the words
"Uttar Pradesh" or "U.P." respectively, shall
be consumed or exchanged
at the treasuries
in Uttar Pradesh,
provided that they are
undamaged and . unspoiled, with overprinted
stamps of the
name and denomination and
description before lst April, 1942, after which
date the use or exchange
of impres~ed and
adhesive stamps not so overprinted, shall not be
permissible, except to the extent indicated in
the first proviso."
The effect of s. 76 already mentioned above is
that this rule oprrates as a part of the stamp Act.
In deciding whether the instrument had been duly
stamped or not the public officer had to consider not
only the provisions of the Act but also the provisions
of the rules. The position that confr,mted the officers
may be summarised thus: The document had been
executed in Uttar Pradesh. So, it became liable to
pay duty under s. 3 (aa) of the Act as amended in
Uttar Pradesh. Rule 3 required that the liability had
to be discharged by using stamps overprinted with
the words "Uttar Pradesh" or "U. P.". The instrument did in fact bear stamps overprinted with the
words "West Bengal" and not with the words "UttarPradesh" or "U. P.". The public officer was therefore bound to hold that it had not been stamped in
accordance with the law in force in Uttar Pradesh.
On behalf of the petitioner it is urged that even
so the officer should have held that the document
was
duly
stamped. Reliance is placed for this
contention on the definition of the words "duly
stamped" ins. (2) (ii) of the Act. The definition runs
thus :-
"duly stamped" as applied to an instrument
means that the instrument bears an adhesive
}(1,w Cifilral Juli
MUlsCo.·L1d.
••
7 "' $1411 oJ
W.st BntgdJ
Dos Gupra,' J
1961
x..,, c-.1 Jwr.
MiJJ1 Co. Lld.
y,
Tiu .~tall qf
Wut 81111.J
Du GvfJlo, J,
546
SUPREME COURT REPORTS[l964]VOL.
or impressed stamp of not less than the proper
amount and that ~uch stamp has been affixed
or used
in
accordance with the law for
the time being in force in India."
Leaving out of consideration for the present,
the question of what should be the proper amount
of the stamp, it is necessary to consider whether when
the officer found that the stamp had not been affixed
or used "in accordance with the law for the time
being in force in Uttar Pradesh" he was entitled to
say also that the stamp had not been affixed or used
in accordance with the law for the time being in
force in "India". It is pointed out that like the
Uttar Pradesh legislature the
Bengal legislature
had also amended the stamp law and framed its own
rules. The amendment of s. 3 in Bengal was by the
addition of a proviso in these words :-
"Provided that, except as otherwise expressly
provided in this
Act, and
notwithstanding
anything contained in cl. (a), (b) or (c) of this
section or in Schedule I, the amount indicated
in Schedule I-A to this Act shall, subject to the
exemptions contained in that Schedule, be the
duty chargeable under this Act on the following instruments, mentioned in
clauses (aa)
and (bb) of this proviso as
the proper duty
therefor respectively, ·
·
(aa) every instrument, mentioned in Schedule
J. A
as chargeable
with duty under that
Schedule, which, not
havin~ been previously
executed by any person, is executed in Bengal
on or after the first day of April, 1922; and
(bb) every instrument mentioned in Schedvle
1-A, as chargeable with duty
under that
Schedule, which, not having been previously
executed by any person, is executed out of
1 S.C.R.
SUPREME COURT REPORTS
547
Bengal on or after the first day of April. 1922,
and relates to any property· situated, or to any
matter or thing done or to be done in Bengal
and is received in Bengal."
The Bengal Government also framed rules
under s. 76 which were duly published in the
Gazette and on such publication became part of the
Act. Rule 3 of these rules, as it now. stands requires
that the duty payable must be paid by means of
stamps overprinted with the words "West Bengal."
The instrument in the present case is mentioned in
Schedule 1-A of the Stamp Act as in force in West
Bengal and though executed out of West Bengal it
relates to property situated in West Bengal and was
for the purposes of registration received in West
Bengal. It was therefore chargeable under s. 3 (bb)
of the Stamp Act as in force in
Bengal.
This
duty was paid by stamps overprinted with the words
''West Bengal" in accordance with the stamp rules
in force in West Bengal. On behalf of the petitioner
it is urged that the stamp law in force in West
Bengal was as much a law in force in India as the
stamp Law in Uttar Pradesh is the law in force in
India. It is argued that in deciding whether an
instrument is "duly stamped" within the meaning of
the Stamp Act it was necessary for the officer in Uttar
Pradesh to ascertain the law in other parts of India
also in order to decide whether or not "stamp" has
been affixed or used in accordance with the law for
the time being in force in Ind \;i.
It is next urged that when the officer finds that
an instrument has been stamped in accordance with
the law in force in West Bengal he is bound to hold
that it has been stamped in accordance
with
the law for the time being in force in India and thus
"duly stamped" within the meaning of the Stamp
Act.
1965
New C1nlral Jut1
Mills Co • .lld.
••
Tli1 Stal• of
.Wist IJentaJ.
Das Gupta, J.
--·
N1io Catr.l J·1.t1
Milli C.. Ltd.
•.
Tiu V1t111 of
w,s1 Bm1al
Dat;yr., J.
548 SUPREME COURT REPORTS [1964] VOL.
The problem is therefore reduced to this :
Where an officer in U ttar Pradesh finds that an instrument has not been stamped in accordance with the
law in force in Uttar Pradesh, how is he to proceed?
It is easy to see that similar problems may arise
before public officers of other States.
Thus, an
officer in Bihar who has to decide whether a particular
instrnment has been duly stamped, mav find that it
has bee11 stamped in accordance with the law in
force in t •• ddras but not in accordance with the law
in fnrce in Bihar. Should he hold that the instrument
has been duly stamped, in such circumstances ?
Primarily, the liability of an instrument to
stamp duty arises on rxecution. Execution in India
itself made the instrument liable to stamp duty under
s. 3 ta) as it stood before the amendment.
Under s. 3
(c) execution out of India, where the instrument
relates to property situated or any matter or thing
done or to be done in India t >gether with the further
fact that the instrument is received in India, made
the instrument chargeable with duty.
In amending
to Stamp Act what thP State legislatures substantially did was to treat the particular State as
equivalent to India. Thus, after the amendment by
the U.P. legislature the position in law is that execution of an instrument in Uttar Pradesh is made the
primary dutiable event and liability to stamp duty
arises on such execution.
Apart from that, liability
also arisrs where the instrument though executed out
of lJtrar Pradesh relates to property situated or any
matter or thing done or to be done in Uttar Pradesh,
and is received in Uttar Pradesh. It mav be mentioned
that the changes in the law made by the other State
legislatures arc exactly similar.
It is clear that in mJny cases the only one liability, viz., the liability on execution of the document
will arise. After the amendment of the Act the liabi.
lity can no longer be said to arise generally in India
1 S.C.R.
SUPREME COURT REPORTS
549
but must be held to arise in the particular State where
the instrument is executed. It stands to reason that
liability having arisen in a particular State. it cannot
be held to be discharged in accordance with the law
in force in India unless it is discharged in accordance
with the law of the State where it arises.
In other
words, where the only liability of an instrument to
stamp duty is the execution in Uttar Pradesh it must
bear stamps of the amount and of the description as
required by the law ofUttar Pradesh. If the liabi·
lity of the instrument is on execution in Bihar it must
bear stamps of the amount and description required
by the Jaw in Bihar; and so in the case of every other
State which has amended the Stamp law iri the same
manner as in Uttar Pradesh. In all these cases the
instrument can be said to be duly stamped only if it
bears stamps of the amount and description in accor·
dance with the law of the State concerned the law
including not only the Act but also the rules framed
under the Act.
Some complications arise in the cases where
both the liabilities arise-i.e., where the instrument is
executed in one State but is related to property situ·
ated in or to things done or to be done in another
State and is received in the second State. In these
cases the liability to stamp duty arises first under the
stamp law of the first State on account of the execution in that State ; a second liability arises under
the Jaw of the second State when the instrument
i~ received in that second State.
How is the liability to be discharged ? Has
it to be discharged in accordance with the law in
force in the State where execution takes
place
or in
accordance with the
law in force in
the State where the second dutiable event, viz.,
the receipt in the second State occurred ? Obviously,
an
officer of the first State
may reasonably
think that it is the law of his State which must prevail
1961
N1w Central Juli
Mills Co. L111.
••
Thi Stat1 a/
Wist Bmtal
Dar G.pta, J.
/90.1
.N1w C.rnttol JuU
,tti/11 Co. L1J.
v.
Th. .\"tat1 nf
iv1st Btt111I
l.>..t Gu/""'• J.
550 SUPREME COURT REPORTS [1964] VOL.
and so even if the document has been stamped in
accordance with the law of the other State he may
ignore that stamping as not done in accordance with
the law in India and proceed to demand that it
must
bear stamps in ·accordance with the law
of his
State. It was
to
a void
the
hardships
that may conceivably result from such a situation that
the legislatures of different States enacted s. 19 A of
the Stamp Act.
This section of the Uttar Pradesh
Act runs thus : -
"l 9A. \Vhere
anv
instrument
has
become
chargeable in any part of the States other than
the Uttar Pradesh with duty under t)iis Act or ,
under any other law for the time being in force
in any part of the States and thereafter becomes, chargeable with a higher rate of duty in
the Uttar Pradesh under clause (bb) of the first
proviso to section :i, then,
(i)
notwithstanding anything contained in the
first proviso to section 3 the amount of duty
chargeable on such instrument shall be the
amount chargeable on it under Schedule
l-A, or Schedule l ·B, less the amount of
duty, if any, already paid on it in the
States; and
(ii)
in ·addition to the stamps, if any, already
afTixed thereto, such instrument shall be
stamped with the stamps necessary for the
payment of the amount of duty chargeable
on it under (I) in the samP. m~ner and at
the same time and by the same persons as
though such instrument where an instru·
ment recdved in the States for the first
time at the time when it becomes chargeable
with the higher duty."
Therefore, where the rate of duty in Uttar
Pradesh for an instrument which becomes chargeable
1 s.c.R.
SUPRLME COURT REPORTS
551
for stamp duty as mentioned above, (i.e., an instrument executed out of Uttar Pradesh and relating
to property situated or to any matter or thing done
or to ·be done in Uttar Pradesh) with a higher rate
or duty in Uttar Pradesh than in West Bengal,
only the; excess has to be paid in Uttar Pradesh and
it is only this excess which requires to be paid in
Uttar Pradesh stamps. (Vide Rule 3 of the Uttar
Pradesh Rules).
Section 19-A in
terms applies
only to
an
instrument which after becoming chargeable
in any
State
outside Uttar
Pradesh
becomes
chargeable
in
Uttar
Pradesh with a higher
rate of duty.
It seems to
us, however,
that
where the rate of duty in Uttar Pradesh is the same
or even lower, no further. duty is payable on such an
instrument.
For, it would be anomalous and unreasonable to hold that the legislature intended that
though where a higher rate is payable in Uttar
Pradesh the excess need only be paid, the Uttar
Pradesh rate should be paid in full where what has
already been paid is the same or higher.
The result of this will be that if an instrument
after becoming liable to duty in one State on execu ·
tion ·there becomes
liable to duty also in another
State on receipt there, it must first be stamped in
accordance with the law of the first State and it
will not require to be further stamped in accordance
with the law of the second State when the rate of
that second State is the same or lower ; and where
the rate of the second State is higher, it will require
to be stamped only with the excess amount and that
in accordance with the law and the rules in force
in the second State.
The mortgage deed which i~ the subject-matter
of the
present petition
was executed in Uttar
Pradesh, though it related to property situated in
19GJ
New Ct1t1ralJul#
Mills Co. Ltd.
..
Thi St41e ef
Wtsl Bental·
Das C.upt~. _J.
1963
N1w c,r111a1 Jut•
Mills Co Lt!.
..
Tlw Stat1 of
• 1V1st Bengal
Das Gvp14, J
552
SUPREME COURT REPORTS [1964) VOL.
West Bengal
and was
received in that State for
registration. The first dutiable event was the exe·
cution, which took place in
U. P.; the second
dutiable event was rhe receipt in West Bengal. When
it came before the officers of Utt<tr Pradesh for
decision whether it was duly stamped or not, the
officers of Uttar Pradesh were bound to hold-for the
reasons we have discussed earlier-that the instrument
was not duly stamped as it did not bear Uttar
Pradesh stamps.
The fact that the instrument had
been stamped in accordance with the law of West
Bengal could not justify a conclusion that it had been
stamped
in accordance with the law in force in
India.
The Officers of the State of U. P. therefore
rightly held that the original mortgage deed was not
duly stamped.
The petitioners are not, therefore, entitled to
any relief.
In the circumstances of the case, we
order that the parties will bear their own costs.
Petition dismissed.