Validity of differential Stamp duty on Instruments executed outside Maharashtra under Bombay Stamp Act, 1958

The Indian Hume Pipe Co. Ltd. Vs. State of Maharashtra (Bombay High Court)

 The bench noted that, in the present case, the deed is used in the State of Maharashtra for registering a charge by lodging a verified copy of the deed in the office of the Registrar of Companies in accordance with sections 125 read with 130 of the Companies Act. “The deeds were chargeable in the State of Gujarat as the same are executed in the said State. Copies of the same are received in the State of Maharashtra for registering a charge in the office of the Registrar of Companies. The entries in the Schedule VII extend to all ancillary or subsidiary matters which can fairly and reasonably be comprehended in it. If the entry 63 applies to instruments, it will extend to all subsidiary and ancillary matters connected with the said entry. Section 7 of the said Act which deals with copies of the instruments has a direct and substantial connection with the said entry 63. The said entry cannot be given a restricted meaning and interpretation which is contrary to the law laid down by the Apex Court. Liberal construction will have to be put so that it can be of a wide amplitude. The entry 63 will encompasses in itself even copies of instruments.”

The bench also observed that section 7(1)(b) intended to ensure that no one evades the stamp duty payable on an instrument under the said Act by executing and stamping the original in another State where a lesser stamp duty is payable and thereafter, bring a copy thereof within the State for doing something on the basis of the rights and liabilities created by it. “The legislative intent is to ensure that there is no evasion of duty on such instruments. The provision is to levy only a differential duty. There is no double taxation.