Adjudication as to Proper Stamp

In one line

A party who is unsure what duty a document attracts may take it to the Collector and have him rule, and the Collector's certificate then makes the document good for all purposes.

In exam wording: section 31 provides that when an instrument, whether executed or not and whether previously stamped or not, is brought to the Collector by one of the parties, who applies for his opinion as to the duty with which, or the Article of Schedule I under which, it is chargeable, and pays the prescribed fee, the Collector shall determine the duty, or the Article, under which in his judgment the instrument is chargeable.

Why adjudication exists

Schedule I is long and the classification of a document is often genuinely doubtful: the same paper may look like a conveyance, an agreement or a settlement, and the rates differ. A party who guesses wrong faces the penalty machinery in section 34, and a party who over-pays has to claim an allowance.

Adjudication removes the guesswork. It is a voluntary, pre-emptive ruling: the party asks first and pays what he is told, and the Collector's certificate then protects him.

Section 31: the application

Who may apply. One of the parties to the instrument. It is not open to a stranger.

What may be brought. An instrument whether executed or not, and whether previously stamped or not. So a draft may be adjudicated before signature, which is the prudent course.

What is asked. The Collector's opinion as to the duty with which it is chargeable, or the Article of Schedule I under which it is chargeable.

The fee. One thousand rupees in a case not involving stamp duty on an ad valorem basis; and, in cases involving ad valorem duty, one rupee for every Rs. 1,000 or part, subject to a minimum of five and a maximum of twenty-five rupees.

The 2025 proviso: a deposit for executed instruments. After the commencement of the Maharashtra Stamp (Amendment) Act 2025, in respect of executed instruments no application is accepted for adjudication unless the applicant has first deposited with the Collector the amount the proviso specifies, which where duty is chargeable on market value is the difference between the duty on the stated consideration and the duty on the market value.

The reason for the change is plain: adjudication of an already-executed instrument was being used to postpone payment while the classification was argued. Requiring the deposit up front removes the advantage of delay. A student should not describe adjudication of an executed instrument as costing only the fee.

Section 32: the certificate, and what it achieves

Sub-section (1). Where the instrument brought under section 31 is, in the Collector's opinion, chargeable with duty, and either (a) he determines that it is already fully stamped, or (b) the duty he has determined, or such sum as with the duty already paid equals it, has been paid, the Collector shall certify by endorsement on the instrument that the full duty, stating the relevant Article of Schedule I and the amount, has been paid.