The Time of Stamping
Chapter Sixty-Five
Syllabus topic 4.2, "Time of Stamping [Sections 17 - 19]"
Pages 344 to 347 of 378
In one line
A document executed in Maharashtra must be stamped before or at the time of signing, or at latest on the next working day; one executed outside the State has three months from when it is first received here.
In exam wording: section 17 provides that all instruments chargeable with duty and executed by any person in this State shall be stamped before or at the time of execution, or immediately thereafter on the next working day following the day of execution.
Section 17: instruments executed in the State
The rule is strict and it is the opposite of the registration deadline. Stamping is not something to be attended to later: the duty must be on the document before or at the time of execution, and the only concession is that it may be done immediately thereafter, on the next working day following the day of execution.
The reason is that stamp duty is a tax on the instrument, and the instrument comes into existence on execution. A rule allowing months would let parties wait to see whether the document would ever be needed, and pay only if it was.
The proviso allows a clearance list described in the articles it names to be stamped by an officer authorised by the State Government under rules, where the list is submitted for stamping by the clearing house of an association in accordance with its rules. That is a machinery concession for stock-exchange clearing, not a general extension.
Section 18: instruments executed outside the State
Sub-section (1). Every instrument chargeable with duty executed only out of this State may be stamped within three months after it has been first received in this State.
Two elements: the instrument must have been executed only outside the State, and the three months runs from first receipt here, not from execution.
Sub-section (2). Where such an instrument cannot, with reference to the description of stamp prescribed for it, be duly stamped by a private person, it may be taken within that three months to the Collector, who shall stamp it in the manner prescribed by rules, with a stamp of such value as the person taking it requires and pays for.
Sub-section (2) exists because some kinds of stamp are not available over the counter. The party is not to be defeated by his inability to buy the right stamp himself.
Section 19: instruments executed outside the State and liable to increased duty here
Section 19 deals with the case where an instrument of a kind described in Schedule I, relating to property situate or to a matter or thing done or to be done in this State, is executed out of the State and afterwards that instrument, or a copy of it, is received in the State.
The Time of Stamping
In that case the amount of duty chargeable is worked out on the footing that the instrument belongs here, and credit is given for duty already paid elsewhere, so that what is payable in Maharashtra is the difference between the duty chargeable under this Act and the duty already paid under the law of the place of execution.
Two features are worth marking. The section was amended to catch a copy of the instrument as well as the instrument itself, which closes the same gap as the first proviso to section 3. And the charge is a top-up, not a second full duty, which is what makes it fair as between States.
How the three sections fit together
Section 17 is the ordinary case: executed here, stamp before or at execution, or next working day.
Section 18 is the timing rule for a document executed wholly outside: three months from first receipt here, with the Collector's help where the right stamp cannot be bought privately.
Section 19 is the amount rule for such a document where Maharashtra's duty is higher: pay the difference.
So sections 18 and 19 answer different questions about the same document, when and how much, and a full answer on a foreign-executed instrument uses both.
A worked example
Farida executes a mortgage deed at Pune on a Friday.
When must it be stamped? Before or at the time of execution, or at latest on the next working day following the day of execution, under section 17.
She stamps it three weeks later. The instrument is not duly stamped, and the consequences are those in section 34: inadmissible in evidence until duty and penalty are paid, and liable to be impounded under section 33.
Change the facts. Gopal executes a deed at Bengaluru relating to land at Pune, and brings it to Maharashtra two months later.
When must it be stamped? Within three months after it was first received in this State, under section 18(1).
The prescribed stamp is not one he can buy. He may take it to the Collector within those three months, who must stamp it with a stamp of such value as he requires and pays for, under section 18(2).
How much is payable? Under section 19, if Maharashtra's duty exceeds the duty already paid in Karnataka, he pays the difference, not the whole again.
He leaves the original in Bengaluru and brings a copy. Section 19 as amended catches a copy of the instrument received in the State, and the first proviso to section 3 charges a copy with full duty where the original's duty was unpaid.
The Time of Stamping
What it does NOT mean
Stamping is not like registration. There is no four-month period; the duty must be on the document before or at execution, or on the next working day.
The next-working-day concession is not a grace period of a day at large. It runs from the day of execution.
Section 18 does not apply to a document executed partly here. It requires execution only out of the State.
The three months runs from first receipt in the State, not from execution.
Section 19 does not charge full duty twice. It charges the difference where the duty here is higher.
A copy is not outside the net. Section 19 catches a copy received in the State.
Distinctions
| Executed in the State | Executed out of the State | |
|---|---|---|
| When to stamp | Before or at execution, or the next working day, s.17 | Within three months of first receipt in the State, s.18(1) |
| Where the right stamp is unobtainable privately | Not applicable | Take it to the Collector within three months, s.18(2) |
| How much | The Schedule I duty | The difference between the duty here and the duty already paid, s.19 |
| Stamp Act, s.17 | Registration Act, s.23 | |
|---|---|---|
| Deadline | Before or at execution, or next working day | Four months from execution |
| Runs from | Execution | Execution |
| Relief for delay | None in s.17; the document is simply not duly stamped, with s.34 consequences | The Registrar may accept up to four months late on a fine, s.25 |
Quick revision
- s.17: an instrument executed in the State must be stamped before or at the time of execution, or immediately thereafter on the next working day. A clearance list may be stamped by an authorised officer when submitted by a clearing house.
- s.18(1): an instrument executed only out of the State may be stamped within three months after it is first received in the State.
- s.18(2): where the prescribed stamp cannot be used by a private person, the instrument may be taken within that period to the Collector, who shall stamp it.
- s.19: where such an instrument, or a copy of it, relating to property or a matter in this State is received here, the duty payable is the difference between the duty chargeable under this Act and the duty already paid.
- Contrast the Registration Act's four months to present a document: stamping is far stricter and has no equivalent of section 25 relief.
Test yourself
1. When must an instrument executed in Maharashtra be stamped? Before or at the time of execution, or immediately thereafter on the next working day following the day of execution.
2. What period applies to an instrument executed only outside the State? It may be stamped within three months after it has been first received in this State.
The Time of Stamping
3. What if the prescribed description of stamp cannot be used by a private person? The instrument may be taken within the three months to the Collector, who shall stamp it in the prescribed manner with a stamp of such value as the person requires and pays for.
4. How much duty is payable on a document executed outside the State but relating to property here? Under section 19, the difference between the duty chargeable under this Act and the duty already paid under the law in force where it was executed, so that the charge is a top-up and not a second full duty.
5. Does section 19 apply to a copy? Yes. It was amended to apply where the instrument or a copy of the instrument is received in the State.
6. How does the stamping deadline differ from the registration deadline? Stamping must be done before or at execution, or on the next working day, and there is no provision for condoning delay. Registration allows four months from execution under section 23 of the Registration Act, extendable by up to four months on a fine under section 25 of that Act.
The rest of this subject
These notes are cut from the University's printed syllabus. Open the syllabus itself, or the past papers, for the same subject.