Stamp Act

Penalty – Discretion - The statutory scheme under Indian Stamp Act, 1899, Section 40, vest the discretion to the Collector to impose the penalty amount not exceeding ten times -  Whenever statute transfers discretion to an authority the discretion is to be exercised in furtherance of objects of the enactment -  The discretion is to be exercised not on whims or fancies rather the discretion is to be exercised on rational basis in a fair manner - The amount of penalty not exceeding ten times is not an amount to be imposed as a matter of force - Indian Stamp Act, 1899, Section 40. #2020 SCeJ 1693  

 

Stamp Act, 1899, Section 40   - Penalty - When a discretion is given to a public authority, such public authority should exercise such discretion reasonably and not in oppressive manner - Fraud or deceit in order to deprive the Revenue or undue enrichment are relevant factors to arrive at a decision as to what should be the extent of penalty  - Whether the imposition of ten times penalty by the Collector of Stamps under Section 40 of the Indian Stamp Act, 1899 was validly imposed or not ? –  Legislature has never contemplated that in all cases penalty to the extent of ten times should be ultimately realized. #2020 SCeJ 1693 

 

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Penalty – Discretion - Purpose of  - The purpose of penalty generally is a deterrence and not retribution -  When a discretion is given to a public authority, such public authority should exercise such discretion reasonably and not in oppressive manner - The responsibility to exercise the discretion in reasonable manner lies more in cases where discretion vested by the statute is unfettered - Imposition of the extreme penalty (i.e. ten times of the duty or deficient portion thereof) cannot be based on the mere factum of evasion of duty - The reason such as fraud or deceit in order to deprive the Revenue or undue enrichment are relevant factors to arrive at a decision as to what should be the extent of penalty under Section 40(1)(b) of the Indian Stamp Act, 1899 - Indian Stamp Act, 1899, Section 40. #2020 SCeJ 1693  

 

  

Indian Stamp Act, 1899, Section 33, 35, 38, 39 , 40   - The legislative intent which is clear from reading of Sections 33,35,38 and 39 indicates that with respect to the instrument not duly stamped, ten times penalty is not always retained and power can be exercised under Section 39 to reduce penalty in regard to that there is a statutory discretion in Collector to refund penalty. #2020 SCeJ 1693   

 

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