This article is written by Shenbaga Seeralan S. This article gives the readers a broad perspective about the legislation relating to Stamp Duty within the geographical premise of the State of Tamil Nadu. The article tries to imbibe the necessary understanding about the act to its readers and highlight the judicial pronouncements along the trajectory.

This article has been published by Shashwat Kaushik.

Introduction

The term absolute ownership was alien to the people of pre-historic times, as they lived a pastoral and nomadic form of life. When the concept of agriculture was understood by them, they began to settle in one place along with their cattle, weapons and other marvellous contraptions. This is when the sense of ownership or claim for property stung the minds of the people.  Even then, there was only community ownership rather than individual ownership. During the period of Mahajanapadas, around 2nd – 4th century BCE, the concept of individual ownership surfaced. Any commodity or property that supports a person in his/her livelihood is considered to be under his/her ownership. The King was the sole owner of all the land under his reign. He transferred or gifted the land to his subjects by the means of copper plate inscriptions or stone inscriptions. This was the first form of an official document, evidencing personal ownership of property. Palm leaf manuscripts and cuneiform writings were also prevalent in that time. During the late 10th century, various forms of taxes for land were introduced by the sultanate. This urged the need for registration of documents in the later part of the rule. The first codified act for the registration of any document was introduced by the British. It was The Indian Registration Act, 1908. Eventually, taxes were collected for such registrations. Following this progression, any registration which was made, carried along with it a tax called stamp duty.

The stamp duty can be defined as a type of tax levied by the government on registration of a legal document within its geographical limit. Stamp duty is a type of indirect tax which is usually levied by the Central government but collected and appropriated by the respective states. In India, rules regarding the levy of stamp duty are governed by The Indian Stamp Act, 1899. This act generalises the regulations regarding the charge that is levied on the registration of a tangible or intangible property. States like Maharashtra, Gujarat, Karnataka, Rajasthan, Kerala and Tamil Nadu have standalone acts that add specificity to the stamp duty regulations. The Indian Stamp Act has been amended by the Tamil Nadu government through the Legislative Assembly multiple times. An amendment has been carried out as recently as 2023. The major portion of stamp duty regulation stands by  The Tamil Nadu Stamp Act, 2019. Under this act various region specific changes were made and implemented progressively. 

Objective of Tamil Nadu Stamp Act, 2019 

The major objective of the Stamp Act is to meet the financial needs of the concerned state. It is purely monetary in nature and has nothing to do with the legality of the registration. The Registration Act and the Stamp Act are autonomous yet interdependent upon each other. It is mandatory to pay this indirect tax for the registration of any legally acceptable document. It adds to the prowess of the State’s fiscal condition. In the financial year 2022-23, the total revenue collected from Stamp duty and Registration fees in Tamil Nadu was Rs. 16323 crore which is 14% higher than the previous year. The share of stamp duty out of the total revenue of the state is nearly 11.4%. It should also be noted that though certain documents are exempted from mandatory registration, it does not exempt those documents from the payment of stamp duty. For example, a document ascertaining the lease of a building for  duration less than 1 year does not require registration, but it does not exempt that document from the payment of stamp duty.

Stamp duty is a type of tax levied on the document and not on the purpose. For example, when a property is registered, stamp duty is collected on the bond and legal documents registered but not on the property itself. Also, stamp duty is not a piece of evidence to the ownership, rather it serves the purpose of monetary returns to the government for facilitating the service of registration. 

Another salient objective of collection of Stamp duty is to increase the transparency in the registration. Let us suppose a property worth Rs. 1 crore is registered but to avoid high registration charges, there is a possibility to undervalue the instrument. As per The Tamil Nadu Stamp (Prevention of undervaluation of instruments) Rules, 1968, the market value of the property has to be furnished before the registration and the valuation of the instrument is calculated based on that. This prevents trickling of stamp duty revenue to the government and improves public trust on governance. This objective of the act was widely discussed in case of Ramesh Chand Bansal v. Magistrate/Collector (1999). This act also facilitates ease of registration by making the charges known upfront to the beneficiaries. In the judgement of Jagdish Narain v. Chief Controlling Revenue Authority (1994), the judge mandated the authorities to correctly calculate the market value, thereby preventing any hardship that might be faced by the appellant. 

Important definitions 

The Tamil Nadu Stamp Act, 2019 (hereinafter referred to as the “Act”) is an act that extends to the whole of the state of Tamil Nadu. Similar to every other act, Section 2 of this Act describes the terminologies involved to understand the crux of the Act. A few important definitions are discussed below.

• “Association” is an organisation that is incorporated to manage the business and allied services related to the product or service offered by the company or institution. This term is defined under Section 2(1) of the act.
• “Bond” is an instrument that mandates a person to pay money in exchange for a particular act to be done or not done by another party. The bond carries the attestation of all the parties and the witness. The delivery expected may be a product or an instrument or a service. This term is defined under Section 2(3) of the Act. In the judgement of the case Mariasusai v. A.Francis (2007), it was noted that an instrument which did not create any obligation but merely quantified the work, cannot be termed as a bond.
• “Chargeable” means a sum that is applied to the document or the instrument that comes under the precinct of the Act. This is applied at the first execution of such an instrument or to the first person executing. This term is defined under Section 2(4) of the Act. The definition was highlighted in the judgement of the case Narayanachetty v. Karuppathan (1881) as defined by the General Stamp Act,1879.
• “Chief Controlling Revenue Authority” is an officer appointed under Section 3(1) of the Registration Act, 1908. This appointment is made by the State Government to perform the function of the Inspector General of  Registration. This term is defined under Section 2(5) of the Act.
• “Conveyance” means transfer of a movable or immovable property vide an instrument between parties. Conveyance includes orders made under Section 394 of the Companies Act, 1956 or Section 232 of the Companies Act, 2013 and Section 44A of the Banking Regulation Act, 1949. This term is defined under the Section 2(8) of the Act. In the judgement of Suraj Lamp and Industries Private Limited v. State of Haryana (2012), it was held that the immovable property can be legally transferred only by executing a deed of conveyance.
• “Duly stamped” means an instrument that requires registration should carry a stamp impressed on it, having value not less than the prescribed amount. This term is defined under Section 2(9) of the Act. This definition is highlighted in the judgement of Y.A.A.V.R Sethuraman Chettiyar(late) In re, (1946).
• “Execution” means an instrument duly signed by the authority and parties. Here the signature also includes electronic record as given in Section 11 of the Information Technology Act, 2000. This term is defined under Section 2(10) of the Act.
• “Immovable property” includes anything that is attached to the land, comprising  hereditary privileges, pathway, locomotives, benefits from land and things permanently imbibed to earth. However, this definition does not include trees and growing crops. This term is defined under Section 2(12) of the Act.
• “Instrument” is a document which creates either a right or liability, that can be created, transferred or extended. This definition under the Act does not include promissory note, bill of lading, letter of credit, insurance policy, transfer of share, debenture and receipt. This term is defined under Section 2(15) of the Act. In the case of Shyamal Kumar Roy v. Sushil Kumar Agarwal (2006), agreement of sale comes under the scope of Instrument within the meaning of Section 2(14) of the Indian Stamp Act.
• “Market Value” is a monetary value estimated by the Collector or the Chief Controlling Revenue Authority or the High Court, that the property would fetch if sold in the open market at the time of execution of the instrument. In case of any security, market value denotes the price at which the security will be traded in the stock exchange. This term is defined under Section 2(20) of the Act.
• “Mortgage Deed” is a type of instrument that purports a loan or a debt that is created between a transferor and a transferee in exchange of money for specific rights over a property.  This term is defined under Section 2(21) of the Act. In the case of Chief Controlling Revenue Authority v. M/s. Rani Pictures (1969), the court held that the essential factor of a mortgage deed is that the property should be a specific property.
• “Power of attorney” means empowering a person to act in the name of the person executing such an instrument. Power of attorney cannot be claimed as a title deed as decided by the case of Asha M. Jain v. Canara Bank (2001). This term is defined under Section 2(22) of the Act. This instrument does not carry a charge that is related to court fee.
• “Settlement” is a disposition made in writing related to marriage, property, religious donation or charitable purposes. This is made with the use of any instrument that is non testamentary in nature. This term is defined under Section 2(25) of the Act. In the case of Hussain A. Jodhpurwala v. Yusuf A. Jodhpurwala and others (2015), it was held that when a Settlement deed is executed then the settlee becomes the absolute owner of the property so settled. 
• “Stamp” is defined as the mark or seal made by a person authorised by the State Government or an impressed stamp adhered to the instrument for the purpose of charging the duty under this Act. This term is defined under Section 2(26) of the Act.

Important provisions of Tamil Nadu Stamp Act, 2019 

The Act, constructed with a monetary perspective, aims to bring all the registrations under the radar thereby increasing the financial returns to the Government. The Act comprises 8 Chapters, 76 Sections and 1 Schedule. The Schedule comprises 55 Articles, all governing the charges applicable to every type of document registration.

Liability of Instruments to Duty

Section 3 of the Act discusses the applicability and exception to chargeability of an instrument with the duty as mentioned in the Schedule. 

• Section 3(a) clarifies that the instrument should not be an already executed one.
• Section 3(b) relates to any property and its state of execution during the commencement of the Act.
• Proviso 1 details the exception to chargeability. Any instrument executed in favour of or on behalf of  the State or the Central government is not chargeable. 
• Proviso 2 any sale or transfer of vessels under the Merchant Shipping Act, 1958.
• Proviso 3 exempts an instrument that is executed in favour of or on behalf of the developer as defined under the Section 2(g) of Special Economic Zones Act, 2005.

In the case In Re, Official Liquidator, High Court (2010), it was held that no instrument is admissible as evidence, if it is not duly stamped and registered.

Section 4(1) of the Act deals with a transaction when multiple instruments are involved, where only the principal document is changeable with the highest duty and other instruments are charged with a duty of one hundred rupees instead of the individual duty. Sub-section (2) of Section 4 provides the discretion to the parties to determine which among the instruments is considered as the principal instrument. In the case of Chief Controlling Revenue Authority v. Madras Refineries (1975), it was held that among the loan note, the deed of mortgage and the guarantee agreement, the Mortgage deed is considered as the principal instrument.

Section 5 of the Act mandates that when an instrument is related to multiple distinct matters, then the duty chargeable is the summation of the amount of individual instrument for a distinct matter. A distinct matter is a distinct transaction as detailed by the judgement of the case Board of Revenue v. Narasimhan (1961).

Section 7 of the Act clarifies that when a loan is raised by a local authority by issuance of a bond or any other security other than debentures shall be charged with the duty of 1 percent of the total amount of the bond. Neither stamping nor further duty is required on renewal or division. Moreover, through Sub-section (2), any outstanding loan is exempted from being stamped and charged, ensuring the validity of such loan is also not retracted. However, if there is a willful default of payable duty, then the local authority can charge 10 percent of the total amount of loan and a consecutive penalty for every month thereafter as prescribed by Sub-section (3).

Section 8 of the Act empowers the State government to remit, reduce or compound the duties payable within the territory. An industrial estate was formed from the assistance of Tamil Nadu Government by the name of Tamil Nadu Small Industries Corporation Ltd. (TANSI), which was exempted from paying stamp duty for registering a sale deed. This was highlighted in the judgement of the case Kartheepan Tourist Bus Service v. Government of Tamil Nadu (2004).

Section 9 of the Act ensures that if any branch of a bank  is converted into a wholly owned subsidiary of the bank under the guidelines of the Reserve Bank of India then such conversion along with the transfer of instruments shall not be liable to attract duty.

Stamps and Modes of using them

Section 11 of the Act lists the instruments that require mandatory adhesive stamps. The list includes any instrument that is chargeable with duty more than one rupee, enrolment certificate provided by the State Bar Council, Notarial acts and other instruments as notified by the Government. It is mandatory for the affixed adhesive stamp to be dated not prior to 6 months from execution, contrary to which the instrument becomes inadmissible as evidence as held in the case of Tex India v. Punjab and Sind Bank (2003). 

Section 12 of the Act directs the person affixing an adhesive stamp on an instrument, to cancel the stamp to prevent its reuse. Any instrument that is stamped requires cancellation, if it is not followed then the instrument is deemed to be unstamped. The cancellation of stamps is done through writing the name or initials on the face of the stamp with the date. In the case of Audi Ambalam v. Sevani Ammal (2003), it was noted that at the time of execution, the instrument containing the adhesive stamp should be signed across to make the cancellation legally effective.

Section 13 of the Act elucidates that, when an instrument is written on a paper and adhesive stamp is affixed on it, then the stamp is required to be in the face of the paper, ensuring its cancellation. Section 14 of the Act mandates that no second instrument should be written on an already stamped instrument. Section 15 of the Act declares any instrument in contravention to Section 13 and 14 to be deemed unstamped. In the case of Harnath v. Durgalal (1964), it was held that a promissory note endorsed with a receipt though insufficiently stamped can be considered as evidence on payment of penalty.

Time of stamping instruments

Section 17 of the Act mandates that any instrument that is registered within the state should be stamped before or at the time of execution. Whereas Section 18 of the Act provides 3 months time for stamping instruments executed outside the State, from the date of receiving within the State. This power of stamping the instruments executed outside the State lies with the Collector. In the case of State of Rajasthan v. Khandaka Jain Jewellers (2008), it was held that since Stamp Act is a taxing statute, the time of execution shall be predominant for determining the value of the instrument.

Section 19 of the Act dictates on how an instrument related to a property can be charged, if it was executed outside the State prior to 29th day of March 1997. The amount charged would be less than the amount mentioned in the Schedule, if the charges were paid outside already. Also, the instrument is treated in such a way that the instrument is received and executed for the first time in the State, when it is chargeable with higher duty. Section 20 of the Act allows the difference of duty to be paid for such instruments mentioned in Section 19. The difference of duty is calculated based on location, extent and market value of the property according to Sub-section (2). The maximum time allowed to take action for non compliance shall be four years according to Sub-section (4). The action against non compliance shall be initiated by the Collector within the specified period along with penalty provided under Section 44. A sale deed was registered in the State of Kerala, for a property situated in Tamil Nadu. The Collector ordered the party to pay the deficient duty within the specified period. The party went to the High court by filing a writ petition. The Court held that when an alternate remedy is available, the court cannot entertain such a petition under Article 226 of the Indian Constitution in the case of A. Ramaswamy v. District Revenue Officer(Stamps), Coimbatore (2006).

Duty valuation

Section 21 of the Act directs that if the duty is chargeable based on the valuation of the property, and is expressed in currency other than that of Indian currency, the converted rates in Indian currency on the date of execution are taken. Section 22 of the Act says that when stock or security other than debentures are charged with duty, then such a duty shall be the average price of the stock or the securities on the date of execution of the instrument. When the instrument comes along with a statement of rate of exchange or average price, which is duly stamped, then until the contrary is proved, such statement shall be given predominance according to the Section 23 of the Act.

Section 25 of the Act brings forth that a marketable security connected with mortgage, when duly stamped is considered for execution should be charged with duty as applicable to an agreement or memorandum of agreement under Article 5(5) of the Schedule. Section 26 of the Act grants the leeway to the mortgagee to deduct any already paid duty from the duty that is chargeable during the transfer of property to him. Section 27 of the Act details regarding the valuation of duty in case of annuity.

Sub clauses to Section 27 of the Act	Condition	Duty
(a)	Previously ascertained sum payable for a definite period	Ascertained amount
(b)	Sum payable in perpetuity for an indefinite time non terminable with life	Total amount payable during twenty years from the date of first due
(c)	Sum payable for an indefinite time terminable with life	Maximum amount payable during twelve years from the date of first due.

Section 28 of the Act states that when the value of the property is indeterminate, then the duty is calculated based on the highest value as mentioned in the description of the instrument on the date of execution. However, when a lease of mine, for which the value is not known is considered, then the royalty or share paid as rent can be used to calculate the duty. When the lease is given by a person other than the Government, then the value of the share is set at two lakh rupees per year. Section 29 of the Act mandates the party to mention all circumstances clearly that might affect the market value in the instrument. This rule is also highlighted in the case of Joint Secretary, Board of revenue v. K.R. Venkatarama Ayyar (1950).

Section 30 of the Act clarifies on how to deal with the undervalued instruments of conveyance. If the registering officer believes beyond doubt that the market value of the property is not truly mentioned, then he can inform the party to pay the differential duty accordingly. If the party fails to do so, then the officer can refer the matter to the Collector after registering the instrument. The Collector on receipt of such a reference shall ask the party to pay the differential amount after determining the market value of the property. The Collector can take such an action either by reference or suo motu within five years from the date of registration. According to Sub-section (4), when the party liable to pay the differential amount defaults on the payment then the person is liable to pay the duty in addition to one percent interest per month on the default amount for the entire default period. Sub-section(6) grants the party to appeal against the order of the Collector within two months from the date of receipt of the order. When the duty paid is in excess of the amount mentioned in the order, the differential amount shall be refunded to the party based on Sub-section (12) of Section 30 of the Act.

By the notification of the State Government, a Valuation committee is constituted under Section 31 of the Act, in which the Inspector General of Registration is named as the Chairman along with the appointment of other members. The main aim of the committee is to rightly value  the properties of the State. This Committee serves as the final authority for valuation, with sub committees performing at district level. They perform the task of estimation, revision and administration of the market value within the State.

Duty payable by whom

Section 34 of the Act details on who should pay the duty for stamping based on the instrument for registration. Each of these instruments is mentioned in the Schedule of the Act.

Sub clause of Section 34	Instrument	Whom payable
(a)	Administration Bond (Article 2)	Person executing
	Agreement on title deeds or pledge (Article 6)	Person executing
	Bond (Article 12)	Person executing
	Bottomry bond (Article 13)	Person executing
	Customs bond (Article 23)	Person executing
	Further charge (Article 27)	Person executing
	Indemnity bond (Article 29)	Person executing
	Mortgage deed (Article 34)	Person executing
	Release (Article 45)	Person executing
	Respondentia bond (Article 46)	Person executing
	Security bond (Article 47)	Person executing
	Settlement (Article 48)	Person executing
	Transfer of debentures (Article 52(a))	Person executing
	Transfer of interests (Article 52(b))	Person executing
(b)	Conveyance or Reconveyance of mortgaged property	Grantee
(c)	Lease agreement	Lessee
(d)	Counterpart of the lease	Lessor
(e)	Enrolment certificate in Bar Council	Advocate enrolled
(f)	Instrument of exchange	Parties in equal shares
(g)	Certificate of Sale	Purchaser
(h)	Instrument of partition	Parties in proportion to their respective shares

Adjudication

Section 35 of the Act provides a person with an opportunity to ask for the opinion of the Collector in determining the duty chargeable for a particular instrument by means of making a payment of rupees one hundred. For such purpose, the Collector may ask for related documents and preface about the instrument before determining the charges. The documents furnished by the person shall not be used as evidence against the person furnishing it according to Clause (a) of Sub-section (1) of the Section 35 of the Act. This section is applicable irrespective of whether the instrument is executed or not and whether it is stamped or not.The Collector determines whether the instrument was already stamped or not and whether it requires additional duty to be paid as discussed in the case of Raymond Ltd. v. State of Chhattisgarh (2007). After determining the charges and stamping of the instrument the Collector certifies such instrument by endorsing it under Section 36 of the Act. The Collector also has authority to declare that the instrument presented is not chargeable to any stamp duty. However, he is not entitled to authorise the stamping, in the following cases 

• After the expiration of one month from the date of first execution 
• After three months from the date of  reception  
• In regards to an instrument chargeable with duty exceeding one rupee 
• Mortgage of crop which is not duly stamped.

Instruments not duly stamped

Section 37 of the Act grants authority to a person in charge of a public office as deemed by the State Government, except a police officer, the power to impound the instrument which is not duly stamped. When an instrument is received by the Collector in the mode of referral under Section 35, it can be impounded if not duly stamped. The proviso (a) of the Sub-section (2) mentions that nothing contained in this section is required by the Magistrate or a Judge of a Criminal court before impounding an instrument under the proceedings, except under the proceedings included in Chapter 9 or Chapter 10 of the Criminal Procedure Code, 1973. A Judge of the High court can delegate a person of capacity to examine and impound an instrument under sub clause 2(b). In the case of Trideshwar Daval v. Maheshwar Dayai (1990), it was held that the Collector had the power to impound the order, if the instrument is found to be not duly stamped.

Section 38 of the Act speaks about the recovery of deficient stamp duty. On a certificate from the registrar of the District, that the duty is insufficiently paid, can be recovered from the party responsible or party holding the instrument. This certificate is provided only after a proper enquiry is conducted. Sub-section (3) offers rights to the party to appeal against the certificate issued by the Registrar to the Chief Controlling Revenue Authority within three months from the date of receipt of the certificate. Sub-section (4) grants the Registrar the power equivalent to the Collector in recovery of such deficient duty. Without the issuance of certificate under Section 38, no action can be taken for recovering the deficient duty as mandated by the judgement of the High Court of Madras in the case of R.U. Ebrahim v. District Registrar (1994).

Section 39 of the Act states that any instrument which is not duly stamped cannot be admitted as evidence. It can be admitted as evidence only on the payment of a penalty, usually ten times the amount of the proper duty applicable on the same. Similar event occurred in the case of Thiruvengadam Pillai v. Navaneethammal (2008), where an instrument without a stamp is prohibited to be received as evidence. Under Section 40 of the Act, an admitted instrument cannot be questioned on the grounds of improper stamping, except as per Section 62 of the Act, which deals with the decision of the Court in regards to stamping of an instrument.

Section 42 of the Act provides procedures on how to deal with the impounded instrument. After paying the penalty to recover the instrument from impounding, the person shall send to the Collector an authorised copy of such instrument, with a proof of penalty and a certificate in writing to make the instrument legally valid. Section 45 of the Act provides conditions on releasing an instrument from impound. The person, within one year from the date of execution, has to send in writing to the Collector and should be willing to pay the proper duty, accepting the error caused in payment of duty. Under Section 46 of the Act, the Collector on proper inspection, can endorse such a request, thereby making the instrument legally admissible. While calculating the penalty, the Collector should take account of all the circumstances including the financial status of the person concerned, as cited in the case of Peteti Subba Rao v. Anumala S. Narendra (2002).

The penalty paid for not duly stamping an instrument can be reclaimed in certain cases. When the amount was bound to be paid by some other person, the penalty can be recovered from such a person under Section 48(1) of the Act or through a court order under Section 48(3). The Chief Controlling Revenue Authority has the power to refund such a penalty if the application is made in writing by the party within one year from the date of payment. Under Section 49 of the Act, if there is a loss or damage to the instrument, when sending it to the Collector for inspection, the person sending it is not liable. A copy of such an instrument that is damaged in the transit can be considered as original thereafter under Section 50 of the Act. Apart from this recovery, all penalties paid under this Act can be recovered as arrear of land revenue under Section 51 of the Act.

Allowances for stamps

Section 52 of the Act grants power to the Collector to make allowances to the spoiled stamps, if there is error in writing, if the document is not signed or executed, if found unfit for use to be void ab initio or if the person is dead before executing the instrument. Spoiled nature also  comprises deficient value, becomes useless in the course of transaction or spoiled by design. Section 53 of the Act allows application of allowance within two months of the date of execution of the instrument if the stamp is spoiled because of the refusal or non acceptance by the parties, within six months from the date of spoil when no instrument is executed in the stamped paper and if the instrument is executed , then the period is six months from the date of execution. Section 54 of the Act empowers the Collector to grant allowance for the spoiled stamp, if the person inadvertently used a stamp of lower or higher value or rendered useless under Section 13 or 15. If the allowance is made, the Collector gives another stamp of the same value and description to the person under Section 55 of the Act. If a person possesses a stamp, after making a valid, legal purchase and found it to be spoiled then the Collector shall repay such person with the value of the stamp, deducting ten paise for each rupee under Section 56 of the Act. In the case of Gajadhar Lal Agarwal v. State of Uttar Pradesh (1943), it was held that the limit of six months is to claim the money back for the stamps for which there is no immediate use, but not for usage of the stamp.

Reference and Revision

Sub-section (2) of Section 57 of the Act allows the Collector to refer the issue to the Chief Controlling Revenue Authority if he feels doubtful regarding the amount of duty chargeable. After consideration, the Chief Controlling Revenue Authority shall assess the case and send the decision to the Collector. Similarly Chief Controlling Revenue Authority can also be referred to by the High Court of Madras, provided that a three judge panel makes such a decision under Section 58 of the Act. According to the judgement of the case of Manganti Suryanarayana v. Board of revenue (1976), it was held that the Inspector General of Registration or the Chief Controlling Revenue Authority is the final fact finding authority for the court while hearing a reference. Under Section 59 of the Act, if the High Court is not satisfied with the statement of the Authority, it can send it back to the Authority, to add alterations. Any Court other than the High Court can also make reference to the Authority under Section 61 of the Act. 

Under Section 62 of the Act when a decision regarding stamping, payment of duty or penalty comes under the purview of the court, then the Court of first mention can make such decision or revision. The order of the Court is sent to the Collector, who in turn impounds the instrument in contention and prosecutes any person for offence against the Stamp law. However, the prosecution can only be initiated for evading payment of proper duty. In the case of Gurunanak Medical and Surgical Agencies v. Sitaram Shivhare (2011), it was held that when a document is admitted by the trial court, then the appellate court cannot reject the document from using it as evidence.

Criminal offences and Procedures

Section 63 of the Act penalises a person other than a witness who signs an instrument that is not duly stamped with a fine which may extend up to five thousand rupees. However, if a penalty is paid already on the instrument, then the amount paid as penalty is deducted from the fine that may be imposed on the same instrument under the same section. The same penalty applies for the company issuing a share warrant which is not duly stamped. The penal provisions under the Act are held constitutionally valid by the judgement of Kamala Mills Ltd v. State of Bombay (1965). Any person who  fails to cancel an adhesive stamp as prescribed by Section 12 of the Act, is punishable with a fine of five hundred rupees under Section 64 of the Act. Any person who fails to pay the differential duty under Section 20 of the Act, is punishable with a fine of five hundred rupees under Section 65 of the Act. Any person trying to defraud the Government  is penalised with a simple imprisonment of up to one year or  with a fine of five thousand rupees under Section 66 of the Act. An unauthorised sale of stamps shall be penalised with imprisonment of up to six months or with a fine up to five thousand rupees or both under Section 68 of the Act. The place of trial of such offences under Section 70 of the Act is fixed at the district or metropolitan area where the instrument is executed. In the case of Brojedra Nath v. Emperor (1918) it was held that mere non-payment of duty does not attract punishment under Section 64 of the Act, rather the intention to defraud the Government has to be proved by the prosecution. 

Section 71 of the Act mandates that all public officers who hold records of duty, should always make the records available for inspection to the person as authorised in writing  by the Collector. In the case of District Registrar and Collector v. Canara Bank (2005), it was held that the inspection is ordered when it may lead to securing any duty or it may tend to prove any fraud or it may lead to any discovery related to fraud. Power to make any rules or change any rules in relation to stamps and recovery of finance lies with the State Government under Section 72 of the Act. It was held in the case of Eswara Pillai v. State of Tamil Nadu (1972), when the rules made are in contravention to the Law, they are not binding on the parties or the officers associated.

Prevailing stamp duty charges under the Act

The duty and charges that are levied under the provisions of the Act are detailed in the Schedule 1 of the Act.  Each instrument is specified with a stamp duty and regular revisions are made by the means of Amendment to the Act. These charges are levied according to the levying under Section 3 of the Act.

S.No	Article	Description of the Instrument	Stamp Duty
1	Article 1	Acknowledgement of a debt	One rupee
2	Article 2	Administration bond	Four rupees for every one hundred rupees, to a maximum of five thousand rupees
3	Article 3	Adoption deed	One thousand rupees*
4	Article 4	Affidavit, including affirmation or declaration	Two hundred rupees*
5	Article 5(a)	Sale of bill of exchange	One rupee for every ten thousand rupees to a maximum of one hundred rupees
	Article 5(b)	Purchase or sale of Government security	Thirty paise for every ten thousand rupees to a maximum of fifty rupees
	Article 5(c)(i)	Purchase or sale of shares, stocks, scrips, bonds or debentures or any marketable security between the members of stock exchange	Fifteen paise for every two thousand five hundred rupees
	Article 5(c)(ii)	Between others	Fifty paise for every two thousand five hundred rupees
	Article 5(d)	Purchase or sale of un-ginned cotton	Thirty paise for every unit (One unit ~ Four thousand five hundred kilograms)
	Article 5(e)	Purchase or sale of bullion	i) Ten paise for every kilogram of silverii) Fifty paise for every kilogram of goldiii) One rupee for every unit of 250 sovereign
	Article 5(f)	Purchase or sale of oil seeds	Fifty paise for every unit of 25 metric tons
	Article 5(g)	Purchase or sale of yarn, non-mineral oil or spices	Ten paise for every Two thousand five hundred rupees
	Article 5(h)	Purchase or sale of Hydro sulphite of Soda	Ten paise for every two thousand five hundred rupees
	Article 5(i)	Building construction	One rupee for every hundred rupees of the proposed cost of construction or that is specified in the agreement
	Article 5(j)	If not provided	Two hundred rupees*
6	Article 6(1)	Agreement related to title deed	Five rupees per thousand rupees
	Article 6(2)	Agreement related to pawn or pledge	i) Term is more than  three months then five rupees per thousand rupeesii) Term is less than three months then two rupees per thousand rupees
7	Article 7	Appointment in execution of power	One hundred rupees
8	Article 8	Appraisal or valuation	i)Amount less than thousand rupees then it is same as Bottomry bondii)otherwise forty rupees
9	Article 9	Apprenticeship deed	Twenty rupees
10	Article 10	Articles of association of a company	Five hundred rupees on every ten lakh rupees to a maximum of five lakh rupees
11	Article 12(a)	Award for the value of property not exceeding one thousand rupees	Same as bottomry bond
	Article 12(b)	Value greater than one thousand but less than five thousand rupees	Fifty rupees
12	Article 13b(i)	Bill of exchange payable not more than three months	i) Amount  does not exceed five hundred rupees – Thirty paiseii) Amount between five hundred and one thousand – Sixty paiseiii)  For every additional one thousand rupees – Sixty paise
	Article 13b(ii)	Payable between three months to six months	i) Amount less than five hundred – Sixty paiseii) Amount between five hundred and one thousand – One rupee twenty paiseiii) Amount exceeding one thousand – One rupee twenty paise for every thousand rupees
	Article 13b(iii)	Payable between six months to nine months	i) Amount less than five hundred rupees – Ninety paiseii) Amount between five hundred and one thousand rupees – One rupee eighty paiseiii) Amount exceeding thousand rupees- One rupee eighty paise for every one thousand rupees
	Article 13b(iv)	Payable between nine months to one year	i) Amount less than five hundred rupees – One rupee twenty five paiseii) Amount between five hundred and one thousand rupees – Two rupee fifty paiseiii) Amount exceeding one thousand rupees – Two rupee fifty paise for every thousand rupees
	Article 13c	Payable more than one year	i) Amount less than five hundred rupees – Two rupee fifty paiseii) Amount between five hundred and one thousand rupees – Five rupeesiii) Amount exceeding one thousand rupees – Five rupees for every thousand rupees
13	Article 14	Bill of Lading	One rupees
14	Article 15	Bond
		Amount less than Ten rupees	Fifty paise
		Amount between Ten and Fifty rupees	One rupee
		Amount between Fifty and One hundred rupees	Two rupees
		Amount between One hundred and Two hundred rupees	Four rupees
		Amount between Two hundred and Three hundred rupees	Six rupees
		Amount between Three hundred and Four hundred rupees	Eight rupees
		Amount between Four hundred and Five hundred rupees	Ten rupees
		Amount between Five hundred and Six hundred rupees	Fifteen rupees
		Amount between Six hundred and Seven hundred rupees	Seventeen rupees
		Amount between Seven hundred and Eight hundred rupees	Twenty rupees
		Amount between Eight hundred and Nine hundred rupees	Twenty two rupees and fifty paise
		Amount between Nine hundred and one thousand rupees	Twenty five rupees
		Amount exceeding One thousand rupees	Twelve rupees for every exceeding five hundred rupees
15	Article 16	Bottomry bond	i) Amount between one hundred and one thousand – Four rupeesii) Amount exceeding one thousand rupees – Twenty rupees for every exceeding five hundred rupees
16	Article 17	Cancellation	One thousand rupees*
17	Article 18	Certificate of Sale provided in public auction	i) Amount not exceeding Ten rupees – One rupeesii)  Amount between Ten and twenty five rupees – Two rupeesiii) Amount between Twenty five and Fifty rupees – Three rupeesiv) Other cases – Same duty as conveyance
18	Article 19	Certificate or other document	One rupees
19	Article 20	Charter party	Ten rupees
20	Article 20A	Chit agreement	Ten rupees
21	Article 22	Composition Deed	Sixty rupees
22	Article 23	Conveyance	Five rupees for every one hundred rupees
23	Article 24	Copy or Extract	One hundred rupees
24	Article 25	Counterpart or Duplicate	i) Same duty as original if the original is chargeable not exceeding five rupeesii) Other cases – Five hundred rupees
25	Article 26	Custom bond	i) Amount not exceeding one thousand rupees – duty same as bottomry bondii) Other cases – Forty rupees
26	Article 27	Debentures	i) Issuance – 0.005%ii) Transfer or Re-issue – 0.0001%
27	Article 28	Delivery order in respect of goods	One rupees
28	Article 29	Divorce	Twenty five rupees
29	Article 30	Entry as an Advocate in Advocates Roll of Madras High Court	i)Advocate – Six hundred and twenty five rupeesii) Previously enrolled in other courts – Three hundred and twelve rupees fifty paiseiii) Attorney – three hundred and twelve rupees fifty paise
30	Article 31	Exchange of Property	Same as conveyance
31	Article 32	Further change	i) Same as conveyance when original mortgage is describedii) When possession is not given then its same as Bottomry bond
32	Article 33	Gift	Same as conveyance
33	Article 34	Indemnity	Same as Security bond
34	Article 35	Lease (advance or security deposit whether repayable or not)*	i) Period less than thirty years – One rupee for every one hundred rupees ii) Period between thirty and ninety nine years – Four rupees for every one hundred rupeesiii) Period above ninety nine years – Seven rupees for every one hundred rupees
35	Article 36	Letter of allotment of shares	One rupee
36	Article 37	Letter of credit	One rupee
37	Article 38	Letter of licence	Sixty rupees
38	Article 39	Memorandum of Association of a company	i) If accompanied by Articles of Association – Two hundred rupeesii) If not accompanied – Five hundred rupees
39	Article 40	Mortgage Deed	i) When possession is given – Same as Conveyanceii) When possession is not given – Same as Bottomry bondiii) when collateral is duly stamped – Two rupees fifty paise
40	Article 41	Mortgage of a crop
		When the period of repayment is under three months from date of the instrument	i) Sum not exceeding two hundred rupees – Fifty paiseii) For every exceeding two hundred rupees – Fifty paise
		When the period of repayment is more than three months but not more than eighteen months from the date of the instrument	i) Sum under one hundred rupees – One rupeesii) For every exceeding one hundred rupees – One rupee
41	Article 42	Notarial Act	Ten rupees
42	Article 43	Note or Memorandum	i) Goods of value exceeding twenty rupees – One rupeeii) Security of value exceeding twenty rupees – Maximum of fifty rupees forty paise for every ten thousand rupees
43	Article 44	Note of protest by the master of a ship	Five rupees
44	Article 45	Partition	i) Among family members – One rupee for every one hundred rupeesii) In other cases – Same as bottomry bond. It shall include legal heirs of deceased family member *
45	Article 46	Partnership
	Article 46A	i) Instrument where capital does not exceed five hundred rupeesii) In other cases	Fifty rupees One thousand rupees*
	Article 46B	i) Dissolution of immovable properties not among family members ii) Dissolution among family members iii) Other cases	Seven rupees for every one hundred rupeesOne rupee for every one hundred rupeesOne hundred rupees
46	Article 47	Policy of Insurance	Drawn singly	Drawn in duplicate
	Article 47A(1)	i)Voyage premium not exceeding one -eighth percent of the amount	Five paise	Five paise
		ii) in other cases, every full sum of one thousand five hundred rupees	Five paise	Five paise
	Article 47A(2)	i) Full sum of one thousand rupees with term not exceeding six months	Ten paise	FIve paise
		ii) Term between six months and twelve months	Ten paise	Fifteen paise
	Article 47B	Fire Insurance	i) Sum not exceeding five thousand rupees – Twenty five paiseii) Other cases – five paise
	Article 47C	Accident and Sickness Insurance	i) Railway accidents – Five paiseii) Other cases – Ten paiseiii) Insurance against death , with premium payable does not exceed two rupees fifty paise per thousand rupees – five paise
	Article 47CC	Insurance by indemnity	Five paise
	Article 47D	Life or Group Insurance	Drawn singly	Drawn in duplicate
		i) Sum insured not exceeding two hundred and fifty rupees	Ten paise	Five paise
		ii) Sum above two hundred and fifty rupees but not exceeding five hundred rupees	Ten paise	Five paise
		iii) Sum exceeding five hundred rupees and for every thousand thereafter	Twenty paise	Ten paise
	Article 47E	Reinsurance by an Insurance	One quarter of the duty but not less than fifty paise
47	Article 48	Power of attorney
		Sole purpose of securing registration	Five hundred rupees*
		Authorising a person in a transaction	Five hundred rupees*
		Authorising not more than five persons to act jointly in more than one transaction	One thousand rupees*
		Authorising more than five but not exceeding ten persons, to act jointly in one transaction	One thousand rupees*
		Authorising attorney to sell any immovable property	Same as Conveyance for the market value*
		Attorney who is a family member, authorised to sell immovable property	One thousand rupees*
		When attorney is not a family member	One rupee for every one thousand rupees*
		Other cases	One thousand rupees for each person*
48	Article 49	Promissory note
		When payable on demand	i) Amount less than two hundred and fifty rupees – Five paiseii) Amount between two hundred and fifty and One thousand rupees – Ten paiseiii) Other cases –  Fifteen paise
		Payable otherwise than demand	Same as Bill of Exchange
49	Article 50	Protest of Bill or Note	Ten rupees
50	Article 51	Protest by the Master of a Ship	Ten rupees
51	Article 52	Proxy	Fifteen paise
52	Article 53	Receipt	One rupee
53	Article 54	Reconveyance of Mortgaged property
		Value not exceeding One thousand rupees	Same duty as Conveyance
		Other cases	One thousand rupees*
54	Article 55 A	Release – One rupee(Includes legal heirs of a deceased family member)*	B) i) Release of Binami rights – One rupee for every one hundred rupeesii) Immovable property – Eight rupees for every one hundred rupeesiii) other property – Seven rupees for every one hundred rupees
	Article 55C	Release of right in favour of co-owner	i) Immovable property – Eight rupees for every one hundred rupeesii) Other properties – Seven rupees for every one hundred rupees
	Article 55D	Release of right in favour of partner	i)Between family members – Three rupees for every hundred rupeesii) Not between family members – Eight rupees for every hundred rupees
55	Article 56	Respondentia Bond	Same as Bottomry bond
	Article 56A	Securities other than Debentures
		Issuance	0.005%
		Transfer on delivery basis	0.015%
		Transfer on non delivery basis	0.003%
		d)i) Derivatives future	0.002%
		ii) Derivatives options	0.003%
		iii) Currency and interest rates	0.0001%
		iv) Other derivatives	0.002%
		e) Government securities	0%
		f) Repo on corporate bonds	0.00001%
56	Article 57	Security Bond or Mortgage Deed	i) Amount not exceeding one thousand rupees – Same as Bottomry bondii) Other cases – Five hundred rupees*
57	Article 58a	Instrument of dower
		i) Settlement in favour of members of family	One rupee for every one hundred rupees
		ii) Other cases	A)Immovable property – Eight rupees for every Hundred rupeesC) Other property – Seven rupees for every one hundred rupees
	Article 58b	Revocation	Same as Bottomry Bond to the maximum of One thousand rupees*
58	Article 59	Share warrants	Nine rupees for every one hundred rupees
59	Article 60	Shipping order	One rupee
60	Article 61	Surrender of lease	i) Duty not exceeding thirty rupees – duty chargeableii) Other cases – One thousand rupees*
61	Article 62	Transfer
		c)i) Mortgage deed, duty not exceeding forty rupees  ii) Other cases	Duty chargeable Forty rupees
		Property under Administrator General Act, 1963	Fifty rupees
		Trust property between trustees	One thousand rupees*
62	Article 63	Transfer of lease	Same as conveyance
63	Article 64	Trust
		Declaration	Same as Bottomry bond not exceeding One thousand rupees*
		Revocation	Same as Bottomry bond not exceeding One thousand rupees*
64	Article 65	Warrant for goods	Five rupees

* Amended upon the Indian Stamp(Tamil Nadu Amendment) Act, 2023

Tamil Nadu Stamp Rules

Under Section 76-A of the Indian Stamp Act, 1899 certain rules were formulated for the custody, sale, distribution of stamps, appointment of ex-officio stamp vendors, licensed vendors etc. Section 74 of the Indian Stamp Act, 1899 empowers the Chief Controlling Revenue Authority through the Board of Revenue to make such rules.

Rule 1: These rules are hereby called the Tamil Nadu Stamp Rules.

Rule 2: These rules apply to all non-judicial stamps. The Non-judicial stamps include postal stamps, match excise banners, revenue stamps, stamp paper etc.

Rule 3: Definition clause for terms including Act, State, Superintendent of Stamps.

Rule 4: A General Stamp office is constituted in Chennai under the charge of the Superintendent of Stamps. The duties of the office are to maintain a stock of adhesive stamps and non-postal stamps. The stock should be not less than the probable requirement for usage in treasuries for next four months.

Rule 5: The Assistant Superintendent of Stamps, Chennai will be in charge of the stamp depot. He is entitled to maintain stock of stamps as mentioned in Rule 2, for the next one year. In addition to that a reserve stock, required for the next four months should also be maintained.

Rule 6: The Assistant Superintendent of Stamps is responsible for counting or supervising the counting of the stamps on receipt from the Controller of Stamps. He is also responsible for the entities made in the stock books after verifying the stamps to the invoices.

Rule 7:  Stamps that are found to be unfit for use shall be sent to the Controller of Stamps for free replacement. When the stamps are found unfit for use owing to reasons other than faulty manufacture are disposed of according to the rules prescribed.  

Rule 8: Every district treasury shall be a depot for the storage and sale of non judicial stamps. They are required to maintain a stock not less than probable consumption for next four months in addition to the stock required.

Rule 9: When the stocks run low in any depot before the receipt from Central Stamp Store, the officer in charge of the depot shall send a letter of indent to Superintendent of Stamps, Chennai, requesting supply from the nearby depot. However, when the depot is located in the neighbouring State, then that transfer requires special orders from both the State Governments. On receipt of such a letter of indent, the Superintendent of Stamps shall inform it to the Board of Revenue, Chennai. 

Rule 10: As soon as the supply arrives from the Central Stamp Store, the officer incharge of the depot shall personally examine each box for any external damages. He is mandated to open and count the packets of stamps of higher denominations, which is higher than Twenty five rupees. In case of smaller denominations only ten percent of the boxes are allowed to be opened. The boxes and individual packets should be placed in a strong room, and each box should be opened one at the time under the supervision of the officer. The officer in charge will be responsible for verifying the value, number and signature on the supply. The wrappers containing the stamps should be preserved until the whole supply is accounted for and verified.

Rule 11: The officer in charge of the local depot should send a report to the Controller of Stamps, if the stamps supplied were found in excess or less than the requisite. All details of such a differential should be properly accounted for in the stock book.

Rule 12: When stamps are found unfit for use, due to manufacturing fault, then such stamps are sent to the Controller of Stamps, Nasik Road for replacement free of cost. When Stamps are found unfit for use, owing other than manufacturing fault, then if the value is under three hundred rupees, such stamps are destroyed by the order of Collector or District Revenue Officer. If the value of unfit stamps exceeds three hundred rupees then their destruction requires permission from the Board of Revenue. When the value exceeds One thousand rupees, then the order of full Board is required in writing, to destroy them.

Rule 13: When a loss is incurred by the State Government due to the actions of a Government servant, then pecuniary actions can be taken against him, along with other actions as prescribed by Article 300(3) of the Tamil NAdu Financial Code, Volume 1.

Rule 14: All Stamps that are found spoiled, unused or cancelled according to the Act, shall be destroyed monthly by the officer in charge of the local depot. The unused stamps received from the public or from sub depots shall be dealt with as per the instructions of the Collector or District Revenue Officer. Those stamps shall be re-issued, issued or destroyed.

Rule 15: Stamps that are available in the local depot, with no real time demand, shall be reported to the Superintendent of Stamps, Chennai, who in turn shall make arrangements to send those stamps to depots, where there is a demand. If such transfer is not possible, then the stamps are destroyed as per the provisions of the Act. 

Rule 16: The stamps that are to be destroyed should be properly registered in the books of record. Those entries should be verified by the officer in charge before the stamps are actually burnt in presence of the Treasury Officer. A certificate shall be issued verifying the details and value of the stamps that were burnt. This certificate shall be sent to the Accountant General, Chennai on or before 6th of every month.

Rule 17: The entries of destruction shall be maintained in Monthly plus and minus memoranda, stock register and monthly accounts of local depot. A copy of the entries  should be sent to the Accountant General, Chennai and the Superintendent of Stamps, Chennai. Any discrepancies in the records should be communicated to the Accountant General, Chennai. 

Rule 18: The value of the double lock stored stamps along with the denomination has to be noted in the register. The officer in charge of the depot should verify the entries and make calculations to verify the values. The register shall be placed along the stamps in the double lock receptacles. It is not allowed to remove the register once it is stored. The stamps should be placed face to face  and never back to back, in a properly dry environment. For the calculation of values, either manual multiplication or pre-mandated tables can be used. It is sufficient to verify ten percent of the total stock by the officer in charge.

Rule 19: The appointment of the treasurer, who is an ex-officio vendor shall be made by the Board of Revenue or the State Government. The Ex-officio vendors are licensed by the Collector or the District Revenue Officer to be a vendor of stamps. The vendors are only permitted to sell the stamps entrusted to them to the public. No sale can be made from the double locked storage.

Rule 20: The Treasury Officer is entitled to take the stamps and register out of the double lock to meet the demand and again properly place the register along the stamp in the double lock. It is mandatory to check the records every time the stamps are taken out from the double lock and placed back in. A fortnightly check is made by the officer in charge on the balance of stamps. The Sub Treasury Officer I should make the mandatory check of the balance of stamps with the Sub Treasury Officer II, once a month instead of twice a month as mentioned in Rule 20.

Rule 21: The ex-officio vendor shall sell the stamps to the public and other licensed vendors. The value of sold stamps can be remitted from the treasury and need not be paid in cash to the ex-officio vendor. The ex-officio vendor shall make entries in the register regarding the sale and the value of sale in English language.

Rule 22: The details regarding the quantity of sale and value of stamps sold shall be inspected by the officer in charge of the depot. The report prepared, thus, should be submitted to the Treasury officer, on the first of every month. Counter-signature should be sought from the Treasury officer for such records. 

Rule 23: When an indent or cheque is presented to the ex-officio vendor requesting stamps, the indent is allowed to pass through only after the money is paid into the treasury.

Rule 24: 

1. When the ex-officio vendor sells stamps to a non- licensed vendor, the details like date of sale, the name, the residence of the purchaser shall be written on the face of the stamp paper, below the impression of serial number. If the purchase is made by the person other than the person who intends to use it, the name , value and residence of the purchaser should be written in their own words by the purchase along with the ordinary signature. If a person makes any false endorsements, then he shall be punished under the Indian Penal Code, 1860. For hundies, endorsement should be made in the back side of the stamp paper.
2. When the demand of a stamp is made by a person with the required value in any currency accepted by the Government, the ex-officio vendor shall without any delay deliver the stamp in his possession.
3. Any stamp held as discontinued by the authority shall not be sold by the ex-officio vendor.
4. The ex-officio vendor shall maintain the record as prescribed by the State Government and at any time shall allow the Collector or the District Revenue Officer to inspect the accounts and register.
5. On demand of the Collector or the District Revenue Officer, every ex-officio vendor shall deliver all the stamps that are in his possession.
6. The Treasury officer is mandated to provide the impressed sheet of particular value upon demand. He should provide such details in the fewest sheets possible.
7. When the demanded value is higher than the highest value which a vendor is allowed to sell, he should not attempt to sell multiple numbers of stamp sheets of the demanded value.
8. No discounts are provided for the ex-officio vendor. Certain special remuneration is allowed in rare cases.

Rule 25:

1. 1. The post of Licensed Stamp Vendor is created by the Chief Controlling Revenue Authority for the sale of stamps
   2. The place of sale of stamps along with the proper address should also be specified by the Chief Controlling Revenue Authority after creating the post of Licensed Stamp Vendor. The new places should not interfere with the existing licensed vendors.
   3. The ratio for non-licensed stamp vendors to the total population of the district should be 1:10000. While new posts are created, the existing demand and other relevant factors are to be kept in mind.
2. 1. The posts of licensed vendors are filled by the District registrars. They are responsible for granting leave, determining the place of sale, cancellation of licence and transfer of vendors to a new location. Not more than three months of leave shall be granted to a licensed vendor. If the licensed vendor is continuously absent for more than one year, then his licence is cancelled.
   2. When the post of licensed vendor falls vacant, the District Registrar shall post a notification in the notice boards of District Registrar Office, Taluk Office, Sub-Registrar Office, Village Chavadi and Panchayat Office. On the reception of application, the candidates are interviewed to find the best suitable person. 
   3. The factors considered while selecting a person as licensed vendor are locality, experience, health, education and solvency.
   4. The order of preference to select a person as a licensed vendor are
      1. Physically handicapped
      2. Adi Dravidar and Tribals
      3. Widows
      4. Ex-Servicemen
      5. *Omitted on 19th April 2000 by Notification S.R.O  C.5/2000
      6. General
3. The licence granted to any vendor shall be as per the rules mentioned and documenting of details like name, description and address are mandated. The licence granted can be revoked at any time for disobeying the rules without any valid reason. However, an opportunity has to be provided to the vendor to validate his reasons.
4. 1. The Inspector of Registration shall not intervene with the appointments made by the District Registrar, unless the person is absolutely unsuitable for the post. A person aggrieved by the order can appeal to the Inspector of Registration within 30 days of order. The second appeal can be made before the Deputy Inspector General of Registration within 90 days of the order. However, a delay in appeal can be atoned for a valid reason.
   2. The Inspector General of Registration in accordance with the order passed by the Deputy Inspector General of Registration, within 90 days, shall call for records associated with the order. If he deems the order to be fit and in the absence of any appeal, can validate the order and let the legal actions proceed.
   3. No order shall be passed without giving proper opportunity for the aggrieved person to represent.
   4. On appeal, the order passed by the subordinate officer shall be kept suspended.
5. 1. The Licensed vendor shall sell the stamps as prescribed in the rules and only within the geographical limit of the State of Tamil Nadu.
   2. The Licensed vendor should have sufficient stock of stamps as prescribed by the rules and should also be empowered to collect the stamps from the sub-treasury through indent.

Judicial pronouncements 

R. Mahalakshmi v. The Sub-Registrar, Royapuram, Chennai (2014)

The facts of the above-mentioned case are such that a sale deed was registered by the petitioner on 6th August, 2013 in the office of Sub-Registrar, Royapuram, Chennai, who was the first respondent. The document number of the registered sale deed was no. 2309 of 2013 in Book 1. However, a notice was issued by the Special Deputy Collector, who was the second respondent, under Rule 4 of the Tamil Nadu Stamp (Prevention of Under Valuation of Instruments) Rules,1968. According to Rule 4, on reference under Sub-section (1) of Section 47A of the Indian Stamp Act,1899 from a registering officer, the Collector or the competent authority should send a notice in Form 1 of the Rules to every person concerned to the registered instrument. Through this Rule, the Collector can enquire any person concerned with the instrument, ask for the market value of the property, examine records, inspect the property and pass the order according to the findings of the proceeding. The Collector is mandated to send such notice within fifteen days from the date of receipt of the reference. Also, he can demand the production of evidence related to the instrument within twenty one days of the service of notice. 

The petitioner challenging the impugned order issued by the second respondent, filed a Certiorarified Mandamus writ under Article 226 of the Indian Constitution before the Honourable High Court of Madras to call for records connected to the order by second respondent and quash the orders issued. The petitioner was represented by counsel  Mr. Manohar and the respondents were represented by counsel Mr. R. Vijayakumar. After hearing the arguments, the learned Judge suggested that the proper response from the petitioner side in this case would be to file an objection, participate in the enquiry and await the order. Owing to such reasons, the writ petition was dismissed and the competent authority was commanded to finish the enquiry within four weeks and pass an apt order. 

Ravi @ K.N. Annamalai v. The Chief Controlling Revenue Authority, Chennai (2021)

In this case, the appellant registered a sale deed on fifteenth of May, 2013. A sale agreement was also registered between the parties. The Special Deputy Collector (Stamps) determined the market value of the property as Twelve Lakh rupees. The first respondent (The Inspector General of Registration, Chennai) initiated a suo-moto revision under the Section 47A(6) of the Indian Stamps Act, 1899. The reasons quoted for the revision were wrong calculation of market value, not considering the circumstances of the locality of the property. The first respondent was also of the view that the Special Deputy Collector made an erroneous decision in fixing the market value. This made the appellant to file a Civil Miscellaneous Petition under Section 47A(10) read with Rule 9(5) of Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules,1968 against the order of the first respondent. The learned counsel for the appellant Mr. Suresh argued that the market value fixed by the first respondent has no documents to support it and no proper communication was provided to defend themselves. The appellant contended that the procedures followed were not in accordance with the Statutes and Rules. The Respondent was represented by the Special Government Pleader Mr. T.M Pappiah, who disputed the arguments citing various reasons. The said property was mentioned as agricultural land. However,  there was no agricultural activity that was going on in the property. The location of the property was paramount in determining the market value. This property was located 5 kilometres from the Villupuram bus stand, in the Villupuram Chennai Highway. Keeping in mind the locality and commercial nature of the property, it was a mistake made by the Special Deputy Collector to quote the market value as 12 Lakhs, though the agricultural lands in that area were sold at around 35 lakhs. This made the first respondent to initiate a revision and revise the market value. This was done under the authority provided by Section 47A(6) of the act and no provisions were bypassed. 

Hearing the arguments from both the sides, the High Court took a view that it does not have any scope in determining the market value, as it is the function of the expert body, rather, the court can only determine whether the procedures as dictated by the Statutes and Rules are followed properly. The court referred to the Stamp duty as the revenue of the State, which is the source of all the welfare activities carried out and the social schemes implemented. Thus, it is mandatory for the public servants to give utmost importance in collection of State’s revenue. The court took cognizance of the fact that a sale agreement was registered before the Sub-Registrar after the sale deed, in which the property value was mentioned as Rs. 76,50,000. Whereas, the market value as determined by the Special Deputy Collector was Rs. 12,00,000 in the registration of sale deed. This is highly contradictory and unacceptable in the view of the court. The first respondent after revision quoted the market value as Rs. 51,00,000, which is less than the amount quoted by the appellant in the sale agreement. 

The court held that proper opportunity was provided to the appellant to show their defence against the order of the first respondent and the first respondent acted upon the authority provided to him by the Statute. Another contention regarding not following Rule 5 of the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968 was also set aside by the court, quoting that the authority concerned should take into consideration all the circumstances as mentioned in the Rules to determine the value of the property. The Court also ordered the State to formulate “Anti Corruption Special Cells” in every department to look for any erroneous decisions made by the authorities to acquire illegal financial benefits. The court gave guidelines on how mis-conduct and mis-appropriation by the authorities have to be dealt with. Thus, taking all these views into consideration, the court dismissed the petition. 

Tata Coffee Limited v. The State of Tamil Nadu (2018)

In this case, writ appeals were made against the order of the single judge dated 03, November, 2007. The appellant of this case was Tata Coffee Limited represented by the learned counsel Mr. A.L. Somayaji. The respondents were the State Government of Tamil Nadu, The Sub-Registrar, Anamalai, the District Revenue Officer (Stamps), Coimbatore and Tata Tea Limited. The first three respondents were represented by the Advocate General Mr. N. Vijay Narayan and the fourth respondent is represented by the learned counsel Mr. Joy Joseph. The facts of the case were, the appellant is a subsidiary to the fourth respondent. Due to consistent losses, the subsidiary was decided to be sold in 2005. The properties included 4 tea estates in Anamalai, Coimbatore and 3 tea estates in Kerala, encompassing a total of 9873.86 acres of land. As argued by the appellant, a stamp duty of Rs. 3,20,64,000 and a registration fee of Rs. 40,08,000 was paid to register a sale deed in the concerned Sub-Registrar office. The Sub-Registrar was not satisfied with the determination of market value, hence withheld the registration and referred the matter to the third respondent  under Section 47A of the Indian Stamp Act, 1899. The writ petition was filed in 2007 challenging the order of the second respondent, which was allowed and the order was set aside by the learned Judge. The second appeal is made to the bench  of Justice Huluvadi Ramesh and Justice K.Kalyanasundaram. The appellant argued that the reference by the second respondent was made without stating any reasons and it would be of no value if the order is pursued further. However, the Advocate General argued that Section 47A of the Act contains provisions which should be looked upon when the decision of reference is made. It relates to undervaluation of instruments of conveyance and the methods to deal with it. The market value assessed by the Sub-Registrar was Rs. 237,67,11,018, whereas the stamp duty was paid for Rs. 40,08,00,000. There was a difference of Rs. 197,59,11,018, which is very huge and gives every probable reason for the third respondent to pass a revision order. 

It was held by the court that the second respondent had every reason to refer the matter to the third respondent. According to Rule 3(3) of the Tamil Nadu Stamp (Prevention of Undervaluation Of Instruments) Rules, 1968, the registering officer can make necessary enquiry and inspect documents to determine the true market value of the property. The Court concluded that the order passed by the second respondent  satisfied the procedure and Statutes. The Court also directed the third respondent to pass appropriate orders within three months from the date of service of judgement.

Vasantha Vellaisami v. Vivek Sivagiri (2021)

This is the case concerning a Civil Revision Petition filed under Article 227 of the Indian Constitution to set aside the impugned order of the Assistant City Civil Court, Chennai. The case came before the Honourable Justice G.K Ilanthiraiyan. The petitioner was represented by learned counsel Mr. Thriyambak J. Kannan. The respondent filed a suit for declaration and injunction regarding the suit property in the city Civil Court against the petitioner of this case. The power of attorney was given to the father-in-law of the respondent, who was also the prosecution witness of the suit. The power of attorney was marked as Exhibit A1. Exhibit A1 was printed in a Hundred rupees stamp paper purchased in India but executed in the USA. However, the instrument was not presented before the Collector within three months for validating under Indian Stamp Act. Thus such an exhibit is contested to be considered as unstamped and unregistered. Under Section 35 of the Act, an instrument which is not duly stamped cannot be considered as evidence. Also, according to Tamil Nadu Stamp Act, when an instrument not duly stamped and executed outside India, is brought before a competent authority or Judge he can impound such an instrument. The impounding power is also provided under Section 33 of the Indian Stamp Act. The respondent side counsel was not present and the notice was served. 

The court after examining the provisions was of the view that any unstamped instrument is not allowed to be presented as evidence. Also, the competent authority is allowed to impound such an instrument under the powers granted to him by the Stamp Act and the Tamil Nadu Registration Act, 1908. The court ordered the concerned authority to impound the instrument and levy a penalty that is applicable. Thus, the impugned order issued by the Assistant Civil Court was set aside and the civil revision petition was allowed.

Mr. S.V.L.S. Ranga Rao v. The Secretary to the Government (2009)

This is a case, where a certiorarified mandamus writ petition was filed under Article 226 of the Indian Constitution to call for records from the respondent and quash his orders. The facts of the case were, a property belonging to one Mr. S.V. Ranga Rao, who is the grandfather of the petitioner. After his demise in 1974 he left his properties to his wife Samarla Leelavathi and his son Koteswara Rao, who were his legal heirs. The grandmother of the petitioner executed a will on her share before her death. Now, the father of the petitioner Mr. Koteswara Rao and his children became the shareholders of the property. After the death of the petitioner’s mother, Mr. Koteswara Rao married a woman named Samarla Manjula. On the death of the petitioner’s father, Samrala Manjula filed a suit of partition claiming her share of 5/32 of the property. This suit ended in compromise and the petitioner’s step mother received the 5/32nd share of the property. Few years later, out of love, the petitioner’s step mother executed a deed of release, relinquishing her rights over the property and granting the entire rights to the petitioner and his brother. This was executed in the office of the second respondent. The stamp duty paid for this registration was in accordance with Article 58 of Schedule I of the Indian Stamp (Tamil Nadu Amendment) Act, 2004. The registration fee of Rs. 2000 was paid in addition. 

The Second respondent withheld the instrument and referred it to the Collector under Section 31 and Section 47(A) of the Indian Stamp Act, 1899. Also, the petitioner was asked to pay the differential stamp duty and registration fee. It was argued by the counsel of the respondent Mr L.S.M Hasan Fizal, that the instrument executed by the stepmother cannot be considered as an instrument executed by a family member. As per the elaboration of Article 58 of the Schedule I of the act, father, mother, husband, wife, son, daughter, grandchild, adoptive father, adoptive mother, adoptive son and adoptive daughter are considered as family. There is no mention of the term “stepmother” in the elaboration of the Article. Also, the counsel argued that the second respondent had jurisdiction under Section 40(1)(b) of the act to direct parties to pay the deficit duty.

The learned counsel for the petitioner Mr. V. Srinivasa Babu, argued that the term “family” cannot be taken in a narrow sense. The relation of stepmother also comes under the vicinity of the term family. He also noted that, the second respondent has the powers to refer the matter to the Collector but not to hold the document and ask for the deficit duty to be paid. If there was a contention related to the stamp duty, the second respondent should have referred the matter to the Collector under Section 41A of the Act and left the decision to his adjudication. 

Examining all the facts and views, the court came to a conclusion that the term “family” should be construed in a broader perspective. If the relation of “adopted mother” is included under the canopy of the family, then definitely “stepmother” should also be taken into the strata. It was also noted that Stepmother is one of the Class I heirs under the Hindu Succession Act, 1956. The court set aside the orders of the second respondent and allowed the writ petition. The second respondent was also urged to return the documents to the petitioner without asking for a deficit stamp duty or registration charges within two weeks from the reception of the court order.

Conclusion

A financial statute to regulate the registration in the State is broadly governed by the Tamil Nadu Stamp Act, 2019, the Indian Stamp (Tamil Nadu Amendment) Act, 2004 and various other Rules framed according to the provisions of these legislations. Though most of the implementations are derived from the Central Act, the charging provisions are based on the Schedule of State act. More importantly, the provisions are amended periodically to match the revenue with the financial stratification. The Centre recently proposed a revamped Stamp Act in the name of the Indian Stamp Bill, 2023. The major features in the proposed bill are, to increase the penalties based on the gravity of the fault as well as the economic impact, to incorporate a system to better identify the market value of the property, to give validation to the digital credentials and its usage, to make reference and appeal with a much more quantified set of rules, to introduce new instruments and their respective charges, to identify areas of facilitation and areas of leakage in revenue collection and append it. 

However, Stamp duty being a tax that is collected and appropriated by the State, it would be apt for the states to determine the areas of concern and regulate the norms accordingly. Every State has its own financial segmentation and capabilities. The levy of charges should also be based upon it. A State like Tamil Nadu, where there is a spike in developmental and infrastructural activities, the Government should look for the opportunities to sap revenue by the means of Stamp duty. Keeping the essential services affordable, the higher spheres of registration should be charged with higher duty based on the current inflation in a transparent manner. By this way, an equitable society can be created by spearheading the governmental investments and regulating the wealth distribution. 

Frequently Asked Questions (FAQs) 

What are the allied rules associated with stamps in Tamil Nadu?

Various rules related to stamps in Tamil Nadu are:

• The Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968;
• The Tamil Nadu Stamp (Fixation of Remuneration for Licensed Stamp Vendors) Rules, 1999;
• The Tamil Nadu (Fixation of Commission to Department of Posts) Rules, 2004;
• Indian Stamp (Collection of Stamp Duty through Stock Exchange, Clearing Corporations and Depositories) Rules, 2019;
• The Tamil Nadu Town Panchayats, Third Grade Municipalities, Municipalities and Municipal Corporations (Duty on Transfer of Property) Rules, 2011; and
• The Tamil Nadu Stamp (Constitution of Valuation Committee for Estimation, Publication and Revision of Market Value Guidelines of Properties) Rules, 2010.

What is the surcharge along with stamp duty introduced in Tamil Nadu?

In accordance with  sub-section (1) of Section 175 of the Tamil Nadu Panchayats Act, 1994, the surcharge on duty imposed by the Indian Stamp Act, 1899, is levied in the State of Tamil Nadu, on instruments related to immovable properties under the jurisdiction of Village Panchayats. The surcharge is fixed by the Government of Tamil Nadu, not exceeding five percent of the amount specified in the instrument. The instruments that are leviable are

• Sale of immovable property
• Exchange of immovable property
• Gift of immovable property
• Mortgage with possession of immovable property
• Lease in perpetuity of immovable property
• Release of Benami rights in favour of persons exempted under sub-section (3) of the section 4 of the Benami Transactions (Prohibition) Act, 1988, involving immovable property
• Settlement of immovable property other than in favour of a member or members of a family

The modification to this surcharge came in the form of notification by the Rural Development Department (No. II(2)/RUL/77(e)/2003), which was published in Part -II of Section 2 of Tamil Nadu Government Gazette. By this notification, the Governor of Tamil Nadu  fixes the rate of surcharge at one percent  for every instrument of Mortgage with possession of immovable property.

References 

• https://cleartax.in/glossary/stamp-duty/
• https://www.mkgandhi.org/vinoba/anasakti/rajeshkumar.htm
• https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1997072#:~:text=Stamp%20duties%20are%20levied%20by,more%20modern%20Stamp%20Duty%20regime.
• https://prsindia.org/budgets/states/tamil-nadu-budget-analysis-2022-23
• https://corporatefinanceinstitute.com/resources/accounting/marketable-securities/
• https://www.bajajfinserv.in/what-is-debenture
• https://www.tn.gov.in/karuvoolam/stamps.htm
• https://www.karuvoolam.tn.gov.in/web/tnta/stamps