In the case of UNO Minda Limited v Deputy Commissioner Revenue Department UNO Minda Limited (petitioner) filed a petition asking for the issuing of instructions to the Stamp Collector, who is now overseen by the Principal Secretary Revenue-cum-Divisional Commissioner, GNCTD, to determine the stamp duty due by the petitioners. Reebok India (petitioner) filed a second petition in order to obtain stamp paper for Share Certificates in accordance with an application made on January 25, 2022.
The reason for the current petitions is that even though applications for the issuing of stamp paper were submitted more than a year ago, the petitioners were not informed of the stamp duty ruling. There is no predetermined stamp duty that was set for each document, including the scheme of merger and the instrument of conversion from debentures to shares. As a result, the petitioners sought a ruling from the Collector of Stamps under Section 31 of the Stamp Act of 1899 about the stamp duty that should have been charged on the instruments.
Analysis of court decision
The Delhi High Court’s single-judge bench, led by Justice Prathiba M. Singh, ruled that the Collector of Stamps must typically determine the amount of stamp duty due and inform the parties of it within 30 days. However, the adjudication of stamp duty may be delayed for a maximum of three months from the date of application if the same entails any special circumstances.
According to Sections 31 and 32(3) of the Stamp Act of 1899, an instrument executed in India must be brought for stamping within a month, and an instrument executed outside of India must be brought for stamping within three months. There is no time limit set forth in Section 31 of the Stamp Act of 1899 for the determination of the right stamp, however. The Court further noted that a deadline would need to be adhered to by the Collector of Stamps for the said adjudication because the activities of individuals and corporations would depend on various documents and instruments of transfer and the first step would be to seek adjudication of the stamp duty under Section 31 of the Indian Stamps Act, 1899.
The Court concluded that a reasonable period of time should be set in order to give the parties some assurance regarding the amount of stamp duty that will be due. The court ordered that the stamp collector must typically decide whether stamp duty is owed and notify parties of that decision within 30 days. On the other hand, the adjudication of stamp duty may be delayed for a maximum of three months from the date of application if the same entails any complexity or special circumstances. The Court further ordered the Chief Secretary, GNCTD to take into account a particular provision in the Delhi Act, 2011 regarding the adjudication of stamp duty with a reasonable time limit being imposed so that the Collector of Stamps can follow the same.