I have seen Stamp Authorities
and Registering Officers face difficulty while deciding the nature of
instruments for the purpose of stamp duty. I decided to write a series of blog
posts to assist them and the public in general on this subject. Here is the first
part:
Mere nomenclature of an instrument is not the conclusive
proof of its nature. The nature of an instrument is to be ascertained from the
substance or real nature of the transaction recorded therein. At times, due to
lack of sufficient knowledge on the stamp laws, the nature of the instrument is
not properly decided by the Registering Officer. This results in lower
assessment of stamp duty than required by law, which is detected by the
superior officers in course of their inspections. This results in reopening the
case and all the consequent harassment for the taxpayers as well as the tax
collectors. This can be prevented by giving proper training to the officers as
well as the other staff of the Registration Department on the classification of
the instruments by the experienced officers of the department.
Based
on provisions of Stamp Act and other related Acts, the Courts of Law in India
have laid down certain features for deciding the nature of certain instruments.
Features relevant to some important instruments included in the State List are
given below:-
Bond :-
1. There must be obligation to pay
money/grain/agriculture produce;
2. It must be attested at least by
one person, except in case of conditional bond;
3. It should not be payable to
order or bearer;
4. It should itself creates the
obligation, i.e., it must not acknowledge the pre-existing liability;
5. If it happens to be conditional
bond, the obligation must stand void, if specific act is performed or not, as
the case may be;
6. The breach of the obligation
must not sound in damages.
Lease:-
1. It may be immovable property under the Indian Stamp Act, 1899 and movable or
immovable property or both under the Bombay Stamp Act;
2. Qabuliyat, granting of lease on
an application and letting of tolls are also included in the definition;
3. Exclusive possession of the
property should be transferred;
4. It should create an interest in
the property;
5. It contains terms and period;
and
6. Premium or rent (royalty) or
both.
Conveyance:-
1. It includes sale deed, decree
or order of a Court, order of Tribunal relating to amalgamation or
reconstruction of companies and other transfers;
2. It must be between living
persons;
3. It may be of movable or
immovable property or both;
4. It should not be otherwise
specifically provided for in the Schedules;
5. In case of sale deed,
consideration is a must.
Partition:-
1. It can be amongst co-owners,
joint tenants, tenants in common, co-parceners, members of H.U.F.;
2. It should bring division in
severalty;
3. Agreement to divide, final
order of partition by a revenue or civil court, award directing partition by
arbitrator and record of past partition (in selective states) is also included;
4. It may be of movable or
immovable property or both.
Please feel free to ask me
about queries on this subject.
