The lack of a fixed time limit for the adjudication of applications for proper stamp duty under the provisions of the Indian Stamp Act, 1899 has long been a cause of concern, resulting in significant delays in the stamping of instruments. However, in a recent judgment by the Delhi High Court, a crucial step has been taken to expedite the process and provide individuals with certainty regarding payable stamp duty. The Delayed Adjudication Process
Uno Mida Limited, seeking the adjudication of stamp duty applicable to a composite scheme of amalgamation, faced excessive delays. Despite the approval of the scheme by the National Company Law Tribunal, the petitioner had not been informed about the amount of stamp duty payable even after more than a year since filing the application. Similarly, Reebok India, in its application for stamp paper issuance for share certificates, experienced repeated delays from the Deputy Commissioner in issuing the necessary challans for stamp duty payment. These delays prevented Reebok India from fulfilling its obligations under the Companies Act.
The Delhi HC noted that while Section 32 of the Indian Stamp Act provides a fixed time period for bringing in documents for stamping, there is no specific time limit for the adjudication of stamp duty or informing the parties about the applicable amount. However, other statutes, such as Section 56 of the Companies Act, establish time limits for the registration of important documents like transfer of securities. Similarly, Entry 331 of Section 3 of the Delhi (Right of Citizen to Time Bound Delivery of Services) Act, 2011 sets a time limit of 15 days for the registration of various documents.
The court emphasized that the payment of stamp duty is the initial step towards the registration of important documents, which individuals and companies rely on. Therefore, the lack of a time limit for the adjudication of stamp duty is not only inconvenient but also runs contrary to public interest as it affects the state’s revenue collection.
The Delhi HC, in its judgment, mandated that the Collector of Stamps must adjudicate on the stamp duty chargeable within 30 days of the application, as per Section 31 of the Indian Stamp Act. In exceptional circumstances, this period can be extended up to a maximum of three months. Additionally, the court recommended that the Chief Secretary of the Government of National Capital Territory of Delhi (GNCTD) introduce a specific entry in the Delhi Act, 2011, to establish a reasonable time limit for the adjudication of stamp duty payable. Until such an addition is made, the timeline of 30 days will be followed.