Fiscal legislation and presumption of constitutionality upheld for stamp duty deposit requirement under the Indian Stamp Act.

The Supreme Court upheld the Andhra Pradesh amendment to the proviso to Section 47A of the Indian Stamp Act, 1899, which requires deposit of 50% of the deficit duty before reference to the Collector. It treated the provision as a fiscal measure aimed at preventing stamp duty evasion and ensuring prompt revenue collection, and applied the presumption of constitutionality with greater judicial deference in economic legislation. The Court also held that hardship, possible abuse in individual cases, or a potentially arbitrary demand does not invalidate the provision itself, since an unconstitutional application is distinct from an unconstitutional law. The challenge under Articles 14 and 19(1)(g) therefore failed.

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Issues: Whether the proviso to Section 47A of the Indian Stamp Act, 1899, as amended by the Andhra Pradesh amendment requiring deposit of 50% of the deficit duty before a reference to the Collector, is unconstitutional under Articles 14 and 19(1)(g) of the Constitution of India.

Analysis: The Court held that a registering officer is bound under Section 33(1) of the Indian Stamp Act, 1899 to impound an instrument not duly stamped and cannot return it merely because the party is unwilling to proceed. The amendment to Section 47A was viewed as a fiscal measure intended to plug evasion of stamp duty and secure speedy realization of revenue. The Court applied the presumption of constitutionality and reiterated that legislation, particularly in the economic and taxing field, is entitled to greater judicial deference. It also held that hardship, possible abuse in individual cases, or the possibility of an arbitrary demand in a particular case does not by itself invalidate the statute, since an unconstitutional action under a valid provision is distinct from the validity of the provision itself.

Conclusion: The proviso to Section 47A is not unconstitutional and the challenge under Articles 14 and 19(1)(g) fails.

Ratio Decidendi: A fiscal or economic statute will be upheld if its unconstitutionality is not clearly and unmistakably established, and a provision is not invalid merely because it may be capable of arbitrary application in a particular case.

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