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Issues: (i) Whether section 30A and section 10D of the Maharashtra Stamp Act, 1958 were unconstitutional for want of legislative competence or for violating Articles 14, 19(1)(g) and 300A of the Constitution of India; (ii) Whether section 89B of the Registration Act, 1908 and the impugned circular were invalid for repugnancy to section 58(f) of the Transfer of Property Act, 1882 and for exceeding legislative power.
Issue (i): Whether section 30A and section 10D of the Maharashtra Stamp Act, 1958 were unconstitutional for want of legislative competence or for violating Articles 14, 19(1)(g) and 300A of the Constitution of India.
Analysis: The levy of stamp duty is on instruments and the statute itself specifies the chargeable instruments and the proper duty. Section 30A merely shifts the initial liability for specified instruments in favour of or by financial institutions to those institutions, while preserving their right to recover the amount from the other party. The provision does not require banks to undertake adjudication of stamp liability; at most it calls for a ministerial examination of the instrument and reference to the statutory schedule. The power under section 10D is similarly limited to ensuring payment through the prescribed accounting system for specified instruments passing through the institution's system. In a taxing field the legislature has wide latitude in classification and mode of collection, and the classification of banks and financial institutions was held to have a rational nexus with expeditious revenue collection. The challenge based on Article 19(1)(g) and Article 300A also failed because no impermissible burden or deprivation was shown.
Conclusion: Section 30A and section 10D were upheld and the challenge was rejected.
Issue (ii): Whether section 89B of the Registration Act, 1908 and the impugned circular were invalid for repugnancy to section 58(f) of the Transfer of Property Act, 1882 and for exceeding legislative power.
Analysis: The amendment requiring intimation of mortgage by deposit of title deeds and giving consequences for non-compliance was read harmoniously with the Registration Act, 1908 and the Transfer of Property Act, 1882. The Court held that the provision did not abrogate substantive rights under mortgage law and that the words creating consequences for subsequent transactions had to be construed with the surrounding text and statutory scheme. The circular was not treated as establishing any constitutional infirmity in the amendment. The provision was viewed as a regulatory measure intended to protect third parties and improve transparency in property transactions.
Conclusion: Section 89B and the circular were sustained and the challenge failed.
Final Conclusion: The writ petition was rejected in full, and the impugned amendments and circular were held to be valid on the grounds examined.
Ratio Decidendi: In fiscal statutes, the legislature has wide discretion to classify persons or instruments for collection purposes, and a provision will be sustained if it is instrument-specific, has a rational nexus with revenue collection, and does not compel the affected entity to perform a quasi-judicial adjudication.
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