Fiscal classification under stamp law upheld where differential treatment of powers of attorney had rational nexus to revenue protection.

Article 45(d) of Schedule 1-A of the Indian Stamp Act, 1899, as amended in Madhya Pradesh, was challenged under Article 14 for treating powers of attorney granted without consideration to close relatives differently from those granted to others. The SC held that fiscal legislation enjoys a broad presumption of constitutionality and that a classification will stand if it has intelligible differentia and a rational nexus with the statute's object. Because the provision aimed to prevent indirect transfers of immovable property through powers of attorney and to protect revenue, it was not shown to be discriminatory or irrational. The challenge therefore failed, and the provision was upheld as valid.

---

---

Issues: Whether Article 45, clause (d), of Schedule 1-A of the Indian Stamp Act, 1899, as inserted by the Madhya Pradesh amendment, was unconstitutional as violating Article 14 of the Constitution of India.

Analysis: The classification made by the impugned provision distinguished between powers of attorney granted without consideration to close relatives and those granted to persons outside that category. In fiscal legislation, a greater latitude is available to the legislature, and a statutory provision can be struck down only when a clear constitutional infirmity is shown. There is a strong presumption of constitutionality, and mere allegations of arbitrariness, irrationality, or hardship are insufficient. The impugned provision had a direct nexus with the object of the Stamp Act, namely, to prevent indirect transfers of immovable property through powers of attorney and to protect revenue. The challenge failed because the provision was neither shown to be discriminatory nor lacking a rational basis.

Conclusion: The provision was upheld as valid and not violative of Article 14.

Ratio Decidendi: In taxation matters, a legislative classification will be sustained if it has an intelligible differentia with a rational nexus to the statutory object, and a fiscal enactment cannot be invalidated merely on the ground that it is said to be arbitrary or unreasonable unless a clear constitutional violation is established.

---