Constitutional validity of pre-reference stamp duty deposit under Section 47-A fails for arbitrariness and unreasonable burden.

The proviso to Section 47-A of the Indian Stamp Act, 1899, requiring deposit of 50% of the deficit duty before a reference to the Collector, is stated to be unconstitutional. The registering officer's role is only to make a preliminary assessment and refer disputed market value issues to the Collector, who alone determines market value and proper duty after notice and enquiry. Because registration is kept pending and no rights flow until the Collector decides, the pre-reference deposit was considered to have no rational nexus with the Act's object, to impose an unreasonable burden, and to offend equality; the proviso is therefore liable to be struck down.

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Issues: Whether the proviso to Section 47-A of the Indian Stamp Act, 1899, requiring deposit of 50% of the deficit duty as a condition precedent for reference to the Collector, is constitutional.

Analysis: The registering officer's function under Section 47-A is only to make a preliminary assessment and refer the matter to the Collector where the market value is disputed. The Collector alone determines the market value and the proper duty payable after notice and enquiry. Since the document is already kept pending registration and no rights flow from it until the Collector's decision, the statute already provides sufficient safeguard for collection of deficit duty. Requiring a pre-reference deposit of 50% of the deficit duty has no rational nexus with the object of the Act and places an unreasonable burden on the party seeking registration. The condition is therefore arbitrary and offends the guarantee of equality.

Conclusion: The proviso requiring deposit of 50% of the deficit duty as a condition for reference is unconstitutional and liable to be struck down.

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