Differential stamp duty on verified copies used for Maharashtra charge registration upheld under the Bombay Stamp Act.

A verified copy of an instrument executed and stamped outside Maharashtra, when filed in Maharashtra for registration of charge and used for a matter to be done in the State, was treated as received in the State for the purposes of sections 7 and 19 of the Bombay Stamp Act, 1958, and attracted differential stamp duty to prevent avoidance of duty. The provision was also held constitutionally valid, as the levy on copies of instruments fell within the State's legislative competence on a broad construction of the relevant Seventh Schedule entry and did not amount to double taxation. The challenge to the duty demand and to section 7 therefore failed.

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Issues: (i) Whether a verified copy of a deed executed and stamped outside Maharashtra, when filed in Maharashtra for registration of charge under the Companies Act, was liable to differential stamp duty under sections 7 and 19 of the Bombay Stamp Act, 1958. (ii) Whether section 7 of the Bombay Stamp Act, 1958, insofar as it applies to copies of instruments, is constitutionally valid.

Issue (i): Whether a verified copy of a deed executed and stamped outside Maharashtra, when filed in Maharashtra for registration of charge under the Companies Act, was liable to differential stamp duty under sections 7 and 19 of the Bombay Stamp Act, 1958.

Analysis: Section 7 is a charging provision operating notwithstanding sections 4 and 6, and by legal fiction brings in section 19 where a copy of an instrument executed outside the State is received in Maharashtra for doing something there. The filing of a verified copy with the Registrar of Companies for registration of charge under section 125 of the Companies Act, 1956 amounted to receipt of the copy in the State for a matter to be done in the State. The original deeds, if received in Maharashtra, would have borne a higher duty, and the scheme prevented evasion of stamp duty by executing and stamping the original in another State and using a copy in Maharashtra.

Conclusion: The verified copies were liable to differential stamp duty under sections 7 and 19 of the Bombay Stamp Act, 1958.

Issue (ii): Whether section 7 of the Bombay Stamp Act, 1958, insofar as it applies to copies of instruments, is constitutionally valid.

Analysis: Entries in the Seventh Schedule must receive a broad and liberal construction, and ancillary or subsidiary matters fairly comprehended within the field of legislation are included. Section 7 had a direct and substantial connection with Entry 63 of List II, and its application to copies of instruments was treated as within legislative competence. The provision was aimed at preventing avoidance of duty and at levying only differential duty, not double taxation.

Conclusion: Section 7, insofar as it applies to copies of instruments, is constitutionally valid.

Final Conclusion: The challenge to the differential stamp duty demand and to the vires of section 7 failed, and the writ petitions were rejected.

Ratio Decidendi: A verified copy of an instrument executed outside Maharashtra, when received in Maharashtra for registration of charge and used for a matter to be done in the State, can be subjected to differential stamp duty under sections 7 and 19 of the Bombay Stamp Act, 1958, and such levy is constitutionally sustainable on a broad construction of the legislative entry governing stamp duties.

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