MANU/MH/0197/2018

IN THE HIGH COURT OF BOMBAY

Writ Petition Nos. 2519, 2488, 2534, 2194, 2280 of 1988 and 215 of 1989
Decided On: 09.01.2018
The Indian Hume Pipe Co. Ltd. and Ors. Vs. State of Maharashtra and Ors.
Hon'ble Judges/Coram:
Abhay Shreeniwas Oka and Vibha Kankanwadi, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: Santosh Bharucha and Shrey Fatterpaker i/b. D.F. &
Diwan
For Respondents/Defendant: Amit Borkar and Akshay Shinde
JUDGMENT
Abhay Shreeniwas Oka, J.
1. Writ Petition No. 2488/1988 was not on board. By consent of parties the said petition
was taken up on the board. These petitions can be disposed of by a common judgment.
One of the common challenges in these petitions is to the constitutional validity of
section 7 of the Bombay Stamp Act, 1958 (for short "the said Act"). A brief reference to
the facts of the case will be necessary.
2 . In Writ Petition No. 2519/1988, a declaration is sought that the provisions of
sections 3, 7 and 19 of the said Act to the extent to which the same seek to levy stamp
duty on the copies of the instruments executed outside the State of Maharashtra are null
and void. It is stated in the said petition that a Debenture Trust Deed dated 6th April
1987 (for short "the deed") was executed by the first petitioner company in the State of
Gujarat. The first petitioner and the State Bank of India are the parties to the said deed.
The State Bank of India is a trustee. A mortgage of the immovable properties of the first
petitioner company was made under the deed with a view to secure the issue and
allotment of the debentures of the first petitioner. As a substantial part of the
mortgaged property was situated in the State of Gujarat, the deed was executed in the
State of Gujarat and was stamped as per the law prevailing in the State of Gujarat (the
Bombay Stamp Act, 1958-as applicable to the State of Gujarat). As the registered office
of the first petitioner company is situated in Mumbai, the charge of mortgage was
required to be registered with the Registrar of Companies in Mumbai pursuant to the
provisions of the Companies Act, 1956 (for short "Companies Act"). In response to the
query made by the second respondent- the Superintendent of Stamps, the petitioners
contended that the said original deed is not received in the State of Maharashtra. A
demand in the sum of Rs. 3,66,220/- was made by the second respondent being the
difference between the stamp duty payable on the said deed in the State of Maharashtra
and the stamp duty paid in the State of Gujarat which is the subject matter of challenge
in the petition.
3. In Writ Petition No. 2488/1988, a similar deed was executed by the first petitioner-
company in the State of Gujarat. Stamp duty was paid and it was registered in the State
of Gujarat. A copy of the said deed was filed with the Registrar of Companies in Mumbai
for registering the charge as the registered office of the first petitioner is in the State of
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Maharashtra. A demand for the difference in the stamp duty payable in the State of
Maharashtra and the stamp duty paid in the State of Gujarat was made by the second
respondent. That is how this writ petition is filed challenging the demand. Even in this
petition, there is a challenge to the constitutional validity of the relevant provisions of
the said Act in so far as they permit levy and recovery of stamp duty in respect of
copies of instruments.
4 . In Writ Petition No. 2534/1988, a similar deed was executed and registered in the
State of Gujarat. A copy of the said deed was filed in the office of the Registrar of
Companies in Mumbai for registration of charge as the registered office of the first
petitioner is in Mumbai. Even in this case, a demand is made by the second respondent
for payment of differential duty. The demand is for payment of difference between the
duty payable on the said deed in the State of Maharashtra and duty paid in the State of
Gujarat. In the petition, there is a challenge to the demand and, in the alternative, to
the constitutional validity of the provisions of the said Act as in other petitions.
5 . In Writ Petition No. 2194/1988, none has appeared for the petitioners for pressing
the petition on merits. However, we find that the challenge is similar as in the other
petitions.
6. In Writ Petition No. 2280/1988, a similar deed was executed by the first petitioner-
company in the State of Gujarat. Stamp duty was paid and the deed was registered in
the State of Gujarat as in other cases. A verified copy of the said deed was filed with
the office of the Registrar of Companies at Mumbai pursuant to the provisions of the
Companies Act for the purpose of registration of charge as the registered office of the
first petitioner is in Mumbai. In this petition, the challenge is to the similar demand of
difference in the duty. A prayer is made in the petition for making a reference under
section 54 of the said Act on the question whether any stamp duty is payable in the
State of Maharashtra on the copy of the deed which is registered in the State of Gujarat.
There is similar challenge in Writ Petition No. 215/1989.
7. Earlier, these petitions were heard on merits and were dismissed by a judgment and
order dated 9th September 1998. The Apex Court by judgment and order dated 2nd
March 2005 remanded the matters to this Court. The main ground on which the remand
order was passed is that the challenge to the constitutional validity of section 7 of the
said Act was not at all considered on merits.
8 . With a view to appreciate the submissions made by the learned counsel for the
parties, it will be necessary to make a reference to the provisions of the said Act as the
same existed before it was amended by the Maharashtra Act No. XVII of 1993. The
Sections which are relevant for our consideration are Sections 3, 7 and 19, which read
thus:
"3. Instruments chargeable with Duty.
Subject to the provisions of this Act and the exemptions contained in Schedule
I, the following instruments shall be chargeable with duty of the amount
indicated in Schedule I as the proper duty therefor respectively, that is to say--
(a) every instrument mentioned in Schedule I, which not having been
previously executed by any person, is executed in the state on or after the date
of commencement of this Act;
(b) every instrument mentioned in Schedule I, which, not having been
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 previously executed by any person, is executed out of the state on or after the
said date, relates to any property situate, or to any matter or thing done or to
be done in this State and is received in this State:
Provided that no duty shall be chargeable in respect of--
(1) any instrument executed by or on behalf of, or in favour of, the Government
in cases where, but for this exemption, the Government would be liable to pay
the duty chargeable in respect of such instrument or where the Government has
undertaken to bear the expenses towards the payment of the duty;
(2) any instrument for the sale, transfer or other disposition, either absolutely
or by way of mortgage or otherwise, of any ship or vessel, or any part, interest,
share or property of or in any ship or vessel registered under the Bombay
Coasting Vessels Act, 1838, or Merchant Shipping Act, 1958."
(emphasis added)
"7. Payment of higher duty in respect of certain instruments.- (1)
Notwithstanding anything contained in section 4 or 6 or it any other enactment,
unless it is proved that the duty chargeable under this Act has been paid,--
(a) on the principal or original instrument, as the case may be, or
(b) in accordance with the provisions of this section, the duty
chargeable on an instrument of sale, mortgage or settlement other than
a principal instrument or on a counterpart, duplicate or copy of any
instrument shall, if the principal or original instrument would, when
received in this State have been chargeable under this Act with a higher
rate of duty, be the duty with which the principal or original instrument
would have been chargeable under section 19.
(2) Notwithstanding anything contained in any enactment for the time being in
force, no instrument, counterpart, duplicate or copy chargeable with duty under
this section shall be received in evidence unless the duty chargeable under the
section has been paid thereon:
Provided that any Court before which any such instrument, duplicate or copy is
produced may permit the duty chargeable under this section to be paid thereon
and may then receive it in evidence."
"19. Payment of duty on certain instruments liable to be increased duty in
Maharashtra State.- Where any instrument of the nature described in any article
in Schedule I and relating to any property situate or to any matter or thing done
or to be done in this State is executed out of the State and subsequently
received in the State,--
(a) the amount of duty chargeable on such instrument shall be the amount of
duty chargeable under Schedule I on a document of the like description
executed in this State less the amount of duty, if any already paid under any
law in force in India excluding the State of Jammu and Kashmir on such
instrument when it was executed;
(b) and in addition to the stamps, if any, already affixed thereto such
instrument shall be stamped with the stamps necessary for the payment of the
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 duty chargeable on it under clause (a) of this section, in the same manner and
at the same time and by the same persons as though such instrument were an
instrument received in this State for the first time at the time when it became
chargeable with the higher duty; and
(c) the provisions contained in clause (b) of the proviso to sub-section (3) of
section 32 shall apply to such instrument as if such were an instrument
executed or first executed out of this State and first received in this State when
it became chargeable to the higher duty aforesaid, but the provisions contained
in clause (a) of the said proviso shall not apply thereto."
9 . The submissions made by the learned counsel representing the petitioners can be
summarized as under:
It is submitted that under Section 19(a) of the said Act, at the relevant time,
the words "a copy of the instrument" were not present as the same were
subsequently added by the Maharashtra Act No. XVII of 1993. Secondly, it was
submitted that merely because a copy of the deed or a certified or a verified
copy thereof is filed in the office of the Registrar of Companies in Mumbai as
per the requirement of Section 125 of the Companies Act, it cannot be said that
the original deed was received in the State of Maharashtra. It was urged that
even the charging section i.e. Section 3 makes it clear that the stamp duty is
chargeable, provided an instrument mentioned in Schedule-I to the said Act is
executed out of the State and is received in the State. It was submitted that
Section 7 of the said Act has no application as the same refers to Sections 4
and 6.
Relying on the definition of " instrument" under section 2(l) of the said Act, it
was submitted that a copy of the deed does not create or purport to create,
transfer or extinguish any right. Reliance was placed on the decisions of the
Apex Court in the case of Jupudi v. Pulavarthi MANU/SC/0573/1971 : AIR 1971
SC 1070 and Hariom Agrawal v. Prakash Chand Malviya MANU/SC/7993/2007 :
(2007) 8 SCC 514. Reliance was also placed on the decision of a Full Bench of
the Gujarat High Court in the case of Chief Controlling Revenue Authority v.
Nutan Mills Ltd. MANU/GJ/0085/1978 : AIR 1978 Gujarat 1. It was pointed out
that by Maharashtra Act No. XI of 1998, first proviso was inserted in Section 3
which provides that stamp duty will be payable even on a copy or facsimile
image of an instrument, if full stamp duty on the original is not paid. It was
submitted that this shows that till the Maharashtra Act No. XI of 1998 came into
force, stamp duty was not payable on a copy of an instrument. It was submitted
that the amendment made to Section 3 was not retrospective. Reliance was
placed on the decision of the Apex Court in the cases of Ruby Sales and
Services (P) Ltd. v. State of Maharashtra and others MANU/SC/0589/1994 :
(1994) 1 SCC 531 as well as Jupudi Kesava Rao v. Pulavarthi Venkata Subbarao
and others (supra).
Detailed submissions were also made on the constitutional validity of various
provisions of the said Act. It was pointed out that Entry 91 in List-I of Schedule
VII of the Constitution of India deals with the rates of stamp duty in respect of
bills of exchange, cheques, promissory notes, bills of lading, letters of credit,
policies of insurance, etc. It was contended that the entry 91 is only in respect
of "instruments" and hence, entry 63 of List-II which deals with rates of stamp
duty in respect of documents other than those specified in the provisions of

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 List-I is in relation to instruments and not any document. It was submitted that
the State Legislature cannot levy stamp duty on a copy of an instrument as the
relevant entry is in respect of instruments which do not include copies thereof.
It was submitted that a word "document" used in Entry 63 of List-II would have
to be construed as an instrument as entry 91 of List-1 refers only to
instruments and not to an ordinary document. It was submitted that even
according to the provisions of the Indian Stamp Act, 1899 (for short "Indian
Stamp Act"), the stamp duty is leviable only on the instruments. Relying upon
the decision of the Apex Court in the case of Bhopal Sugar Industries v. D.P.
Dube MANU/SC/0349/1962 : AIR 1964 SC 1037, it was submitted that the State
Legislature is powerless to enact a law providing for levy of stamp duty on a
document which is not an instrument. Relying upon the decision of the Apex
Court in the case of Bar Council of Uttar Pradesh v. State of U.P.
MANU/SC/0011/1972 : (1973) 1 SCC 261, it was urged that both Entry 91 of
List-I and Entry 63 of List-II are empowering fixation of rates of stamp duty in
respect of instruments. It was urged that a copy of an instrument is not an
instrument and, therefore, if Section 7 of the said Act is construed as
empowering levy of stamp duty on a copy of an instrument, to that extent the
section will be ultra vires the Entry 63 of List-II. Relying upon the decision of
the Apex Court in the case of Sushil Kumar v. State of Haryana
MANU/SC/0315/1987 : AIR 1988 SC 418, it was urged that the word
"document" can only include the original document and not a copy thereof.
10. The learned Special Counsel for the State of Maharashtra relied upon the decision
of the Apex Court in the case of New Central Jute Mills Co. Ltd. v. State of West Bengal
MANU/SC/0256/1963 : AIR 1963 SC 1307. He relied upon paragraph-16 of the said
decision. He submitted that liability will arise when the instrument is executed in one
State is used for doing things in another State. In such a case, the liability to pay stamp
duty will arise in both the States. Inviting our attention to Section 125 of the Companies
Act, he urged that even going by the case of the petitioners, the verified copies of the
instruments executed in the State of Gujarat were filed with the Registrar of Companies
in Mumbai for the purposes of registration of the charge of mortgage. He invited our
attention to the provisions of the said Act as it stood in January 1992. He submitted that
under clause (b) of sub-section (1) of Section 7, a duty was always payable on a copy
of the instrument. He submitted that even without amendment to Section 3 made by
adding a proviso, stamp duty was always leviable on a copy of the instrument covered
by clause (b) of sub-section (1) of Section 7 of the said Act. He submitted that in the
present case, differential duty has been charged in accordance with Section 19 of the
said Act. He submitted that even a true copy of the instrument which is executed in one
State but which is used in another State will become an instrument for the purposes of
the said Act. He would, therefore, submit that Entry 63 of List-II will cover copies of
instruments to which Section 7 is applicable.
11. We have given careful consideration to the submissions. Firstly, it will be necessary
to look at the provisions of the said Act as the same existed at the relevant time. We
have already quoted Sections 3, 7 and 19 of the said Act in the earlier part of this
Judgment. Schedule-I prescribes the rates of stamp duty on various
documents/instruments. The definition of "instrument" as contained in clause (l) of
Section 2 of the said Act reads thus:
"2. Definitions. In this Act, unless there is anything repugnant in the subject or
context.-

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 ...... ..... ..... ..... ..... .... ..... .....
(1) "instrument" includes every documents by which any right or liability is, or
purports to be, created, transferred, limited, extended, extinguished or
recorded, but does not include a bill of exchange, cheque, promissory note, bill
of lading, letter of credit, policy of insurance, transfer of share, debenture,
proxy and receipt"
12. Firstly, we are dealing with the question whether the copies of the deeds which are
the subject matter of these petitions were liable for payment of stamp duty under the
said Act. In the present case, we were dealing with the said deeds styled as Debenture
Trust Deeds which are executed in the State of Gujarat in respect of immovable
properties in Gujarat. Under the deeds subject matter of these petitions, a mortgage of
immovable properties was created in favour of a bank or a consortium of banks by way
of security for the debentures and the interest payable thereon. Stamp duty was paid on
the deeds in the State of Gujarat. We may note here that Chapter-II of the said Act has
the heading "Stamp Duties". Chapter-II has five sub-headings. Under sub-heading (A)
styled as "Of the Liability of Instruments to Duty", Sections 3 to 9 are included. Section
3 which we have quoted above specifically states that subject to the provisions of the
said Act and the exemptions contained in Schedule-I, the instruments set out in clauses
(a) and (b) are chargeable with duty of the amounts indicated in Schedule-I as the
proper duty therefor respectively. It is true that Section 3, at the relevant time, did not
refer to a copy of an instrument and it referred to only an instrument. It is also true that
at the relevant time, the proviso to Section 3 which deals with the copies of the
instruments was not on the statute book. Section 4 provides that where, in case of any
sale or mortgage or settlement, several instruments are employed for completing the
transaction, only the principal instrument is chargeable with duty prescribed in
Schedule-I and each of the other instruments shall be chargeable with a duty of ten
rupees instead of the duty prescribed for it in the Schedule-I. Section 5 provides that
any instrument comprising or relating to several distinct matters shall be chargeable
with the aggregate amount of the duties with which separate instruments, each
comprising or relating to one of such matters, would be chargeable under the said Act.
Section 6 provides that subject to the provisions of Section 5, an instrument so framed
as to come within two or more of the descriptions in Schedule-I shall be chargeable
only with the highest of such duties when the duties chargeable are different. Section 7
has a title "Payment of higher duty in respect of certain instruments". Sub-section (1) of
section 7 starts with a non-obstante clause which seeks to override Sections 4 and 6 or
any other enactment. Thus, in a way, this Section is by way of an exception to Sections
4 and 6. It provides that unless it is proved that the duty chargeable under the said Act
has been paid, (a) on the principal or original instrument, as the case may be, or (b) in
accordance with the provisions of this section, the duty chargeable on instrument of
sale, mortgage or settlement, other than a principal instrument or a copy of any
instrument shall, if the principal or original instrument, when received in the State
would have been chargeable under the said Act with a higher rates of duty, be the duty
with which the principal or original instrument would have been chargeable under
Section 19. In the present case, the deeds have been executed and stamped in the State
of Gujarat and, therefore, admittedly, the stamp duty chargeable under the said Act has
not been paid on the original deeds. As stated earlier, the deeds create a mortgage in
respect of immovable properties of the first petitioner Companies in Gujarat. It is also
not in dispute that the deeds subject matter of these petitions, if received in the State,
would have been chargeable under the said Act with a higher rate of duty. Sub-section
(1) of Section 7 provides that in case of a copy of any such instrument, stamp duty
under the said Act will be payable which is equivalent to the duty with which the
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principal or the original instrument would have been chargeable under Section 19. Sub-
section (2) of Section 7 provides that a copy of the instrument chargeable with duty as
provided in sub-Section (1) shall not be received in evidence unless the duty chargeable
under the said section has been paid thereon. Section 7 is also a charging section which
comes under sub-heading (A) "Of the Liability of Instruments to Duty". Sub-section (1)
of Section 7 specifically provides for payment of duty on a copy of the instrument. The
duty is payable, provided if the principal or the original instrument executed outside the
State, when received in the State, would have been chargeable for stamp duty under the
said Act with a higher rate of duty. It is true that Section 19 by itself does not provide
for payment of stamp duty on a copy of the instrument. But sub-section (1) of Section 7
which is a charging section, by a legal fiction makes Section 19 applicable to a copy of
an instrument to which clause (b) of sub-section (1) of Section 7 is applicable. That is
how, in the case of a copy of the instrument to which provisions of clause (b) of sub-
section (1) of Section 7 are applicable, the duty as provided under Section 19 will be
chargeable. Section 19 comes under the sub-heading (C) "Of the time of Stamping
Instruments". Section 19 is applicable to an instrument of the nature described in any
article in Schedule-I and relating to any property situate or to any matter or thing done
or to be done in the State is executed out of the State and is subsequently received in
the State. In such a case, an amount of duty chargeable on such instrument shall be the
amount of duty chargeable under Schedule-I on a document of the like description
executed in this State less the amount of duty, if already paid under any law in force in
India. As stated earlier, Section 7 which is a charging section specifically provides that
the duty under Section 19 will be payable on a copy of the instrument to which
provisions of clause (b) of sub-section (1) of Section 7 are applicable.
1 3 . There is no dispute that in the present petition, the copies of the deeds were
received in the State. The verified copies were brought into the State for registration of
charge as provided in Section 125. Subsections (1), (2) and (3) of Section 125 of the
Companies Act which are relevant, which read as under:
"125. Certain charges to be void against liquidator or creditors unless
registered.-- (1) Subject to the provisions of this Part, every charge created on
or after the 1st day of April, 1914, by a company and being a charge to which
this section applies shall, so far as any security on the company's property or
undertaking is conferred thereby, be void against the liquidator and any creditor
of the company, unless the prescribed particulars of the charge, together with
the instrument, if any, by which the charge is created or evidenced, or a copy
thereof verified in the prescribed manner, are filed with the registrar for
registration in the manner required by this Act within thirty days after the date
of its creation: Provided that the Registrar may allow the particulars and
instrument or copy as aforesaid to be filed within thirty days next following the
expiry of the said period of thirty days on payment of such additional fee not
exceeding ten times the amount of fee specified in Schedule X as the Registrar
may determine, if the company satisfies the Registrar that it had sufficient
cause for not filing the particulars, and instrument or copy within that period.
(2) Nothing in subsection (1) shall prejudice any contract or obligation for the
repayment of the money secured by the charge.
(3) When a charge becomes void under this section, the money secured thereby
shall immediately become payable."
14. As pointed out earlier, Section 3 as well as Section 7 of the said Act are charging

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sections. The deeds in this case relate to a thing done or to be done in the State of
Maharashtra. The thing done or to be done in the State of Maharashtra is the
registration of charge under Sections 125 read with 130 of the Companies Act. The
registration of the charge is to be made as provided in sub-section (1) of Section 125
by submitting the instrument with prescribed particulars or a copy thereof verified in a
prescribed manner. Such a charge is required to be entered by the Registrar of
Companies in a Register of charge as provided in Section 130 of the Companies Act.
Thus, in the cases in hand, copies of the deeds executed outside the State were brought
into State for a thing to be done in the State. In the circumstances, in view of Section 7
read with Section 19 of the said Act, differential stamp duty was payable on the verified
copies of the deeds in question brought into the State and submitted to the Registrar of
Companies at Mumbai in accordance with Section 125 read with section 130 of the
Companies Act.
15. Though we are not concerned with the proviso which was added by the Maharashtra
Act No. XI of 1998 to Section 3, we may note here that the effect of the proviso is that a
copy or extract or a facsimile image or otherwise of the original instrument on which
stamp duty is chargeable under the provisions of this section, shall be chargeable with
full stamp duty as provided in Schedule-I, if the proper duty payable on such original
instrument is not paid. The proviso operates in a completely a different field. It will
apply when the original document is executed in the State but stamp duty is not paid on
the same. In such a case, stamp duty will be payable on a copy of such instrument.
16. At this stage, we may make a useful reference to the decision of the Full Bench of
the Gujarat High Court in the case of Chief Controlling Revenue Authority v. Nutan Mills
Ltd. (supra). There were two questions framed which were referred to the Full Bench,
which read thus:
"(1) Whether a copy of an instrument produced under Section 125 of the
Companies Act is an Instrument chargeable with duty under Section Section
7(1) read with Section 19 and Section 2 of the Bombay Stamp Act, 1958?
(2) Whether the Collector & Assistant Supdt. of Stamps was right in
impounding the copy of the instrument and ordering levy of duty and penalty
under the provisions of Sections 33 and 39 of the Bombay Stamp Act, 1958?
The first question was answered in the affirmative. Thus, in so many words the Gujarat
High Court held that a copy of the instrument produced under Section 125 of the
Companies Act though is not an instrument within the meaning of the said Act would be
chargeable with the difference between the duty payable in accordance with sub-section
(1) of Section 7 read with Section 19 of the said Act and the duty payable under the
Bombay Stamp Act as applicable to the State of Gujarat. The Full Bench clarified that
such a copy of the original instrument cannot be called as an instrument within the
meaning of Section 2 of the said Act.
17. Reliance was placed by the petitioners on a decision of the Apex Court in the case
of Jupudi v. Pulavarthi (supra). The issue before the Apex Court was whether the
reception of secondary evidence of a written agreement to grant a lease is barred by the
provisions of Sections 35 and 36 of the Indian Stamp Act. The Apex Court considered
the issue in the light of Section 33 of the Indian Stamp Act read with Section 35. Both
the sections deal with the instruments chargeable with duty. Section 33 deals with
power of every person having by law or by consent of parties an authority to receive
evidence. It confers power on such person, if he finds that the instrument produced

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before him is not duly stamped, to impound the said document. Section 35 provides
that no instrument chargeable with the duty shall be admitted in evidence for any
purpose by any person having by law an authority to receive evidence unless such
document is duly stamped. It is in this context, that the Apex Court in paragraph 13 has
held that there is no scope for inclusion of a copy of a document as an instrument for
the purpose of the Stamp Act. It was held that Section 35 only deals with original
instruments and not the copies thereof. In the case in hand, under sub-section (2) of
Section 7 of the said Act, even a copy of the instrument covered by clause (b) of
subsection (1) of Section 7 cannot be received in evidence unless duty chargeable
thereon is fully paid. Therefore, the said decision will not help the petitioners.
18. In the case of Hariom Agrawal v. Prakash Chand Malviya (supra), the Apex Court
was dealing with a photostat copy of the instrument/agreement produced as a
secondary evidence when on the original document proper stamp duty was not paid.
The question was whether such a copy can be impounded under the provisions of the
Indian Stamp Act as amended by the Madhya Pradesh amendment. After considering the
provisions of Sections 33 and 35 of the Indian Stamp Act, the Apex Court came to the
conclusion that a copy of the instrument cannot be impounded. Even this decision will
have no application as the issue which arises in the cases in hand never arose before
the Apex Court. In the cases in hand, Section 7 of the said Act which is a charging
Section provides for levy of stamp duty on a copy of an instrument to which clause (b)
of Sub-section 1 thereof is applicable.
19. Therefore, we find that the difference of duty was payable on the copies of deeds,
which were filed under Section 125 of the Companies Act, in the light of the provisions
of Section 7 read with Section 19 of the said Act. In fact none of the decisions interpret
Section 7 of the said Act or a provision which is pari materia thereto.
20. Now, the other issue survives for our consideration is regarding the constitutional
validity of Section 7 in so far as it is applicable to the copies of the documents. It was
pointed out that Entry 91 in List-I of Schedule 7 of the Constitution of India deals with
rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of
lading, letters of credit, policies of insurance, etc. Entry 63 of List-II deals with rates of
stamp duty in respect of documents other than those specified in the entries in List-I. It
was submitted that the State Legislature is not competent to levy stamp duty on a copy
of an instrument. It was urged that the word "document" used in Entry 63 of List-II will
have to be construed as an instrument. It was submitted that even according to the
provisions of the Indian Stamp Act, stamp duty is leviable only on the instruments.
Relying upon the decision of the Apex Court in the case of Bhopal Sugar Industries v.
D.P. Dube (supra),it was submitted that the State Legislature is powerless to enact a
law providing for levy of stamp duty on a document which is not an instrument. Relying
upon the decision of the Apex Court in the case of Bar Council of Uttar Pradesh v. State
of U.P (supra), it it is pointed out the Apex Court has observed that both Entry 91 of
List-I and Entry 63 of List-II are empowering fixation of rates of stamp duty only in
respect of instruments and not in respect of any document. It was urged that a copy of
an instrument is not an instrument and, therefore, if Section 7 of the said Act is
construed as empowering levy of stamp duty on a copy of the instrument, to that
extent, the section will be ultra vires the Entry 63 of List-II. Relying upon the decision
of the Apex Court in the case of Sushil Kumar v. State of Haryana (supra), it was urged
that the word "instrument" can only include the original document and not a copy
thereof.
21. Entry 91 of List-I reads thus:
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 "91. Rates of stamp duty in respect of bills of exchange, cheques, promissory
notes, bills of lading, letters of credit, policies of insurance, transfer of shares,
debentures, proxies and receipts."
Entry 66 of List-II reads thus:
"63. Rates of stamp duty in respect of documents other than those specified in
the provisions of List I with regard to rates of stamp duty."
Both the entries do not contain the word "instrument". It is true that the Apex Court in
the case of Bar Council of UP v. State of UP has observed that Entry 91 of List-I refers
to "instruments". There are judicial pronouncements which hold that the word
"instrument" occurring in the definition clauses of both the Indian Stamp Act and the
said Act refers only to an original instrument and not to a copy of an instrument. The
argument is that both the above entries in Schedule VII relate only to instruments and
not the copies thereof and therefore, the provision of section 7 of the said Act lacks
legislative competence in so far as it seeks to levy stamp duty on copies of instruments.
2 2 . In several decisions, the Apex Court has laid down the law relating to the
interpretation of various entries in the Lists in the Schedule VII. The Apex Court in the
case of State of Gujarat v. Akhil Gujarat Pravasi V.S. Mahamandal MANU/SC/0333/2004
: (2004) 5 SCC 155, in paragraph 10 held thus:
"10. In interpreting the scope of various entries in the legislative lists in the
Seventh Schedule, widest-possible amplitude must be given to the words used
and each general word must be held to extend to ancillary or subsidiary matters
which can fairly be said to be comprehended in it. The entries should, thus be
given a broad and comprehensive interpretation. In order to see whether a
particular legislative provision falls within the jurisdiction of the legislature
which has passed it, the Court must consider what constitutes in pith and
substance the true subject-matter of the legislation and whether such subject-
matter is covered by the topics enumerated in the legislative list pertaining to
that legislature."
In the case of Offshore Holdings (P) Ltd. v. Bangalore Development Authority
MANU/SC/0060/2011 : (2011) 3 SCC 139, the Apex Court held thus:
"67. The entries in the legislative lists are not the source of powers for
the legislative constituents but they merely demarcate the fields of
legislation. It is by now well-settled law that these entries are to be
construed liberally and widely so as to attain the purpose for which
they have been enacted. Narrow interpretation of the entries is likely to
defeat their object as it is not always possible to write these entries with such
precision that they cover all possible topics and without any overlapping.
69. A Constitution Bench of this Court in Ujagar Prints (2) v. Union of India
[MANU/SC/0675/1988 : (1989) 3 SCC 488] described these entries and also
stated the principles which would help in interpretation of these entries. While
enunciating these principles, this Court held as under: (SCC pp. 512-13, para
48)
"48. Entries to the legislative lists, it must be recalled, are not sources of the
legislative power but are merely topics or fields of legislation and must receive
a liberal construction inspired by a broad and generous spirit and not in a
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 narrow pedantic sense. The expression 'with respect to' in Article 246 brings in
the doctrine of 'pith and substance' in the understanding of the exertion of the
legislative power and wherever the question of legislative competence is raised
the test is whether the legislation, looked at as a whole, is substantially 'with
respect to' the particular topic of legislation. If the legislation has a
substantial and not merely a remote connection with the entry, the
matter may well be taken to be legislation on the topic."
70. This Court, while referring to the principles of interpretation of entries in
the legislative lists, expanded the application to all ancillary or subsidiary
matters in Jijubhai Nanabhai Kachar v. State of Gujarat [MANU/SC/0033/1995 :
1995 Supp (1) SCC 596] and held as under: (SCC p. 609, para 7)
"7. It is settled law of interpretation that entries in the Seventh Schedule are
not powers but fields of legislation. The legislature derives its power from
Article 246 and other related articles of the Constitution. Therefore, the power
to make the Amendment Act is derived not from the respective entries but
under Article 246 of the Constitution. The language of the respective
entries should be given the widest scope of their meaning, fairly
capable to meet the machinery of the Government settled by the
Constitution. Each general word should extend to all ancillary or
subsidiary matters which can fairly and reasonably be comprehended
in it. When the vires of an enactment is impugned, there is an initial
presumption of its constitutionality and if there is any difficulty in
ascertaining the limits of the legislative power, the difficulty must be
resolved, as far as possible in favour of the legislature putting the
most liberal construction upon the legislative entry so that it may have
the widest amplitude."
This line of interpretation had been stated in Hoechst Pharmaceuticals Ltd. v.
State of Bihar [MANU/SC/0392/1983 : (1983) 4 SCC 45] and followed in
different judgments of this Court including the judgments cited above."
(emphasis added)
In the case of Indian Handicrafts Emporium v. Union of India MANU/SC/0640/2003 :
(2003) 7 SCC 589, in paragraph 62, the Apex Court held thus:
6 2 . That the appellants used to trade in ivory stands admitted. They, thus,
would come within the purview of the definition of trader also is undisputable.
The manner in which despite legal ban on trade a person may not take recourse
to illegal trading is a matter which squarely falls within the purview of the
legislative competence. It is now well settled that Parliament can not
only enact a law for avoidance or evasion of commission of an illegal
trade but also may make law to see that the law is not evaded by
taking recourse to machination or camouflage. The loopholes, if any,
in such matters can and should be plugged. "Means affecting means"
principle as adumbrated in United States v. Darby
[MANU/USSC/0150/1941 : 312 US 100 : 85 L Ed 609 (1941)] is an
illustration on the point. Both substantial and procedural provisions
can be made to make a law in furtherance of the object for which the
Act has been enacted and to see that what is sought to be prohibited
directly may not be achieved by the traders indirectly.

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 (emphasis added)
2 3 . We are dealing essentially with a deed/an instrument which is executed and
stamped in another State where the stamp duty payable is less than the stamp duty
payable on a similar deed executed in the State of Maharashtra. The said deed is used
in the State of Maharashtra for registering a charge by lodging a verified copy of the
deed in the office of the Registrar of Companies in accordance with sections 125 read
with 130 of the Companies Act. The deeds were chargeable in the State of Gujarat as
the same are executed in the said State. Copies of the same are received in the State of
Maharashtra for registering a charge in the office of the Registrar of Companies. The
entries in the Schedule VII extend to all ancillary or subsidiary matters which can fairly
and reasonably be comprehended in it. If the entry 63 applies to instruments, it will
extend to all subsidiary and ancillary matters connected with the said entry. Section 7 of
the said Act which deals with copies of the instruments has a direct and substantial
connection with the said entry 63. The said entry cannot be given a restricted meaning
and interpretation which is contrary to the law laid down by the Apex Court. Liberal
construction will have to be put so that it can be of a wide amplitude. The entry 63 will
encompasses in itself even copies of instruments.
24. Moreover, clause (b) of Sub-section 1 of Section 7 is intended to ensure that no
one evades the stamp duty payable on an instrument under the said Act by executing
and stamping the original in another State where a lesser stamp duty is payable and
thereafter, bring a copy thereof within the State for doing something on the basis of the
rights and liabilities created by it. The legislative intent is to ensure that there is no
evasion of duty on such instruments. The provision is to levy only a differential duty.
There is no double taxation.
25. We, therefore, reject the argument that Section 7 read with Section 19 in so far as
the same apply to the copies of the instruments are not constitutionally valid.
26. Hence, the petitions must fail. The writ petitions are accordingly rejected. Rule is
discharged with no order as to costs. The interim/ad-interim orders operative till today
are extended by a period of ten weeks from today.
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