Bombay High Court Asks State's Revenue Dept To Consider Providing E-Stamp Facilities, Licence For New Vendors

The division bench of Chief Justice Dipankar Datta and Justice Madhav Jamdar in a PIL filed by lawyer Swapnil Kadam observed that "dearth of stamp paper vendors could pose problems for many people".

The PIL prayed for directions to the state to consider introducing e-stamping facility across the state as well as to provide adequate stamp vendors and Mumbai considering the growth of population and litigation. The petitioner also sought directions to conduct inquiry into alleged illegal sale and purchase of stamp papers across the state by certain stamp vendors.

In its reply, the state stated that amendment in Bombay Stamp Supply & Sales Rules (1934 Rules) to grant permanent stamp vendor licenses to Bar Associations and Advocate Societies, was moved. However, as per directions of the Law & Judiciary Department, the draft Maharashtra Stamp Supply and Sales Rules have been sent for processing to the Additional Controller of Stamps. Once these Rules are sanctioned, the way to grant permanent license to bar associations and advocate societies will be open, the state submitted.

The state conceded that there are only a few stamp paper licenses in Mumbai but stated that the demand for physical stamp paper has decreased due to availability of digital options to deposit stamp duty. This decreasing dependency on physical stamp paper is the reason for decline in number of private stand vendors.

The state submitted that revenue of 98.3% (Rs 9102 Cr.) of duty is generated from digital options while 1.02% (Rs. 94 Cr) is generated from franking machine and only 0.68% (Rs 63 Cr.) is generated from physical Stamp Papers.

The petitioner in his rejoinder stated that the amendment to the 1934 Rules is not necessary to allow the associations to obtain stamp paper vendor license as the associations are a body corporate included in the definition of 'person' under the General Clauses Act, 1977.

The petitioner submitted that a controversy has been deliberately created by making a special class in license distribution for the advocate associations. "The said licenses were issued under the directions of the Hon'ble High Court till the effective mechanism is set up according to the G.R. date 26th March 2004." The petitioner claimed that Mudrank Vikreta Sangh, Mumbai was the only interested party instrumental in interfering with the directions of the Hon'ble Court issued vide Order dated 14th October 2014 in W.P. No.263 of 2013.

The petitioner stated that while it is true that very small part of revenues generated through franking and physical stamp papers, there are more buyers in the category of the franking and physical stamp papers. The petitioner said that many times a single stamp paper of Rs. 100 or Rs. 500 is required compelling the buyers to gather at the few available places for buying physical stamp papers resulting in long queues.

The petitioner also claimed that more than Rs. 26 Cr out of Rs. 63 Cr physical stamp paper revenue is generated from Mumbai alone from only 3 or 4 vendors. This shows that 12 stamp paper vendors are not enough to cater to the city's need. The petitioner contended that requirement of physical stamp paper of Rs 100 and 500 cannot be equated with the bulk stamp duty purchase at the time of purchase and sale of the immovable properties.

The court did not further examine the matter stating that a policy decision has to be taken by the government. "Whether or not e-stamp facility is to be introduced and/or whether the number of stamp vendors is to be increased are within the exclusive domain of the executive", the court held. The court added that it could not be proper for the court to make any mandatory direction in since the petitioner has not specifically denied the States reply.

The court said that the petitioner may supplement his representation and submit additional material before the Additional Chief Secretary. The court directed this to be completed within eight weeks from the date of receipt of an authenticated copy of this order.

The court did not deal with allegations against Mudrank Vikreta Sangh, Mumbai and observed that if the petitioner knows of any incident where a stamp vendor has acted contrary to law attracting a penal offense, he may set the criminal law in motion by lodging an appropriate complaint before the appropriate court.

Case no. – Public Interest Litigation No. 5 of 2022

Case title – Swapnil Sadhu Kadam v. State of Maharashtra & Ors.

Citation: 2022 LiveLaw (Bom) 438