Gujarat HC upholds ruling on physical non-judicial stamp paper

The Gujarat High Court has disposed of a petition that challenged the state’s decision to halt the use of physical non-judicial stamp paper in the state.

A group of six petitions had been moved, urging the Court to declare that the new rule, Rule 8-A, in the Gujarat Stamps Supply and Sales Rules, 1987 was ultra vires the Indian Stamp Act, 1889 and the Gujarat Stamp Act, 1958.

A Division Bench of Chief Justice Vikram Nath and Justice Ashutosh J Shastri dismissed the challenge and upheld the validity of the new rule.

With the aid of the Lists in the Constitution, the Court found that the Indian Stamp Act was “neither the parent Act nor a superior legislation” to the Gujarat Act because they operated in separate spheres.

Stamp duty rates for negotiable instruments is an entry enumerated in the Union’s areas of legislation i.e. the Union List. The Indian Stamp Act was introduced using this entry.

The State List, on the other hand, lists stamp duty rates for other kinds of documents. The Concurrent List, which specifies matters upon which both the Centre and the State can legislate, has “stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty” as an entry.

The Court went on to reject the petitioner's arguments that the State did not have the power to introduce the challenged rule, noting that, "Section 74 of the 1889 Act and section 69 of the 1958 Act confers specific powers on the State Government to make rules for regulating the supply and sale of stamps and stamp paper."