Stamp Duty – Several instruments in one transaction – Duty Chargeable on principal instruments so determined shall be highest duty chargeable in respect of any of said instruments: Bombay Stamp Act, 1958 section 4

Section 4 of the Bombay Stamp Act, 1958 inter alia, provides that where, in case of any specific instrument, i.e. development agreement, sale, mortgage or settlement, if several instruments are employed for completing the transaction, then the principal instrument only shall be chargeable with duty prescribed in Schedule – I and each of the other instruments shall be chargeable with duty of Rs.100/- instead of the duty, if any, prescribed for it in that schedule.

Sub section (2) of section 4 of the said Act enables the parties to determine for themselves which of the instruments so employed shall for the purposes of sub section (1), be deemed to be the principal instrument. Sub section (3) of section 4 of the said Act provides that where parties fail to determine the principal instrument between themselves, then the officer before whom the instrument is produced may, for the purposes of this section, determine the principal instrument.

The proviso to section 4, which governs the entire section provides that the duty chargeable on principal instrument so determined shall be the highest duty which would be chargeable in respect of any of the said instruments so employed. Thus, in order that the provisions of section 4 of the said Act are attracted, in the first place it will have to be established that several instruments were employed for completing one and the same transaction. In the context of present case therefore, it was for the petitioner to establish that the development agreement, power of attorney and the sale deed were nothing but several instruments employed for completing the transaction of the sale of the said property.