Collector's power to stamp instruments impounded
Section 40 of the Indian Stamp Act, 1899 deals with collector's power to stamp instruments impounded. When the Collector impounds any instrument under section 33, or receives any instrument sent to him under section 38, sub-section (2), not being an instrument chargeable [with a duty not exceeding ten naye paise] only or a bill of exchange or promissory note, he shall adopt the following procedure:- The Act came into force on 01 Jul 1899.
(1) When the Collector impounds any instrument under section 33, or receives any instrument sent to him under section 38, sub-section (2), not being an instrument chargeable 1[with a duty not exceeding ten naye paise] only or a bill of exchange or promissory note, he shall adopt the following procedure:--
(a) if he is of opinion that such instrument is duly stamped, or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamp, or that it is not so chargeable, as the case may be;
(b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees; or, if he thinks fit, 2[an amount not exceeding] ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees:
Provided that, when such instrument has been impounded only because it has been written in contravention of section 13 or section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section.
(2) Every certificate under clause (a) of sub-section (1) shall, for the purposes of this Act, be conclusive evidence of the matters stated therein.
(3) Where an instrument has been sent to the Collector under section 38, sub-section (2), the Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer.
STATE AMENDMENTS
Uttarakhand.--
Amendment of section 40.--After sub-section (1), the following sub-sections shall be inserted, namely:--
"(1-A) The Collector shall also require, alongwith the amount of deficit Stamp Duty of penalty required to be paid under clause (b) of sub-section (1), the payment of a simple interest at the rate of one and half percent per mensem on the amount of deficit stamp duty calculated from the date of the execution of the instrument till the date of actual payment;
Provided that the amount of interest under this sub-section shall be recalculated if the amount of deficit stamp duty is varied on appeal or revision or by any order of a competent court or authority.
(1-B) The amount of interest payable under sub-section (1-A) shall be added to the amount due and be also deemed for all purposes to part of the amount required to be paid.
(1-C) Where realization of the deficit stamp duty reminded stayed by any order of any court or authority and such order of stay is subsequently vacated, the interest referred to in sub-section (1-A) shall be payable also for any period during which such order of stay remain in operation.
(1-D) Any amount paid or deposited by, or removed, or refundable to a person under the provisions of this Act, shall first be adjusted towards the deficit stamp duty or penalty outstanding against him and the excess, if any, shall then be adjusted towards the interest, in any, due from him."
[Vide Uttarakhand Act 1 of 2016, s. 6]
Section 40, The Indian Stamp Act, 1899 (Act 2 of 1899).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Referred to by 7
- s. 33 Examination and impounding of instruments
- s. 41 Instruments unduly stamped by accident
- s. 42 Endorsement of instruments on which duty has been paid under sections 35, 40 or 41
- s. 44 Persons paying duty or penalty may recover same in certain cases
- s. 45 Power to Revenue-authority to refund penalty or excess duty in certain cases
- s. 56 Control of, and statement of case to, Chief Controlling Revenue-authority
- s. 62 Penalty for executing, etc., instrument not duly stamped
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
-
Trustees of H. C. Dhanda Trust Trustee, Jogesh vs The State of Madhya Pradesh Collector Indore
Court's Decision & Legal Precedent
When a discretion is vested by statute in a public authority to impose penalty not exceeding ten times the proper duty or deficient portion thereof under Section 40(1)(b) of the Indian Stamp Act, 1899, such discretion must be exercised reasonably and not in an oppressive manner. The imposition of extreme penalty of ten times is not automatic or mechanical but requires consideration of relevant factors including the conduct of the party, intent, fraud, deceit, and circumstances of the case. Mere intention to evade duty is insufficient to justify the maximum penalty; it is only in very extreme situations that the maximum penalty should be imposed. The purpose of penalty is deterrence and not retribution.
On this section: Collector's power to stamp instruments impounded; discretion to impose penalty not exceeding ten times the proper duty or deficient portion
-
Raymond Ltd. vs State of Chhattisgarh
Court's Decision & Legal Precedent
The Board of Revenue has jurisdiction to entertain a revisional application under Section 56(4) of the Indian Stamp Act, 1899 even after a Collector has issued an endorsement certificate under Section 32 of the Act. The legal fiction created under Section 32(3) is limited to the receivability of the instrument in evidence and does not render the Collector's determination final or binding on the State. The revisional power flows from the statutory scheme and applies to all determinations made under Section 31, irrespective of whether an endorsement has been made under Section 32. The term 'any party' in Section 56(4) includes both the applicant and the State, enabling either to file a revision application. Acceptance of the Collector's determination and payment of assessed stamp duty does not preclude the revisional authority from exercising its jurisdiction to satisfy itself as to the correctness of the amount of duty chargeable.
On this section: Referenced in Section 56(2) as one of the sections under which Collector may draw up statement of case for referral to Chief Controlling Revenue Authority
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
-
… the several flat-holders who have purchased the flats in the Himalaya House and whether the Assignment in question is a Conveyance or a sale for a price which has passed from the hand of the flat-holders long before the date of assignment. (2) Whether it was competent to the Assistant Superintendent of Stamps, under section 40 of the Indian Stamp Act, 1899 (now section 39 of the Bombay Stamp Act, 1958), to go beyond the terms of the document when it is mentioned in the document that no consideration is passed and assess the stamp duty in the manner mentioned by him in his order dated June 26, 1956." This has been answered in paragraphs …
Questions about Section 40
What have the courts held on Section 40 of the Indian Stamp Act?
Trustees of H. C. Dhanda Trust Trustee, Jogesh vs The State of Madhya Pradesh Collector Indore (17 Sep 2020) is the leading judgment on this section among those set out below: Collector's power to stamp instruments impounded; discretion to impose penalty not exceeding ten times the proper duty or deficient portion. Another 1 judgment on this section is set out below, all of them from the Supreme Court. They run from 2007 to 2020.
How do I find court cases under Section 40 of the Indian Stamp Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Stamp Act 40, section 40 Stamp Act, section 40 of the Indian Stamp Act. People searching for it also type indian stamp act article 40. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 2 reported judgments on this section are set out on this page, beginning with Trustees of H. C. Dhanda Trust Trustee, Jogesh vs The State of Madhya Pradesh Collector Indore (17 Sep 2020).
What should I read with Section 40 of the Indian Stamp Act, and has it changed?
Its own text turns on section 13 (Instruments stamped with impressed stamps how to be written), section 14 (Only one instrument to be on same stamps), section 33 (Examination and impounding of instruments), section 38 (Instruments impounded how dealt with), so none of them can safely be read on its own. 7 other provisions in this corpus refer back to it.
When did Section 40 of the Indian Stamp Act come into force?
Section 40 of the Indian Stamp Act, cited as Stamp Act 40, came into force on 01 Jul 1899, having been enacted on 27 Jan 1899. It is in force as at the date shown on this page.
Other sections of this Act
- 47. Power of payer to stamp bills, and promissory notes received by him unstamped4923 words
- 2. Definitions3110 words
- 3. Instruments chargeable with duty1916 words
- 10. Duties how to be paid1187 words
- 28. Direction as to duty in case of certain conveyances961 words
- 73. Books, etc., to be open to inspection932 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.