Stamp papers some suggestions about timely use though they may not have any expiry period ,the limitation is only for claiming refund against unused stamp papers.

[C.A. DEV KUMAR KOTHARI]

Stamp papers:

Stamp papers of varied type are in use for payment of stamp duty payable on various documents which require payment of stamp duty. There are stamp papers issued by Central Government and State Governments. Judicial stamp papers, non judicial stamp papers are two important types. Besides stamp paper payment of stamp duty by way of adhesive stamps on documents or by franking machines are also in vogue. In those cases stamp duty is paid in treasury or other agency, and then document is affixed with adhesive  stamps or  stamps duty printed by franking machine.

Use of proper stamp papers or proper stamping of documents is a legal requirement. Besides, documents executed on properly stamped papers of current dates is important to avoid disputes and doubts about genuineness of document.

Date of issue of stamp paper:

The Treasury or the stamp vendor from  whom stamp paper is purchased places his stamp indicating relevant information like Treasury counter no. and place of issue or   name of vendor, vendors license number, serial number of stamp paper and date of issue or sale of stamp paper. The name of buyer is also written. The name of buyer can be in name of any party to the agreement or their representatives like an officer of company or  Advocate or CA.

Validity vis a vis refund:

There is wide spread misconception that a stamp paper has a limitation or expiry date for its use. The author had many times expressed his view before advocate and other professional friends that there is no such limitation for use. Off course to avoid doubts and suspicion about antedating of documents it is always advisable to use the stamp paper as early as possible after its purchase from the vendor or treasury.   The Supreme Court has also held that the limitation is for refund and not use. A discussion in this regard is made in this article and judgment of the Supreme Court is also appended after the article.

Return of unused stamp papers or damaged stamp papers:

A person who hold stamp papers which are not used or which have been spoiled due to document typed but not executed etc. can be returned and a refund can be claimed as per provisions of S. 54 of the Stamps Act, 1899. The provision provides circumstances in which a refund can be claimed and limitation for the same. However, in no provision it is stated that the stamp paper has a limitation or expiry date for its use.       

Better course is to use current stamp papers:

Where a stamp paper is used for executing agreement  between closely related parties, or documents which are amenable to challenge by  some other parties  having direct or indirect interest or other authorities, or where some parties may have reason to doubt about genuineness of documents as being ante dated or fabricated etc. the better course is to use latest stamp papers and avoid use of old stamp papers so that no one can express doubt about genuineness for the reason that the stamp paper used is very old .

In case of lengthy documents, stamping by way of franking machine, adhesive stamps or by way of payment and certification can be used.  Stamp duty by these methods can be paid when it is sure that the document is to be executed so that there is no need of cancellation of stamps and refund. However, even in such cases some time contingency may arise when the document is not fully executed  or cannot be acted upon. In such cases provisions for refund as applicable in the local area should be considered before hand.

Ruling of the Supreme Court

In case of Thiruvengada Pillai Versus Navaneethammal & Anr. 2009 -TMI - 33421   (SC) question about validity of stamp paper came for consideration. IN this case the Supreme Court decided related issues whichare summarized below:

1. The Stamp Act, 1899 nowhere prescribes any expiry date for use of a stamp paper.
2. Section 54 merely provides that a person possessing a stamp paper for which he has no immediate use (which is not spoiled or rendered unfit or useless), can seek refund of the value thereof by surrendering such stamp paper to the Collector provided it was purchased within the period of six months next preceding the date on which it was so surrendered.
3. The stipulation of the period of six months prescribed in Section 54 is only for the purpose of seeking refund of the value of the unused stamp paper, and not for use of the stamp paper.
4. Section 54 does not require the person who has purchased a stamp paper, to use it within six months. Therefore, there is no impediment for a stamp paper purchased more than six months prior to the proposed date of execution, being used for a document.
5. The Stamp Rules, 1925 applicable to Tamil Nadu, do not contain any provision that the stamp papers of required value should be purchased together from the same vendor with consecutive serial numbers. (per author: in this regard one should check requirement as per applicable local Rules in this regard). Better course, to avoid disputes is to purchase consecutive stamp papers, or a set of stamp papers with writing about the set of such papers when a document is required to be executed on stamp papers of certain value.