THE SUPREME COURT JUDGEMENT ON LEVY OF PENALTY BY COLLECTOR OF STAMPS UNDER SECTION 40 OF THE INDIAN STAMP ACT, 1899.

NAME		MOBILE NO.	E-MAIL I’D
RANJEET KUMAR		8383098478, 9667769795	rk@courtkutchehry.com
JAI THAKUR		8130703334, 9355723300	jai.thakur@courtkutchehry.com
RAJEEV RANJAN		9334553249	rajiv.ranjan@courtkutchehry.com
ASHOK MISHRA		9718327746	sales@courtkutchehry.com
RAVI KUMAR			ravi.singh@courtkutchehry.com

TRUSTEES OF H.C. DHANDA TRUST vs. STATE OF MADHYA PRADESH & ORS, (2020) 09 SC CK 0029

A Fill Bench of the Supreme Court partly allowed the Appeal and modified the penalty imposed by Collector of Stamps from ten times  into five times penalty .The Full Bench in its judgement  expressed the view that the  purpose of penalty generally is a deterrence and not retribution. When a discretion is given to a public authority, such public authority should exercise such discretion reasonably and not in oppressive manner. The responsibility to exercise the discretion in reasonable manner lies more in cases where discretion vested by the statute is unfettered. Imposition of the extreme penalty i.e. ten times of the duty or deficient portion thereof cannot be based on the mere factum of evasion of duty. The reason such as fraud or deceit in order to deprive the Revenue or undue enrichment are relevant factors to arrive at a decision as to what should be the extent of penalty under Section 40(1)(b) of the Indian Stamp Act 1899.The Supreme Court also opined that it was not the case of the Collector of Stamps that the conduct of the Appellant was dishonest  or contumacious.