Concept of denoting duty and relevant provisions

Synopsis

Denoting Duty... Meaning 

Several instruments used in single transaction of sale, mortgage or settlement.–......General Rule

Effect of Denoting Duty. .......Document becomes admissible in law

 Cancellation of adhesive stamps.........Procedure, Duty and effect of non cancellation on instrument bearing adhesive stamps......Section 12

Instruments how to be written.....Sction 13,14,15

Denoting Duty... Meaning 

Where the duty with which an instrument is chargeable, or its exemption from duty, depends in any manner upon the duty actually paid in respect of another instrument, the payment of such last mentioned duty shall, if application is made in writing to the Collector for that purpose, and on production of both the instruments, Collecter acknowledges and denote  upon such first mentioned instrument, by endorsement under the hand of the Collector that duty with respect to such instrument had already been received.

Several instruments used in single transaction of sale, mortgage or settlement.– [(1) Where, in the case of any sale, mortgage or settlement, several instruments are employed for completing the transaction, the principal instrument only shall be chargeable with the duty prescribed in Schedule I, for the conveyance, mortgage or settlement, and each of the other instruments shall be chargeable with a duty of four rupees instead of the duty (if any) prescribed for it in that Schedule].

      (2)  The parties may determine for themselves which of the instruments so employed shall, for the purposes of sub-section (1), be deemed to be the principal instrument:

      Provided that the duty chargeable on the instrument so determined shall be the highest duty which would be chargeable in respect of any of the said instruments employed.

Instruments relating to several distinct matters.– Any instrument comprising or relating to several distinct matters shall be chargeable with the aggregate amount of the duties with which separate instruments, each comprising or relating to one of such matters, would be chargeable under this Act.

6.   Instruments coming within several descriptions in Schedule I.– Subject to the provisions of the last preceding section, an instrument so framed as to come within two or more of the descriptions in Schedule I, shall, where the duties chargeable thereunder are different, be chargeable only with the highest of such duties:

     [Provided that nothing contained in this Act shall render chargeable with duty exceeding four rupees a counterpart or duplicate of any instrument chargeable with duty and in respect of which the proper duty has been paid].

7.   Policies of sea-insurance.– (1) No contract for sea-insurance (other than such insurance as is referred to in section 506 of the Merchant Shipping Act, 1894) shall be valid unless the same is expressed in a sea-policy.

      (2)  No sea-policy made for time shall be made for any time exceeding twelve months.

      (3)  No sea-policy shall be valid unless it specifies the particular risk or adventure, or the time, for which it is made, the names of the subscribers or under-writers, and the amount or amounts insured.

      (4)  Where any sea-insurance is made for or upon a voyage and also for time, or to extend to or cover any time beyond thirty days after the ship shall have arrived at her destination and been there moored at anchor, the policy shall be charged with duty as a policy for or upon a voyage, and also with duty as a policy for time.

8.   Bonds, debentures or other securities, issued on loans under Act XI, 1879.– (1) Notwithstanding anything in this Act, any local authority raising a loan under the provisions of the Local Authorities Loan Act, 1879, or of any other law for the time being in force, by the issue of bonds, debentures or other securities, shall, in respect of such loan, be chargeable with a duty of one per centum] on the total amount of the bonds, debentures or other securities issued by it, and such bonds, debentures or other securities need not be stamped, and shall not be chargeable with any further duty on renewal, consolidation, sub-division or otherwise.

      (2)  The provisions of sub-section (1) exempting certain bonds, debentures or other securities from being stamped and from being chargeable with certain further duty shall apply to the bonds, debentures or other securities of all outstanding loans of the kind mentioned therein, and all such bonds, debentures or other securities shall be valid, whether the same are stamped or not:

      Provided that nothing herein contained shall exempt the local authority which has issued such bonds, debentures or other securities from the duty chargeable in respect thereof prior to the twenty-sixth day of March, 1897, when such duty has not already been paid or remitted by order issued by the [Federal Government].

      (3)  In the case of wilful neglect to pay the duty required by this section, the local authority shall be liable to forfeit to the [Provincial] Government a sum equal to ten per centum upon the amount of duty payable, and a like penalty for every month after the first month during which the neglect continues.

9.   Power to reduce, remit or compound duties.– [The Provincial Government] may, by rule or order published in the[Official Gazette]–

      (a)  reduce or remit, whether prospectively or retrospectively, in the whole or any part of [the territories under its administration], the duties with which any instruments or any particular class of instruments, or any of the instruments belonging to such class, or any instruments when executed by or in favour of any particular class of persons, or by or in favour of any members of such class, are chargeable, and

      (b)  provide for the composition or consolidation of duties in the case of issues by any incorporated company or other body corporate of debentures, bonds or other marketable securities.

[9-A. Power of Provincial Government to exempt certain instruments.– The Provincial Government may by [notification in] the official Gazette, generally exempt from payment of the whole or any part of the duties on any instrument executed by or in favour of a banking company in the normal course of its banking business.

      Explanation– For the purpose of this Section, “Banking Company” shall have the same meaning as in the Banking Tribunals Ordinance, 1984.

B-Of stamps and the mode of using them

10.   Duties how to be paid.– (1) Except as otherwise expressly provided in this Act, all duties with which any instruments are chargeable shall be paid, and such payment shall be indicated on such instruments, by means of stamps [or e-stamps]–

        (a)  according to the provisions herein contained, or

        (b)  when no such provision is applicable thereto, as the [Provincial Government] may by rules direct.

      (2)  The rules made under sub-section (1) may, among other matters, regulate,–

            (a)  in the case of each kind of instrument–the description of stamps [or e-stamps] which may be used;

            (b)  in the case of instruments stamped with impressed stamps–the number of stamps which may be used;

            (c)  in the case of bills of exchange or promissory notes written in any Oriental language–the size of the paper on which they are written.

11.   Use of adhesive stamps.– The following instruments may be stamped with adhesive stamps, namely:-

        (a)  instruments chargeable with [a duty not exceeding twenty-five paisa], except parts of bills of exchange payable otherwise than on demand and drawn in sets;

        (b)  bills of exchange,  and promissory notes drawn or made out of [Pakistan];

        (c)  entry as an advocate, vakil or attorney on the roll of a High Court;

        (d) notarial acts; and

        (e)  transfers by endorsement of shares in any incorporated company or other body corporate.

12.   Cancellation of adhesive stamps.– (1) (a) Whoever affixes any adhesive stamp to any instrument chargeable with duty which has been executed by any person shall, when affixing such stamp, cancel the same so that it cannot be used again; and

      (b)  whoever executes any instrument on any paper bearing an adhesive stamp shall, at the time of execution, unless such stamp has been already cancelled in manner aforesaid, cancel the same so that it cannot be used again.

      (2)  Any instrument bearing an adhesive stamp which has not been cancelled so that it cannot be used again, shall, so far as such stamp is concerned, be deemed to be unstamped.

      (3)  The person required by sub-section (1) to cancel an adhesive stamp may cancel it by writing on or across the stamp his name or initials or the name or initials of his firm with the true date of his so writing, or in any other effectual manner.

13.   Instruments stamped with impressed stamps how to be written.– Every instrument written upon paper stamped with an impressed stamp shall be written in such manner that the stamp may appear on the face of the instrument and cannot be used for or applied to any other instrument.

14.   Only one instrument to be on same stamp.– No second instrument chargeable with duty shall be written upon a piece of stamped paper upon which an instrument chargeable with duty has already been written:

      Provided that nothing in this section shall prevent any endorsement which is duly stamped or is not chargeable with duty being made upon any instrument for the purpose of transferring any right created or evidenced thereby or of acknowledging the receipt of any money or goods the payment or delivery of which is secured thereby.

15.   Instrument written contrary to section 13 or 14 deemed unstamped.– Every instrument written in contravention of section 13 or section 14 shall be deemed to be unstamped.

16. Denoting duty.– Where the duty with which an instrument is chargeable, or its exemption from duty, depends in any manner upon the duty actually paid in respect of another instrument, the payment of such last mentioned duty shall, if application is made in writing to the Collector for that purpose, and on production of both the instruments, be denoted upon such first mentioned instrument, by endorsement under the hand of the Collector or in such other manner (if any) as the [Provincial Government] may by rule prescribe.