The decision also clarified that stamp duty arrears, even if due, must be paid with respect to the rate in effect at the time the old document was executed and not at the rates in effect at the time of subsequent sale. Customs authorities cannot therefore refuse to register the agreement for real estate that is now acquired for resale, even if the instrument or previous agreement has not been registered or has not been buffered properly or insufficiently at the rate in force at the date of application. In addition to the recovery of the excise duty on the deficit in such cases, the party concerned is required to pay a fine of 250 billion /- plus 15% interest for each year or part of the year on the amount of the deficit from the date of presentation of the instrument before the sub-chancellor. In accordance with Section 62 of the article schedule I of Bombay Stamp Act, 1958 are grouped into three categories. Category 1) Article whose stamp duty is fixed regardless of the value indicated in the document/instrument. (Viz. Administration Bond, Adoption Deed, Affidavit, Divorce, Appointment in Execution of Power , Apprenticeship Deed, Article of Clerkship, Award, Cancellation Deed, Charter Party, Duplicate, Copy of Extracts, Entry of Memorandum of Marriage, Resonity Bond, Letter of License, Memorandum of Association of a Company, Notarial Act, Attorney, etc.) Category 2) Items for which the amount of stamp duty varies depending on the value shown in the document. (Viz. Agreement to deposit title, pledge, pledge or mortgage, list of assignment, lease, statutes, mortgage, guarantee loan, etc.) Category 3) Items that attract stamp duty on the real market counterparty or value mentioned in the document, based on the highest value. (Viz. Promotion, sales contract, gift, exchange, partnership, sharing, development agreement, transfer, trust, etc.) For Category 1 and 2 instruments, stamp duty due can be determined by reference to Calendar I; However, in order to determine stamp duty on the instruments mentioned in Category 3, expertise is required in the devaluation.
The true market value is determined according to the availability of the Bombay stamps (determining the real value of the property) rules of 1995. The payment of a correct stamp duty on the instruments gives them legality. These instruments have the value of evidence and are admitted to the courts. Instruments that have not been properly stamped are not admitted into evidence. Until July 4, 1980, stamp duty was due on the basis of contractual value. However, due to the widespread use of dirty money in real estate transactions, the contractual value was used at a low value, which deprived the government of its legitimate taxes. To overcome this threat, the Maharashtra government introduced the concept of the market value of stamp duty on 4 July 1980 in order to increase its revenues and fill the revenue stream.