E-STAMP AND ITS VALIDITY IN INDIA

E-stamping,being a convenient method to procure stamp paper online, is replacing the traditional methods of stamping. It was introduced to deal with the scams relating to the stamp papers. For instance, the famous Telgi scam where a person named Abdul Karim Telgi was involved in large scale manufacture, sale and circulation of fake stamps and stamp papers in various parts of India including Delhi, Chennai, Hyderabad, Chandigarh and Tiruchy.The stamp papers circulated by him looked authentic and real but in fact they weren’t.

E-stamp duty can be paid online through the website of Stock Holding Corporation of India Limited (SHCIL) and the e-stamp papers can be obtained from the Authorised Collection Centre. The e-stamp papers so procured are considered to be authentic and valid and its validity can be verified online by visiting the www.shcilestamp.com website and requesting for verification by clicking on ‘verify e-stamp certificate’. The client is required to provide necessary information relating to the e-stamp certificate like the name of the state where it was purchased, Certificate Number (UIN), State duty type or description of document, the date when the certificate was issued and the session code which is an alphanumerical code. The e-stamp paper can also be verified by scanning the bar code which is on the e-stamp paper.

Validity of Stamp Papers

Regarding the validity of the stamp papers it was a general notion that the stamp papers are valid only for a period of six months and expiry thereafter. But the Supreme Court of India has clarified this issue regarding the validity of the stamp papers in the case of Thiruvengada Pillai & Ors v. Navneethammai & Anr. Where it was held that:

  • The Indian Stamp Act, 1899 does not mention any time period for the use of a stamp paper.
  • It also held that section 54 of the Act merely provides that a person in possession of a stamp paper for which he has no immediate use (which is not spoilt or rendered unfit or useless), can collect refund of the value of the stamp paper by surrendering such stamp paper to the collector within six months from the date of purchase and not later than six months.
  • It further held that the time period of six months mentioned in section 54 of the Indian Stamp Act is not for the use of stamp paper but only for the purpose of collecting refund of the value of the unused stamp paper by surrendering that unused stamp paper.
  • 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.
According to Section 54 of the INDIAN STAMP ACT, 1899

When any person is possessed of a stamp or stamp which have not been spoiled or rendered unfit or useless for the purpose intended, but for which he has no immediate use, the Collector shall repay to such person the value of such stamp or stamps in money, deducting (ten paise) for each rupee or portion of a rupee, upon such person delivering up the same to be cancelled, and proving to the Collector’s satisfaction:

  • that such stamp or stamps were purchased by such person with a bona fide intention to use them
  • that he has paid the full price thereof
  • that they were so purchased within the period of six months next preceding the date on which they were so delivered: Provided that, where the person is a licensed vendor of stamps, the Collector may, if he thinks fit, make the repayment of the sum actually paid by the vendor without any such deduction as aforesaid.

In simpler terms, if a person in possession of a stamp paper which is not spoilt or which is not considered to be unfit for the purpose for which it was purchased and which is not of any immediate use to the person who has purchased the stamp paper with a genuine intention to use them by paying the full price and which is not older than six months from the date of their purchase, then the purchaser may deposit the stamp paper to the collector and collect the refund after the said deductions.

But, in the state of Maharashtra the situation is different as section 52B of the Maharashtra Stamp Act, 1958 says that any stamp paper which is purchased must be either used within a period of six months from the date of its purchase or if it remains unused and the purchaser does not deposit the stamp paper and collect the refund within six months the stamp paper would be treated as invalid and cannot be used for executing documents.

Cancellation of E-STAMP certificate

Similarly, unused or spoiled e-stamp certificate can be returned/cancelled online within in six months from the date of purchase. Few state governments provide for online refund. Citizens who purchased stamp papers online can apply for refund through the e-gras (Government Receipts Accounting System) portal and refund amount will be deposited to the bank account.

An application containing the details of e-stamp certificate, payment modes and reason for cancellation, must be submitted by the client requesting for cancellation. The application is then submitted along with the original e-stamp certificate to the competent authority which verifies the genuineness of the e-stamp certificate. After verification the E-stamp certificate is cancelled. It is the collector who has the power to cancel the e-stamp certificate and refund the amount after deducting the cancellation charges. The fact that the e-stamp certificate is cancelled must be endorsed on the e-stamp certificate by the controller along with his sign and seal.

To conclude, Stamp papers do not have any time limit or expiry period and can be used any time when the need arises but it must be noted that when a stamp paper is purchased for a particular purpose for instance a lease agreement, it cannot be used for any other purpose other than for executing a lease agreement. The stamp papers that are older than six months are valid to be used for drafting documents and agreements and section 54 of the Indian Stamp Act only restricts the purchaser from taking refund by depositing the unused stamp paper after six months of its purchase but does not restrict the use of the same.