LexLIFE INSURANCE CORPORATION OF INDIA versus THE STATE OF RAJASTHAN AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
* Author [2024] 5 S.C.R. 241 : 2024 INSC 358 Life Insurance Corporation of India v. The State of Rajasthan and Ors. (Civil Appeal No. 3391 of 2011) 30 April 2024 [Pamidighantam Sri Narasimha* and Aravind Kumar, JJ.] Issue for Consideration Whether the Rajasthan Stamp Law (Adaptation) Act, 1952 or the Rajasthan Stamp Act, 1998 applies to the facts of the present case; whether the state government has the legislative competence to impose and collect stamp duty on policies of insurance as per Entry 91 of List I r/w Entry 44 of List III; whether the 1952 Act requires the purchase of insurance stamps from and payment of stamp duty to the Rajasthan government for insurance policies issued within the state; whether, in the facts of the present case, the appellant is liable to pay stamp duty. Headnotes Rajasthan Stamp Law (Adaptation) Act, 1952 – Rajasthan Stamp Rules, 1955 – Indian Stamp Act, 1899 – s.3; Schedule I – Rajasthan Stamp Act, 1998 – Constitution of India – Entry 44 of List III, Entry 91 of List I – Power of the State to levy and collect stamp duty on insurance policies executed within the State – Appellant issued various insurance policies within the State of Rajasthan however, purchased insurance stamps from the State of Maharashtra – Demand for payment of stamp duty by the State of Rajasthan – Validity: Held: State of Rajasthan has the power to impose and collect stamp duty on insurance policies under Entry 44 of List III, albeit such duty must be imposed as per the rate prescribed by a Parliamentary legislation under Entry 91 of List I – For the execution of insurance policies within the state of Rajasthan, the appellant is bound to purchase India Insurance Stamps and pay the stamp duty to the State of Rajasthan – s.3 of Indian Stamp Act, 1899 as adapted to the State of Rajasthan is the charging provision as per which the appellant must pay stamp duty to the state government on insurance policies executed within the state – The rate at which stamp duty is payable on policies of insurance under the 1952 Act has been 242 [2024] 5 S.C.R. Digital Supreme Court Reports adopted from Schedule I of the central Act, in accordance with Entry 91 of List I – The charging provision has thus been validly enacted by the state government under Entry 44 of List III – Therefore, the state government in the present case can impose stamp duty on the issuance of insurance policies within its territory and require the payment of such stamp duty by the appellant – Hence, the commencement of proceedings for recovery of stamp duty under the state law and the rules made thereunder was legal, valid, and justified – However, in the facts and circumstances of the present case, the state government shall not demand and collect the stamp duty as per the orders dtd.16.09.2004, 16.10.2004, 11.10.2004, 01.11.2004, and 28.10.2004 – Impugned judgment of the High Court affirmed. [Paras 16, 37, 31, 38] Rajasthan Stamp Law (Adaptation) Act, 1952 – Rajasthan Stamp Act, 1998 – s.3 – Insurance policies issued between 1993-94 to 2001-02 – Stamp duty leviable under the 1952 Act or the 1998 Act: Held: Stamp duty must be levied as per the law in force as on the date of execution of the instrument – The charging provision i.e. s.3 of the 1998 Act, imposed stamp duty on every instrument mentioned in the Schedule that is executed in the state on or after the date of commencement of the Act – 1998 Act came into force only on 27.05.2004 – Hence, at the time that the relevant instruments were executed, the 1952 Act was still in force and the stamp duty was leviable under the same. [Para 8] Rajasthan Stamp Law (Adaptation) Act, 1952 – ss.2, 3(v), (vi) – Application of Indian Stamp Act, 1899 – Adaptations – Schedule I of the 1899 Act – Rajasthan Stamp Rules, 1955 – rr.2 (d), 3 – Liability to pay stamp duty under the 1952 Act: Held: r.3, r/w r.2(d), provides that the stamps issued by the State government will indicate the payment of stamp duty chargeable on an instrument – Therefore, the stamp must be issued by and the stamp duty must be paid to the State government for an instrument to be ‘duly stamped’ under the 1952 Act – State has the power to collect stamp duty under s.3 of the Indian Stamp Act, 1899 as adapted to the state of Rajasthan that provides that an instrument shall be chargeable with the duty of the amount indicated in the Schedule if it is executed within the state of Rajasthan – The
Excerpt shown. Read the full judgment & AI analysis in Lexace.