LAHORE: Legal objections from the quarters concerned have intercepted the promulgation of an ordinance aimed at amending the Stamp Act, 1899 to introduce some harsh steps in it in the last few days of the PML-N Punjab government.

The proposed amendments were also aimed at increasing the amount of stamps and fines manifold.

According to official sources on Sunday, the legal assessment of the draft ordinance found it harsh, illegal and impracticable. The draft ordinance had been sent back to the department concerned for correction, sources said.

The draft of the proposed ordinance mentioned that it aimed at making Stamp Act, 1899 compatible with the requirements of the modern techniques to empower the collector of the district to obtain necessary information, instrument, and to compel the public offices to produce the record for audit as per requirement, to decentralise the powers of the chief revenue authority relating to taxation, to levy stamp duty on transfer of right or interest relating to an immovable property or acknowledgment of such transfer by a development authority, cooperative housing society, etc.

It was also framed to eradicate malpractices and to stop leakage of stamp duty by housing societies. “For that purpose the rates of penalties are proposed to be rationalized/enhanced, to bring the issuance of stamp papers through e-stamping system required for the instruments of contract and to bring conformity in this Act and the Land Revenue Act, and to delete the redundant provisions,” the draft said.

Where the value of immovable property stated in an instrument to which sub-section (1) applies is more than the value fixed according to the valuation table, the value declared in the instrument shall be accepted as value for the purposes of stamp duty.

One of the legal objections is that in a proposed new section, the BoR is assigned the functions to prescribe the mode of payment of stamp duty with which an instrument is chargeable. On the other hand, it is the provincial government to do so under the same law. Therefore, the proposed amendment is in clash with another section of the same law.

One amendment is aimed at defining “public office”. But under the law this can be done only by the provincial government.

The proposed definition of “approved building plan”, “covered area” and “recording or attesting authority” too is unnecessary since they appear to be contemplating ordinary dictionary meaning except that the action is suggestive of being taken by a local government or a housing authority or development society.

Another proposed amendment presupposes a public officer to recover deficient stamp duty and makes that officer responsible to pay that duty along with the penalty when he fails in his duty. The existing section 33 of the Act is sufficient to deal with the issue.

Making the public office liable for stamp duty along with the penalty has serious administrative implications. Such an officer is however amenable to disciplinary action under the PEEDA Act, 2006. Even the action proposed is not legally possible as an official cannot be punished unless found guilty of the charge against him through some inquiry against him. A public officer may be a judge/ presiding officer of the court. The amendment would involve him as well which may be opposed to the Judicial Officers Protection Act, 1850 (XVIII of 1850).

Another amendment also burdens the district collector with the liability for any such pecuniary loss to the public exchequer. This too has serious administrative implications and even a defaulting district collector remains amenable to disciplinary action under the PEEDA Act, 2006. Even the action proposed is not legally possible as an officer cannot be punished unless found guilty of the charge against him in some inquiry.

A new section relates to freezing of bank accounts or sealing of premises (for default in payment of the stamp duty). Freezing of bank accounts is not legally possible because banks are not under the province. Sealing of premises amounts to its attachment. Both these actions without any grant of hearing to the defaulter would be against the principles of natural justice.

Another section proposes imprisonment which may extend to three years or with fine which may extend to Rs500,000 for a public officer failing to comply with the provisions of the Act. In the first place, relevant provisions of the Pakistan Penal Code would be attracted and secondly the punishment is very harsh.

Published in Dawn, May 28th, 2018