In Brief
State of U.P. sought to collect stamp duty on land exchanges between real estate companies who had purchased land in Ghaziabad. The exchanges were permitted under Section 161 of the U.P. Zamindari Abolition and Land Reforms Act, involving no consideration and no formal instrument. The Additional Collector issued show cause notices demanding stamp duty under the Indian Stamp Act. The High Court quashed the notices. The Supreme Court upheld that judgment, holding that land exchanges without consideration or instruments under Section 161, once authorized by the State, fall outside the Stamp Act and do not attract stamp duty. The show cause notice was patently illegal.
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