In Brief
The Trustees of H.C. Dhanda Trust challenged the Collector of Stamps' imposition of a ten-fold penalty under the Indian Stamp Act for unduly stamping a deed. The deed was wrongly described as a 'Deed of Assent' (lower duty) instead of a 'Deed of Transfer' (higher duty), suggesting deliberate evasion. The Supreme Court held that while the maximum penalty of ten times is discretionary, it must be exercised reasonably—not automatically. Where evasion is established but the conduct lacks dishonesty or contumacy, a lower penalty is justified. The Court reduced the penalty to five times the deficiency, allowing the appeal.
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