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Section 43: Prosecution for offence against Stamp-law

Indian Stamp Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1899
Section 42 All 78 Sections Schedule I (Arts 1–65) Section 44

Legal Commentary & Landmark Judgments: Section 43

Section 43 of the Indian Stamp Act, 1899 regulates the relationship between civil penalty proceedings and criminal prosecution for stamp offences, prohibiting criminal prosecution where civil penalties have been paid unless the Collector establishes a deliberate fraudulent intent to evade stamp duty.

  • Preservation of Criminal Liability [Section 43 Main Clause]: Provides that taking civil proceedings or payment of a penalty under Chapter IV (Sections 33-42) does not per se bar criminal prosecution of any person who has committed an offence against the Stamp Act (e.g., under Sections 62-68).
  • Statutory Shield for Bona Fide Executants [Section 43 Proviso]: Proviso imposes a mandatory condition precedent: no prosecution shall be instituted in respect of an instrument where a penalty has been paid, unless it appears to the Collector that the offence was committed with the specific intention of evading payment of proper duty.
  • Mens Rea Requirement: Criminal proceedings under Chapter VII cannot be launched automatically or mechanically; establishing mens rea (fraudulent intent to defraud the revenue) is an indispensable statutory prerequisite once civil penalties are discharged.
Key Landmark Precedents:
  • Trustees of H.C. Dhanda Trust v. State of M.P. (2020) 9 SCC 510: The Supreme Court highlighted that the scheme of Section 43 proviso clearly distinguishes between innocent or negligent stamping deficiencies and intentional evasion of stamp duty, reserving criminal prosecution exclusively for contumacious evasion.
  • Queen-Empress v. Rahmat (1896) ILR 18 All 116: The High Court affirmed that where an executant has paid the penalty imposed under the Stamp Act, criminal prosecution under Section 62 or 68 cannot be sustained without a distinct finding by the Collector recording that the act was accompanied by an intention to defraud the revenue.
Courtroom Practice & Strategic Litigation Guidance:

If a Collector or revenue officer threatens criminal prosecution under Section 62/64 alongside an impounding order, pay the deficit duty and penalty assessed under Section 40, and immediately invoke the Section 43 proviso. Plead that discharge of civil penalties bars prosecution absent a speaking order demonstrating fraudulent mens rea, and challenge any mechanically issued show-cause notice via Section 482 CrPC / Article 226 petition.

Section 42 All 78 Sections Schedule I (Arts 1–65) Section 44