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Section 68: Penalty for post-dating bills, and for other devices to defraud the revenue

Indian Stamp Act • Official Statutory Text & Practice Guide

Statutory Regulation
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Competent Court / Tribunal
Act 1899
Section 67 All 78 Sections Schedule I (Arts 1–65) Section 69

Legal Commentary & Landmark Judgments: Section 68

Section 68 functions as the primary criminal anti-evasion provision of the Stamp Act, penalizing the fraudulent post-dating of bills of exchange and criminalizing any willful device, contrivance, or false statement designed to defraud the State of stamp duty.

  • Fraudulent Post-Dating of Bills: Under clause (a), penalizes post-dating any bill of exchange or promissory note with intent to evade duty, making it appear payable after date rather than on demand to pay lower stamp duty.
  • Suppression of Material Facts under Section 27: Under clause (b), penalizes executing an instrument without setting forth fully and truly all the facts and circumstances required by Section 27 (such as actual consideration, property valuation, or prior encumbrances).
  • Catch-All Anti-Fraud Provision: Under clause (c), penalizes any person who employs any fraudulent act, contrivance, or device not specially provided for by the Act, with intent to defraud the Government of stamp duty.
  • Severe Penal Consequence: Punishable with a criminal fine which may extend to one thousand rupees (substantially enhanced by several state amendments to include imprisonment).
Key Landmark Precedents:
  • Government of A.P. v. P. Laxmi Devi, (2008) 4 SCC 720: The Supreme Court highlighted that Section 68 r/w Section 47A and Section 27 forms the statutory triad designed to crush sophisticated devices and fraudulent undervaluations employed to cheat the public revenue in real estate transactions.
  • State of U.P. v. Ambrish Tandon, (2012) 5 SCC 566: A 2-Judge Bench of the Supreme Court held that while the State has power to penalize deliberate suppression of facts, an innocent difference of opinion regarding residential versus commercial land use does not constitute a fraudulent device under Section 68 in the absence of willful concealment.
  • Harcharan Singh v. State of Punjab, AIR 1978 P&H 15: The Punjab & Haryana High Court held that mens rea is an indispensable statutory ingredient under Section 68; the prosecution must establish beyond reasonable doubt that the omission to disclose facts was animated by a deliberate intention to evade duty.
Courtroom Practice & Strategic Litigation Guidance:

When defending clients against notices or prosecutions under Section 68 alleging property undervaluation, dismantle the allegation of 'fraudulent device' by proving that the consideration stated reflected the circle rate or actual banking transaction. Emphasize *State of U.P. v. Ambrish Tandon* to establish that valuation disagreements are matters of civil adjudication under Section 47A, not criminal offences under Section 68, unless forged construction receipts or sham agreements are proven.

Section 67 All 78 Sections Schedule I (Arts 1–65) Section 69