Advertising Agencies Association of India v. State of Maharashtra
(2017) 1 AIR Bom R 1
In the High Court of Bombay
WP 2006/2008
Before Justice S.C. Dharmadhikari and Justice B.P. Colabawala
Decided on October 27, 2016

Relevancy of the Case: Inclusion of attribution of electronic records in the ambit of terms “signs” and “signed” under the Maharashtra Stamp Act, 1958

Statutes and Provisions Involved

• The Maharashtra Stamp Act, 1958 (Section 2(h), 2(i), 2(l))
• The Information Technology Act, 2000 (Section 2, 11)
• The Constitution of India, 1950 (Article 226)

Relevant Facts of the Case

• The State Government amended the existing Stamp Act to include advertisements for promoting products and events.
• The petitioners requested the State Government to withdraw the amendment. However, they did not receive any response from the government.
• Later, some members of the petitioner association received notice from the Collector of Stamps to pay the stamp duty on advertisement agreements.
• Therefore, the petitioners have filed this writ petition as they are aggrieved by the adverse effects this amendment may cause.

Prominent Arguments by the Advocates

• The petitioner’s counsel stated that stamp duty is imposed on instruments related to advertisements in mass media. Also, the petitioners demonstrated a direct adverse effect, and they do not need empirical data to prove it.
• The counsel further argued that the power to tax is within the wider powers of the Union and not in the hands of the state. The state’s power to tax is within the ambit of Entry 55 in List II.
• The respondent’s counsel submitted that stamp duty is on the instrument and not the underlying transaction. Item 5(h)(A) in Schedule I of the Stamp Act relates to an agreement for any mass media made to promote any product or event to make profits. Therefore, the Act levies and collects the stamp duty on contractual agreements relating to advertisements in mass media and not the advertisement itself.
• The respondent’s counsel further argued that the power to impose stamp duty is available to both the Union and State by virtue of Entry 44, List III.

Opinion of the Bench

• The bench refers to the definitions of duly executed, executed, execution, and instrument under the Maharashtra Stamp Act, 1958.
• The terms signed and signature also include the attribution of electronic records, as per Section 11 of the Information Technology Act, 2000.
• Further, the term document includes electronic records, as per Section 2(1)(t) of the Information Technology Act, 2000.

Final Decision

• Eventually, the bench dismissed the petition.