1.53     Query

Auditor’s Duties relating to Documents which are not

affixed with Revenue Stamp as per Indian Stamp Act.

(a)        In a tea company no revenue stamp is affixed while making payment of salaries and wages over Rs. 20 on the plea that it is superfluous and that it is in line with the present practice in the industry.

(b)        In a mercantile concern the officer’s salaries are paid both in cash and by cheque without obtaining the signatures on the revenue stamp on the plea that officers are conducting the administration and nobody will deny the actual disbursement of salary.

            Whether Indian Stamp Act is violated in the above cases.  If, yes, whether the auditors who certify the said accounts as true and fair are committing any negligence of duty which amounts to professional misconduct.

                                               Opinion                                                     April 5, 1979

The procedure to be followed and adopted for stamping instruments is governed by the Indian Stamp Act, 1899.  Various State Governments have modified the provisions of this Act in regard to their applicability to the respective States.  General provisions of the Act are that the documents not properly stamped when produced in evidence are impounded and the Collector determines the duty payable (Section 33).  Under Section 35 (b) of the Indian Stamp Act, 1899, a person tendering an unstamped receipt as evidence, against another who had to provide a stamped receipt but had not done so, could, by paying the penalty of one rupee, have the unstamped receipt admitted in evidence.  In view of the above, the committee feels that the auditor cannot be charged with neglect or misconduct since the true and fair nature of accounts is not vitiated by receipts remaining unstamped.

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