Sections 43-45 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Three consecutive sections close the impounding chapter's money questions. Section 43 says paying a penalty does not by itself bar a prosecution. Section 44 lets the person who paid duty or penalty recover it from the person who was bound to bear the cost. Section 45 lets the Chief Controlling Revenue-authority refund penalty or excess duty on written application within stated periods.
Section 43: taking proceedings or paying a penalty under Chapter IV does not bar prosecution for an offence against the Stamp-law, but where a penalty has been paid no prosecution is instituted unless the Collector thinks the offence was committed with an intention of evading payment of the proper duty. Section 44: a person who has paid duty or penalty under section 35, 37, 40 or 41 can recover it from the person bound to bear the expense of the stamp, by agreement or under section 29 or another enactment; a Collector's certificate is conclusive, and the amount may be included in an order as to costs. Section 45: the Chief Controlling Revenue-authority may refund a penalty on written application within one year from the date of payment, and any excess duty on application within three months of the order charging it.
About these sections
This article follows the consolidated text of the Act consulted (latest amendment shown: Act 13 of 2021); later amendments should be checked. Stamp duty on most instruments is fixed by the law and schedule of the State where the instrument is executed, so the State of execution must be checked. This article explains the central Act only. Periods and amounts are quoted as printed. If you have paid a penalty and are considering recovery or refund, our legal dispute resolution team can look at the time limits that apply to you.
The sections sit in Chapter IV after the endorsement rule in Section 42. The site's short guide on consequences of not paying stamp duty gives the outline.
Section 43: prosecution is not barred by payment of penalty
The rule
"The taking of proceedings or the payment of a penalty under this Chapter in respect of any instrument shall not bar the prosecution of any person who appears to have committed an offence against the Stamp-law in respect of such instrument." Chapter IV is the chapter on instruments not duly stamped. So an impounding, or the payment of a penalty to get an instrument admitted, does not by itself end the possibility of a prosecution.
The proviso
"No such prosecution shall be instituted in the case of any instrument in respect of which such a penalty has been paid, unless it appears to the Collector that the offence was committed with an intention of evading payment of the proper duty."
So the position has two layers.
| Situation | Prosecution |
|---|---|
| Proceedings taken, but no penalty paid | Not barred |
| Penalty paid under Chapter IV | Not barred in principle, but not instituted unless it appears to the Collector that the offence was committed with an intention of evading payment of the proper duty |
The offences themselves are in Chapter VII (for example Section 62, whose own proviso allows a penalty already paid to be set off against a fine). Section 61(4) also lets the Collector prosecute "notwithstanding anything contained in ... section 43" after a court's declaration; see Section 61.
Section 44: recovering duty or penalty from the person who should have borne it
Sub-section (1): the right of recovery
The right arises when:
- duty or penalty has been paid under section 35, 37, 40 or 41, by a person in respect of an instrument; and
- "by agreement or under the provisions of section 29 or any other enactment in force at the time such instrument was executed, some other person was bound to bear the expense of providing the proper stamp".
Then "the first-mentioned person shall be entitled to recover from such other person the amount of the duty or penalty so paid". The test of who was bound to bear the expense is taken at the time the instrument was executed. For the default allocation in the Act see Section 29.
Sub-section (2): the certificate
"For the purpose of such recovery, any certificate granted in respect of such instrument under this Act shall be conclusive evidence of the matters therein certified." The words are wide: any certificate granted in respect of the instrument under the Act, including the endorsement described in section 42, is conclusive for this purpose.
Sub-section (3): costs
"Such amount may, if the Court thinks fit, be included in any order as to costs in any suit or proceeding to which such persons are parties and in which such instrument has been tendered in evidence. If the Court does not include the amount in such order, no further proceedings for the recovery of the amount shall be maintainable."
The second sentence is the one to note. If the court does not include the amount in the order as to costs, the right to recover is not to be pursued in further proceedings. The recovery is therefore tied to the suit in which the instrument was tendered.
Example
Nisha Rao takes a lease from Arvind Kapoor. By their agreement, Arvind (the lessor) was to bear the cost of the stamp, but he did not provide it. When Nisha tenders the lease in a suit, the court admits it on duty and a penalty under section 35, and Nisha pays. Under section 44(1) she may recover the amount from Arvind, the certificate of payment is conclusive evidence of the sums, and the court may include the amount in its order as to costs. If the court does not, no further proceedings for recovery are maintainable.
Section 45: refund by the Chief Controlling Revenue-authority
Sub-section (1): penalty
"Where any penalty is paid under section 35 or section 40, the Chief Controlling Revenue-authority may, upon application in writing made within one year from the date of the payment, refund such penalty wholly or in part."
Sub-section (2): excess duty
"Where, in the opinion of the Chief Controlling Revenue-authority, stamp-duty in excess of that which is legally chargeable has been charged and paid under section 35 or section 40, such authority may, upon application in writing made within three months of the order charging the same, refund the excess."
| Sub-section | What is refunded | Application | Time limit |
|---|---|---|---|
| 45(1) | Penalty paid under section 35 or 40, wholly or in part | In writing | Within one year from the date of the payment |
| 45(2) | Duty in excess of that legally chargeable, charged and paid under section 35 or 40 | In writing | Within three months of the order charging it |
The two periods differ and should not be confused. Both powers say "may", so refund is at the authority's discretion.
Section 45 is distinct from the Collector's own power to refund penalty above five rupees after a copy is sent under section 38(1), which is dealt with in Sections 38, 39 and 46. It is also distinct from the allowances for spoiled and unused stamps in Chapter V; see the site's guide on allowance and refund of stamp duty.
Checklist
- Note the date of payment: the one-year period in section 45(1) runs from it.
- Note the date of the order charging the duty: the three months in section 45(2) run from that order.
- If you paid but another person was bound to bear the cost, check the agreement and section 29, and raise the recovery in the suit where the instrument was tendered.
- If a penalty has been paid, remember that prosecution may still be possible where the Collector considers there was an intention to evade duty.
Need help with recovery or refund?
The periods in section 45 are short, and a claim under section 44 depends on what was agreed and on the suit in which the instrument was tendered. Our legal dispute resolution team can help you plan the application and the claim.
Key takeaways
- Paying a penalty under Chapter IV does not bar a prosecution, but where a penalty has been paid the prosecution is not instituted unless the Collector thinks there was an intention to evade the proper duty.
- A person who paid duty or penalty under section 35, 37, 40 or 41 may recover it from the person bound to bear the expense of the stamp.
- A certificate under the Act is conclusive evidence for the recovery, and the amount may be included in an order as to costs; if not included, no further recovery proceedings are maintainable.
- Penalty paid under section 35 or 40 may be refunded by the Chief Controlling Revenue-authority on written application within one year of payment.
- Excess duty paid under section 35 or 40 may be refunded on application within three months of the order charging it.
Read next
- Section 29 of the Indian Stamp Act, 1899: who bears the stamp duty
- Section 62 of the Indian Stamp Act, 1899: penalty for executing an instrument not duly stamped
- Sections 47 and 48 of the Indian Stamp Act, 1899: payer stamping unstamped bills and recovery of duties
- Allowance and refund of stamp duty
Disclaimer: Based on the consolidated text of the Indian Stamp Act, 1899 published by the Department of Revenue, whose latest amendment shown is Act 13 of 2021, as consulted on 2 October 2026. Only the central text is covered: stamp duty on most instruments is fixed by the law and schedule of the State where the instrument is executed, and State amendments, rules, notifications and later amendments should be checked. This article is general information, not legal advice; check the official text before acting.