No Discretion on Penalty Under Karnataka Stamp Act: Supreme Court Mandates 10× Deficit Duty

In a significant ruling on the interpretation of fiscal statutes, the Supreme Court has held that courts have no discretion to reduce the statutory penalty below ten times the deficient stamp duty under the Karnataka Stamp Act, 1957. The Court clarified that when an insufficiently stamped document is sought to be admitted in evidence under the first proviso to Section 34, the imposition of penalty equal to ten times the deficit duty is mandatory and leaves no scope for judicial leniency. The judgment arose from a dispute where the High Court had allowed payment of deficient duty while waiving the penalty, a decision the Supreme Court set aside as contrary to the statutory mandate. The Court emphasized that while deficiency in stamp duty is a curable defect, the method chosen for curing it determines the penalty framework—if the party opts to pay duty before the court, the 10× penalty is compulsory; however, if the document is sent to the Deputy Commissioner, discretion in penalty may apply under a different provision. Ultimately, the ruling reinforces strict statutory compliance, clarifies procedural options under the Act, and underscores that courts cannot dilute legislatively mandated penalties in the name of equity or discretion.