Correct Option (D)
Both Statement 1 and Statement 2 are incorrect.
Explanation
- Stamp duties on financial transactions, such as bills of exchange, promissory notes, and shares, are levied by the Union Government under Entry 91 of the Union List.
- However, these duties are collected and appropriated by the respective State Governments, as specified under Entry 63 of the State List.
- Therefore, Statement 1 is incorrect because the levy of these duties is by the Union, not the State.
- Statement 2 is incorrect because the appropriation of these duties is by the States, not the Union Government.
Incorrect Options
- Option (1) is incorrect because Statement 1 inaccurately attributes the levy of these duties to the State Government. The constitutional provision assigns the levy authority to the Union Government.
- Option (2) is incorrect because Statement 2 erroneously states that the Union Government appropriates these duties. The appropriation of these duties is constitutionally assigned to the State Governments.
- Option (3) is incorrect as both statements contain factual inaccuracies regarding the constitutional provisions for the levy, collection, and appropriation of stamp duties on financial transactions.