Karnataka High Court
Prestige Exora Business Parks Limited vs State Of Karnataka on 6 August, 2025
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WA No. 401 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 6TH DAY OF AUGUST, 2025
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE C M JOSHI
WRIT APPEAL NO. 401 OF 2025 (GM-ST/RN)
BETWEEN:
1. PRESTIGE EXORA BUSINESS PARKS LIMITED
REPRESENTED BY MR. MANOJ KRISHA JV
HAVING ITS REGISTERED OFFICE AT PRESTIGE
FALCON TOWER, NO.19, BURNTON ROAD,
BANGALORE-560 025 KARNATAKA
...APPELLANT
Digitally (BY SRI. SAJI P. JOHN, ADVOCATE)
signed by
SUMATHY
KANNAN AND:
Location:
High Court of
Karnataka
1. STATE OF KARNATAKA
REPRESENTED BY PRINCIPAL SECRETARY, REVENUE
DEPARTMENT, STAMPS AND REGISTRATION
ROOM NO. 505, 5TH FLOOR, GATE NO.3, MS BUILDING,
DR. B.R. AMBEDKAR VEEDHI,
BANGALORE 560 001
2. THE INSPECTOR GENERAL OF REGISTRATION AND
COMMISSIONER OF STAMPS
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WA No. 401 of 2025
HC-KAR
8TH FLOOR, KANDAAYA BHAVAN,
KG ROAD, BENGALURU 560001
3. THE DISTRICT REGISTRAR OF STAMPS AND
REGISTRATION OF SHIVAJINAGAR,
REGISTRATION DISTRICT
4TH FLOOR, MONARCH CHAMBER,
NO. 122/2, INFANTRY ROAD,
BANGALORE 560 001
...RESPONDENTS
(BY SRI. S.H. RAGHAVENDRA, AGA)
THIS WRIT APPEAL FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO a) SET ASIDE THE IMPUGNED
JUDGEMENT IN WRIT PETITION No. 5031 OF 2023 (GM-ST/RN)
VIDE ORDER DATED 27.01.2025; b) PASS SUCH OTHER
AND/OR FURTHER ORDERS, AS THIS HONBLE COURT MAY
DEEM FIT AND PROPER IN THE FACTS AND
CIRCUMSTANCES OF THE CASE.
THIS APPEAL, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN
AS UNDER:
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WA No. 401 of 2025
HC-KAR
CORAM: HON'BLE MR. VIBHU BAKHRU ,CHIEF JUSTICE
AND
HON'BLE MR. JUSTICE C M JOSHI
ORAL JUDGMENT
(PER: HON'BLE MR. VIBHU BAKHRU,CHIEF JUSTICE)
1. The appellant has filed the present intra-court appeal, impugning an order dated 27.01.2025 [impugned order] passed by a learned Single Judge of this Court in W.P.No.5031/2023 (GM- ST/RN).
2. The appellant had filed the said petition captioned 'Prestige Exora Business Parks Limited v. State of Karnataka & Others', inter alia, assailing an order dated 03.12.2022 passed by respondent No.3 [District Registrar of Stamps and Registration], to the limited extent that the said order imposed cess/additional stamp duty amounting to ₹2.5 crores, being 10% of the maximum stamp duty of ₹25 crores. The appellant had discharged the levy of the said additional stamp duty/cess and accordingly claimed refund of the same along with interest at the rate of 12% per month, from date of payment - that is, from 01.02.2023 - till the date of repayment. -4-
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3. The learned counsel for the appellant contended that the maximum stamp duty payable under the Karnataka Stamp Act, 1957 [Act] on the Scheme of Arrangement under Sections 230-232 of the Companies Act, 2013, is ₹25 crores. Therefore, the demand of additional stamp duty over and above the maximum amount, was contrary to law. The learned Single Judge had not accepted the said contention and had found that additional duties as imposed under Section 3B of the Act, are in addition to the stamp duties as specified under the schedule to the Act. Prefatory facts
4. The appellant is a Company incorporated under the Companies Act, 2013. It is inter alia engaged in the business of planning, setting-up, developing, building, owning, constructing, operating, maintaining business parks, industrial parks, software technology parks complete with all facilities.
5. The appellant Company and a company named 'Pluto Cessna Business Parks Private Limited', had proposed a Scheme of Arrangement for demerger of Exora Business Park along with -5- NC: 2025:KHC:30609-DB WA No. 401 of 2025 HC-KAR the CAM Business, on a going concern basis. The said Scheme of Arrangement between the appellant [Demerged / Transferor Company], and Pluto Cessna Business Parks Private Limited [Resulting / Transferee Company], as well as their shareholders and creditors, was approved by National Company Law Tribunal [NCLT] in terms of the order dated 22.04.2022.
6. In terms of the said scheme, Exora Business Park along with the CAM Business, was demerged from Prestige Exora Business Park Limited and vested with Pluto Cessna Business Parks Private Limited as a going concern basis.
7. It is the appellant's case that the order of approval passed by the NCLT is a "Conveyance" within the meaning of Section 2(d) of the Act. There is no cavil that the stamp duty as stipulated under Article 20(4) of the Schedule to the Act, is payable on the said instrument of conveyance.
8. The appellant filed an affidavit of stamp duty along with Schedule of Assets transferred under the said Scheme before the NCLT on 07.10.2022. It also filed the said affidavit along with -6- NC: 2025:KHC:30609-DB WA No. 401 of 2025 HC-KAR Schedule of Assets and the order passed by the NCLT before respondent No.3, for adjudication, on 08.10.2022.
9. Thereafter, on 10.10.2022, respondent No.3 directed the appellant to obtain a valuation of movable properties from Technical Consultancy Services Organisation Karnataka [TECSOK]. According to the appellant, the maximum stamp duty payable was ₹25 crores, which was attracted in this case. Thus, the appellant filed a representation seeking exemption from valuation of movable assets, from TECSOK.
10. In the meanwhile the valuation report from TECSOK was received by the appellant on 01.12.2022. The same was also forwarded by TECSOK to respondent No.3. Thereafter, the proceedings for adjudication of the stamp duty, culminated in respondent No.3 passing an order dated 03.12.2022 adjudicating the stamp duty payable at ₹25 crores, and 10% additional cess / stamp duty under Section 3B of the Act, at ₹2.5 crores. Thus, respondent No.3 adjudicated the aggregate duty payable at ₹27.50 crores (stamp duty ₹25 crores plus Additional duty under Section 3B of the Act at ₹2.5 crores).
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11. The appellant deposited the aforesaid amount of ₹27.50 crores and furnished the e-stamp paper to NCLT. Thereafter, the appellant filed the aforementioned writ petition being W.P.No.5031/2023 (GM-ST/RN), impugning the order dated 03.12.2022 passed by respondent No.3.
12. The appellant assailed the adjudication order on essentially two grounds. First that the additional stamp duty / cess imposed in terms of Section 3B of the Act was proposed on immovable property and therefore, such imposition was not applicable on the order approving the Scheme of Arrangement under Sections 230 - 232 of the Companies Act, 2013. And, second, that the maximum duty payable under Article 20(4)(i) & (ii) of the Schedule was ₹25 crores and therefore, no further additional cess or stamp duty could be imposed. The learned Single Judge rejected the writ petition in terms of the impugned order, which is assailed in the present appeal.
Submissions
13. Learned counsel appearing for the appellant contended that Section 3 of the Act is a charging section and the stamp duty -8- NC: 2025:KHC:30609-DB WA No. 401 of 2025 HC-KAR payable under the charging section is prescribed in the Schedule to the Act. He submitted that in terms of Article 20(4) of the Schedule to the Act, maximum duty payable is fixed at ₹25 crores and therefore, any levy over and above the said amount is beyond the scope of the charging section under the Act. Reasons and Conclusion
14. Before proceeding further, it would be relevant to refer to Sections 3, 3B and 3C of the Act. The same are set out below:
"3. Instruments chargeable with duty.- Subject to the provisions of this Act and the exemptions contained in the Schedule, the following instruments shall be chargeable with duty of the amount indicated in that schedule as the proper duty therefor, respectively, that is to say, --
(a) every instrument mentioned in that schedule which, not having been previously executed by any person, is executed in the territories of the State of Karnataka on or after the commencement of this Act; and
(b) every instrument mentioned in that schedule which, not having been previously executed by any person, is executed out of the State of Karnataka on or after that day, relates to any property situate, or to any matter or thing done -9- NC: 2025:KHC:30609-DB WA No. 401 of 2025 HC-KAR or to be done, in the territories of the State of Karnataka and is received in the territories of the State of Karnataka:
Provided that no duty shall be chargeable in respect of,--
(1) any instrument, executed by, or on behalf of, or in favour of, the State Government in cases where, but for this exemption, the State Government would be liable to pay the duty chargeable in respect of such instrument;
(2) any instrument for sale, transfer or other disposition, either absolutely or by way of mortgage or otherwise, of any ship or vessel, or any part, interest, share or property of or in any ship or vessel registered under the Merchant Shipping Act, 1958.
[Explanation.- Where no proper duty has been paid on the original of an instrument which is chargeable with an amount indicated in the Schedule as proper duty therefor, then a copy of such instrument whether certified or not and whether a facsimile image or otherwise of the original shall be chargeable with duty of an amount which is indicated in Schedule as proper duty for the original of such instrument, and all the provisions of this chapter and Chapters IV, VI, VII and VIII of this Act shall mutatis mutandis be applicable to such copy of the original.] 3-B. Certain instruments chargeable with additional duty.-- (1) Any instrument of conveyance exchange, settlement, gift or lease in perpetuity of
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NC: 2025:KHC:30609-DB WA No. 401 of 2025 HC-KAR immovable property chargeable with duty under Section 3 read with articles of the schedule shall be chargeable with additional duty at the rate of ten per cent, on such duty chargeable on such instrument of conveyance, exchange, gift, settlement and lease in perpetuity, for the purpose of various infrastructure projects across the State, equity investment in the Bangalore Mass Rapid Transport Limited and for Mukhya Manthri Grameena Rasthe Abhivruddhi Nidhi in the proportion of 57:28:15 respectively.
(2) The additional duty chargeable under sub-section (1) shall be in addition to any duty chargeable under Section 3.
(3) Except as otherwise provided in sub-section (1) provisions of this Act, shall so far as may be apply in relation to the additional duty chargeable under sub-section (1) as they apply in relation to the duty chargeable under Section 3.
3-C. Limit on levy of additional stamp duty.-- Notwithstanding anything contained in any other law for the time being in force, no instrument shall be charged with any duty in the form of additional stamp duty under such other law, exceeding the maximum amount of duty with which such instrument is chargeable under this Act."
15. The stamp duty payable under Section 3 of the Act, is set out in Schedule to the Act. The relevant extract of Article 20 of the Schedule, is reproduced below:
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NC: 2025:KHC:30609-DB WA No. 401 of 2025 HC-KAR Art.20 (1) For Conveyance.-- As defined by clause (d) of Section 2, not being a transfer charged or exempted under No.52, on the market value of the property which is the subject- xxx xxx xxx matter of conveyance.
xxx xxx xxx xxx xxx xxx (4) if relating to an order made by the High Court [or appropriate Tribunals or appropriate Authorities under the Companies Act, 2013] in respect of.--
Five percent on the market value of
(i) Amalgamation of Companies, the property of the transferor including a subsidiary amalgamating company, located within the State of with parent company Karnataka and transferred to the transferee company. or [An amount equal to five percent] of the aggregate value of shares issued or allotted in exchange, or otherwise and in case of a subsidiary company, shares merged (or cancelled) with parent company and in addition, the amount of consideration if any, paid for such amalgamation; whichever is higher [subject to a maximum of rupees twenty five crores].
Five per cent on the market value of the property of the transferor
(ii) Reconstruction or Demerger of a company, located within the State of company Karnataka, and transferred to the resulting company; or An amount equivalent to Five per cent of the aggregate value of shares issued or allotted to the resulting company and in addition, the amount of consideration if any, paid for such demerger or reconstruction; whichever
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NC: 2025:KHC:30609-DB WA No. 401 of 2025 HC-KAR is higher [subject to a maximum of rupees twenty-five crores.
Exemption.-- Amalgamation of sick Explanation-- The term, "aggregate companies with others, under the value of shares" for the purpose of orders of Board of Industrial Finance Article 20(4) means, the face value of and Reconstruction (BIFR) shares or its market value, whichever is higher.
16. As noted above, there is no dispute that Article 20(4) of the Schedule is applicable and the stamp duty stipulated therein is payable on the order approving the Scheme of Arrangement. The appellant had also declared the value of the assets, which are the subject matter of the undertaking being demerged, as follows:
Particulars Amount
Movable Assets 22,60,47,237/-
Immovable Assets 11,12,73,87,100/-
Total 11,35,34,34,337/-
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17. The stamp duty computed at 3% of the market value of the properties transferred, as stipulated under Article 20(4) of the Schedule to the Act, exceeded ₹25 crores, undisputedly the maximum amount of ₹25 crores.
18. The contention that no further amount could be imposed as stamp duty in view of the Schedule stipulating the maximum amount of ₹25 crores, is unmerited. The duty chargeable under Section 3 of the Act is the amount as indicated in the Schedule to the Act. However, Section 3B of the Act contemplates an additional duty over and above the duty chargeable under Section 3 of the Act. This is expressly stated in sub-section (2) of Section 3-B of the Act. Thus, the assumption that the additional duty chargeable under Section 3B(1) of the Act is subsumed within the maximum amount of ₹25 crores as set out in Article 20(4)of the Schedule to the Act, is unsustainable. As the opening sentence of Section 3 of the Act indicates that the duty chargeable under Section 3 is set out in the Schedule to the Act. The Schedule does not set out the additional duty chargeable under Section 3-B of the Act.
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19. Section 3B(1) of the Act stipulates an additional duty at the rate of 10 per cent on such duty chargeable on such instrument of conveyance, exchange, gift, settlement and lease in perpetuity. There is also no dispute that duties under Section 3B of the Act are chargeable as the appellant has expressly averred in his appeal that "the order of the NCLT is a 'conveyance' within the meaning of Section 2(d) of the Karnataka Stamp Act, 1957."
20. The contention canvassed by the appellant that the maximum duty includes the additional duty under Section 3B of the Act, militates against a plain language of sub-section (2) of Section 3B of the Act. The same expressly provides that the additional duty chargeable under sub-section (1) of Section 3B of the Act is in addition to the duty chargeable under Section 3 of the Act.
21. The impugned order indicates that the appellant had also contended before the learned Single Judge that Section 3C of the Act, limits the additional stamp duty to the maximum amount of duty as stipulated. This contention has been rightly rejected by the learned Single Judge. Section 3C of the Act begins with a non- obstante clause. However, the scope of that clause is to curtail the
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NC: 2025:KHC:30609-DB WA No. 401 of 2025 HC-KAR stamp duty payable under any other law to the maximum amount of duty which is chargeable under the Act. The duty chargeable under the Act would include not only the stamp duty as imposed under Section 3 of the Act, but also the additional duty as levied under Section 3B of the Act. The non-obstante provision of Section 3C must be read in terms of the said provision.
22. In a recent decision in Mohd. Abdul Samad v. State of Telangana : (2025) 2 SCC 49, the Supreme Court has observed as under:
"82. A non obstante clause is usually appended to a section in the beginning with a view to give the enacting part of the section, in case of a conflict, an overriding effect over the provision or the Act mentioned in the non obstante clause. In other words, in spite of the provision or the Act mentioned in the non obstante clause, the enactment following it will have its full operation or that the provisions embraced in the non obstante clause will not be an impediment for the operation of the enactment. Thus, a non obstante clause is a legislative device used by a Parliament or legislature sometimes to give an overriding effect to what has been specified in the enacting part of a section in case of a conflict with what is contained in the non obstante clause as stated above."
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23. Thus, the non obstante clause has an overriding effect over the provision that is mentioned in the said clause. It is clear that non obstante clause of Section 3C of the Act limits the scope of the non obstante clause to limit the additional stamp duty under "any other law for the time being in force" to "the maximum amount of duty with which the instrument is chargeable under this Act." Section 3C of the Act cannot be read as in curtailing or limiting the duties as chargeable under Section 3B of the Act.
24. In view of the above, we find no merit in the present appeal. The same is accordingly dismissed with costs quantified at ₹25,000/-. The costs shall be deposited with the Karnataka State Legal Services Authority within a period of four weeks from date.
25. Pending applications also stand disposed of.
Sd/-
(VIBHU BAKHRU) CHIEF JUSTICE Sd/-
(C M JOSHI) JUDGE KS List No.: 1 Sl No.: 55