Gujarat High Court
Ambuja Cements Limited vs Chief Controlling Revenue Authority on 10 February, 2023
Author: Aravind Kumar
Bench: Aravind Kumar, Ashutosh Shastri
C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/STAMP REFERENCE NO. 1 of 2020
With
R/STAMP REFERENCE NO. 2 of 2020
With
R/STAMP REFERENCE NO. 3 of 2020
With
R/STAMP REFERENCE NO. 4 of 2020
With
R/STAMP REFERENCE NO. 5 of 2020
With
R/STAMP REFERENCE NO. 6 of 2020
With
R/STAMP REFERENCE NO. 7 of 2020
With
R/STAMP REFERENCE NO. 1 of 2021
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AMBUJA CEMENTS LIMITED Versus CHIEF CONTROLLING REVENUE AUTHORITY ============================================= Appearance:
Mr. Ashish Kumar Singh for Mr. Bhavesh Choksi for the applicant in Stamp Reference No.1 of 2020 Mr. Mihir Joshi, Senior Advocate with Mr. Sandip Singhi for Singhi & Company for the applicants in Stamp Reference No.2, 4, 5 and 7 of 2020 Mr. Tushar Hemani, Senior Advocate with Mr. Jaimin Dave for the applicant in Stamp Reference No.4 of 2020 Ms. Manisha Lavkumar Shah, Government Pleader with Mr. Chintan Dave, Mr. D.M. Devnani and Ms. Nidhi Vyas, learned Assistant Government Pleaders for the respondent. ============================================= CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMAR and HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI and HONOURABLE MS. JUSTICE NISHA M. THAKORE Date :10/02/2023 COMMON CAV JUDGMENT (PER : HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMAR) Page 1 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
1. These stamp references are made under Section 54(1A) of the Gujarat Stamp Act, 1958 (hereinafter referred to as 'the Stamp Act') by the Chief Controlling Revenue Authority, Gujarat State, Gandhinagar for the opinion of this Court.
2. Though questions of law in each of this stamp reference would overlap, the facts in each case and would differ partially and as such, the facts are narrated independently and the questions of law are dealt with collectively.
RE: STAMP REFERENCE No. 1 OF 2020
3. A scheme of amalgamation between Holcim (India) Private Limited with Ambuja Cement Limited was presented before this Court for sanctioning the said scheme. The said scheme came to be sanctioned by the Company Court i.e. High Court of Gujarat on 18.3.2014 and pursuant to the same, the applicant - Ambuja Cement Limited filed an application dated 15.5.2014 before the Collector under provisions of Section 31(1) of the Stamp Page 2 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Act seeking opinion as to proper stamp duty leviable on the order of sanction of the scheme by the Company Court. The Collector, by order dated 26.2.2019, ordered for recovering deficit stamp duty of Rs.15 crore along with penalty of Rs.3 crore from the applicant company on the order of sanctioning the scheme dated 18.3.2014 passed by the Company Court.
4. Being aggrieved by the aforesaid order dated 26.2.2019 passed by the Collector & Additional Superintendent of Stamps, the applicant challenged the same under Section 53(1) of the Stamp Act before the Chief Controlling Revenue Authority who, by order dated 19.11.2019, confirmed the order passed by the Collector dated 26.2.2019 after giving opportunity of hearing to the applicant by raising seven (7) questions of law. Hence this reference.
RE: STAMP REFERENCE No. 2 OF 2020
5. A composite scheme of arrangement of transfer of 'Windmill Division of Troikaa Pharmaceuticals Limited Page 3 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 (TPL) with Troikka Exports Private Limited (TEPL) and amalgamation of residual TPL with TEPL came to be presented before this Court by TPL for sanction of the scheme by filing Company Petition No.17 of 2016 in Company Application No.334 of 2018 with Company Petition No.18 of 2016 in Company Application No.333 of 2016.
6. The Company Court sanctioned the said scheme fully vide common order dated 9.3.2016.
7. Pursuant to the sanction of the scheme, TEPL was converted into a public limited company and was renamed as Troikka Exports Private Limited. Subsequently on 15.6.2016, TEP was renamed as Troikaa Pharmaceuticals Limited which was duly certified by the Registrar of Companies.
8. Pursuant to the sanction of the scheme by the Company Court on 9.3.2016, TPL filed an application dated 13.5.2016 before the Collector & Additional Superintendent of Stamps seeking opinion and Page 4 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 adjudication as to proper stamp duty leviable on the order dated 9.3.2016 - order of sanction of the scheme by the Company Court.
9. The Collector, by communication dated 8.7.2016, intimated the applicant that stamp duty payable on the said instrument was Rs.4,87,50,049/- and by said letter called upon the applicant - TPL to pay the stamp duty. The applicant forwarded a communication dated 30.7.2016 to the Collector raising objections to the same. It is thereafter Collector passed an order on 19.8.2016 and opined the stamp duty as intimated already by letter dated 8.7.2016 was payable on the said instrument.
10. Being aggrieved by and not satisfied with the order passed by the Collector & Additional Superintendent of Stamps, the applicant - TPL challenged the said order before the Chief Controlling Revenue Authority. The said authority after giving opportunity to the applicant passed an order on 19.11.2019 confirming the order passed by the Collector and as such, reference has been sought by Page 5 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 the applicant and accordingly two (2) questions have been referred to this Court for opinion.
RE: STAMP REFERENCE No. 3 OF 2020
11. A composite scheme in the nature of transfer of windmill undertaking of Gopal Glass Works Limited (GGWL) into Gopal Mirror Coating Private Limited (GMCP) by way of slump sale and amalgamation of residue undertaking of GGWL - transferor into GMCP - transferee under Sections 230 to 232 of the Companies Act, 2013 came to be allowed / sanctioned by the National Company Law Tribunal vide order dated 11.8.2017. Pursuant to the said order dated 11.8.2017 passed by the NCLT, GGWL filed an application dated 8.9.2017 before the Collector & Additional Superintendent of Stamps under provisions of Section 31(1) of the Gujarat Stamps Act, 1958 seeking opinion and adjudication as to proper stamp duty leviable on the order of sanctioning the scheme passed by National Company Law Tribunal on 11.8.2017. The Collector adjudicated the same and proposed the stamp duty of Rs.1,60,83,177/- and in Page 6 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 response to the same, the applicant - GGWL by its letter dated 21.5.2018 objected to the same and thereafter the Collector and Additional Superintendent of Stamps by order dated 26.7.2018 confirmed its earlier opinion and called upon the applicant - GGWL to pay the stamp duty of Rs.1,60,83,177/-.
12. Being aggrieved by and dissatisfied with the said order of the Collector, the applicant challenged the same before the Chief Controlling Revenue Authority under Section 53(1) of the Stamp Act who after extending an opportunity of hearing the appellant passed an order on 26.8.2019 confirming the order passed by the Collector and in the light of the application having been filed by the applicant - GGWL for reference. Hence, three (3) questions have been referred by the Chief Controlling Revenue Authority for our opinion.
RE: STAMP REFERENCE No. 4 OF 2020
13. A composite scheme of arrangement amongst Adani Gas Holding Limited (AGHL), Adani Gas Limited (AGL) Page 7 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 and Adani Enterprises Limited (AEL) was sanctioned by the National Company Law Tribunal by common order dated 3.8.2018. Under the said scheme, it was proposed that AGHL would be amalgamated with AGL and demerged undertaking of AEL gas sourcing and distribution business (demerged undertaking) would be transferred to AGL.
14. Pursuant to the said order dated 3.8.2018 passed by the NCLT, the applicant - AEL filed an application before the Collector under provisions of Section 31(1) of the Stamp Act seeking opinion as to proper stamp duty payable on the scheme approved by NCLT on 3.8.2018. The said authority by communications dated 20.10.2018 and 29.6.2019 held that stamp duty payable would be Rs.27,33,65,000/- and after giving opportunity of personal hearing by order dated 19.9.2019 opined that stamp duty of Rs.27,33,65,000/- as already opined would be payable.
15. Being aggrieved by and dissatisfied with the order of the Collector, the applicant challenged the said order Page 8 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 before the Chief Controlling Revenue Authority who, by order dated 30.12.2019, upheld the order of the Collector dated 19.9.2018 and as such reference has been sought by raising two (2) questions and seeking our opinion.
RE: STAMP REFERENCE No. 5 OF 2020
16. The Company Court, by common order dated 7.5.2015, sanctioned a composite scheme of arrangement between Adani Enterprises Limited (AEL), Adani Port and Special Economic Zones Limited (APSEZ), Adani Power Limited (APL), Adani Transmission Limited (ATL) and Adani Mining Private Limited (AMPL) whereunder it was proposed that (a) the port undertaking of the applicant - AEL would be transferred to APSEZ; (b) the power undertaking of the applicant - AEL would be transferred to APL; (c) the transmission undertaking of the applicant
- AEL would be transferred to ATL; (d) APML would be amalgamated with the applicant - AEL.
17. Pursuant to the sanction of the scheme by the Company Court, applicant filed an application dated Page 9 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 11.6.2015 before the Collector under Section 31(1) of the Stamp Act for opinion as regards the proper stamp duty payable on the scheme approved by the Company Court on 7.5.2015 and sought adjudication as to the proper stamp duty payable on the instrument viz. the order dated 7.5.2015 and is said to have produced the particulars sought for by the Collector. The Collector, by communication dated 9.9.2016, called upon the applicant
- AEL to pay stamp duty of Rs.75 crore which was objected to by the applicant - AEL and overruling the same, Collector confirmed the earlier opinion expressed and also levied penalty of Rs.3 lakh by order dated 25.7.2018.
18. Being aggrieved by and dissatisfied with the aforesaid order dated 25.7.2018, an application came to be filed by the applicant - AEL before the Chief Controlling Revenue Authority and also deposited a sum of Rs.18,75,00,000/- along with the application dated 20.10.2018 as required under Section 53 of the Stamp Act. After extending opportunity of hearing to the Page 10 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 applicant - AEL, the Chief Controlling Revenue Authority by order dated 30.12.2019 rejected the application of the applicant - AEL and upheld the order dated 25.7.2018 passed by the Collector. Hence, reference has been made seeking opinion of this Court on one (1) substantial question of law.
RE: STAMP REFERENCE No. 7 OF 2020
19. National Company Law Tribunal, Principal Bench, New Delhi, by order dated 24.11.2017, sanctioned the composite scheme of arrangement between Inter Globe Enterprises Limited (GEL), Inter Globe Real Estate Ventures Private Limited (IGREVP), Inter Globe Business Solution Private Limited (GBSP) and Acquire Services Private Limited (ASP) and upon sanction of the said scheme, an application dated 20.12.2017 was filed before the Collector (Stamp), Jaipur, Rajasthan by IGREVP as also said 4 companies, 3 situated in Jaipur, Rajasthan who opined that stamp duty of Rs.30 crore was required to be paid and accordingly stamp duty has been paid by the applicant which is certified by the Collector (Stamp), Page 11 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Jaipur by issuance of certificate dated 5.2.2018 under Section 36 of the Rajasthan Stamps Act, 1998.
20. The applicant filed an application dated 1.5.2018 before the Collector & Additional Superintendent of Stamps at Gandhinagar, Gujarat seeking adjudication as to the proper stamp duty payable on the composite scheme of arrangement sanctioned by NCLT, Principal Bench, New Delhi and said authority viz. Collector by communication dated 9.10.2018 opined a sum of Rs.5,18,38,002/- is to be paid. This was objected to by the applicant IGREVP by its communication dated 25.10.2018 and Collector after considering said reply /objection raised by IGREVP and after hearing the applicant by order dated 18.10.2019 confirmed his opinion and called upon the applicant to pay stamp duty of Rs.5,18,38,002/- pursuant to order dated 18.10.2019.
21. Being aggrieved by and dissatisfied with the aforesaid order of the Collector, the applicant - GIREVP preferred an application dated 15.1.2020 under Section Page 12 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 53(1) of the Gujarat Stamps Act before the Chief Controlling Revenue Authority who, by order dated 5.8.2020, rejected the application and upheld the order dated 18.10.2019 passed by the Collector. Hence, this reference by raising eight (8) questions.
22. We have heard the arguments of Mr. Ashish Kumar Singh, learned advocate appearing for Mr. Bhavesh Choksi for the applicant in Stamp Reference No.1 of 2020, Mr. Mihir Joshi, learned Senior Advocate with Mr. Sandip Singhi for Singhi & Company for the applicants in Stamp Reference No.2, 4, 5 and 7 of 2020, Mr. Tushar Hemani, learned Senior Advocate with Mr. Jaimin Dave for the applicant in Stamp Reference No.4 of 2020 and Ms. Manisha Lavkumar Shah, learned Government Pleader with Mr. Chintan Dave, Mr. D.M. Devnani and Ms. Nidhi Vyas, learned Assistant Government Pleaders for the respondent.
23. Learned advocate Mr. Ashish Kumar Singh assisted by Mr. Bhavesh Chokshi appearing for the applicant has Page 13 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 vehemently contended that since the questions of law before the reference are though several in numbers, but two questions being interwoven are required to be answered namely question no. (I) & (II). It has been contended that in relation to the scheme which is received and sanctioned by the High Court of Gujarat on 18.03.2014, the Appointed Date which was determined was 01.04.2013 and as such, the question of applying the amendment to Article 20(d) of Schedule - I of the Act is impermissible as it has come after the Appointed Date. Since the said notification was dated 15.05.2013, may not be applied to facts of the present case. According to Mr. Singh the amount of shares issued by the applicant - company is worth Rs.1,03,73,41,82,220/- and stamp duty payable is Rs.1% comes to Rs.103,73,41,822/- or maximum of Rs.10 crores as mentioned under Article 20(d) of Schedule - I of the Act as on the Appointed Date i.e. 01.04.2013 and as such, the maximum amount which is payable at the best is Rs.10 crore which has already been paid by the applicant - company and acknowledged Page 14 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 by the authority without any demur and as such, under the guise of revised notice, no further recovery is permissible. It has also been contended that it is clear from the notice of Collector dated 07.11.2016 that adjudication application of the applicant - company is processed and by virtue of provisions of Article 20(d) of the Schedule-I of the Act, order dated 18.03.2014 is adjudicated and as such, demand draft has been accepted by the Collector dated 13.09.2016. Hence, a show cause notice dated 07.11.2016 is issued against the applicant - company as to why penalty may not be leviable for delay in making the payment of stamp duty under Section 17 read with Section 33 of the Act should not be thrust upon the applicant as there is no question of delay on the part of the applicant as demand drat has already been sent on 13.09.2016. It has been submitted that about final approval of FIPB was not within the hands of the company and therefore, no penalty can be leviable on the applicant for the alleged delay as the said circumstance was beyond the control of the applicant and once revenue Page 15 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 having accepted the demand draft, without any objection, question of issuance of revised notice or demand does not arise and same would be without authority of law. By referring to certain documents it has been contended that though it was pointed out clearly before the authority, the authority has not properly applied its mind and thereby, has passed the order which is quite in conflict with the law. Hence, the learned Collector in the background of aforesaid facts has no jurisdictional authority to impound any instrument by invoking Section 33 of the Act. By giving emphasis on the Appointed Date i.e. 01.04.2013 and by referring to amended notification dated 15.05.2013 and Article 20(d) of Schedule - I of the Act, he has asserted that since the High Court has sanctioned the scheme may be in March, 2014, but by virtue of said sanction the Appointed Date is determined i.e. 01.04.2013, the rate prevailing as on that date is the determinative factor and as such liability has been discharged by paying said amount by way of demand draft and as such, the stand of the authority is Page 16 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 impermissible and it is requested to answer the reference in the aforesaid context.
24. For the purpose of substantiating his contentions, learned advocate Mr. Singh has referred to the following decisions:
"* In the case of State of Gujarat v. Bio Deal Laboratories Private Limited (R/Letters Patent Appeal No, 452 of 2017 in R/Special Civil Application No. 345 of 2011).
* In the case of Alembic Pharmaceuticals Limited v. Chief Controlling Revenue Authority (Stamp Reference No. 1 of 2012) reported in (2014) 3 GLR 2255.
* In the case of Aakash Laviesh Leisure Private Limited v. The State of Maharashtra & Ors., reported in 2010 (6) BomCR. 179.
* In the case of Solaris Chemtech Industries Limited v. State of Gujarat (Special Civil Application No. 53 of 2016.)"
25. As against this, Ms. Manisha Lavkumar Shah learned Government Pleader appearing on behalf of the stamp authority has vehemently opposed the stand of the applicant - company and has submitted that amendment has already been inserted by virtue of notification dated Page 17 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 15.05.2013 and the Hon'ble High Court has sanctioned the scheme on 18.03.2014 and as such, demand raised by the authority is justified. It has been asserted clearly that levy of stamp duty should be on the date of execution of the instrument and not on the Appointed Date mentioned in the scheme sanctioned and as such, the date of execution can be said to be the order of High Court dated 18.03.2014 which is after the date of amendment and as such, the date of execution is significant and not the Appointed Date mentioned therein for the purpose of chargeability. By referring to certain provisions of the Stamp Act, it has been submitted that demand which has been raised by the authority is on the basis of the correct interpretation of the provisions applicable and as such, the total amount which is payable is Rs.25 crores by virtue of amendment and not the amount which has been sent through demand draft. Learned Government Pleader has after referring to certain provisions precisely Sections 31 and 32 of the Act has resisted the stand of the petitioner. For the purpose of this Reference, the Page 18 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Government has tendered written submission and by referring to it, the learned Government Pleader has requested the Court to deal with the Reference accordingly.
26. Mr. Mihir Joshi, learned Senior Advocate appearing on behalf of the applicants has contended that 'market value of share' as defined under Explanation III to Sub- Article (d) of Article 20 on the basis of which the stamp duty chargeable on instrument covered under Article 20(d) would be in three contingencies viz. (a) where the shares of transferee are listed; (b) where the shares of transferee company are not listed, but the shares of the transferor company are listed; (c) where the shares of neither transferee company nor the transferor company are listed. Elaborating his submissions, he would contend that shares of both the transferor and the applicant company of Stamp Reference No.2 of 2020 are not listed on any stock exchange and as such the market value of the shares issued by the applicant is deemed to be its face value, irrespective of whether such shares being Page 19 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 issued at a premium or not and on the ground that shares are issued at a premium, the authorities below have included the said premium for determining the market value of share.
27. He would further contend that fiscal statutes are construed strictly and the contention now put forth that premium is a 'consideration' other than share is clearly an afterthought and untenable as it is evident from the expression 'amount of consideration' referred to in Article 20(d)(1) is separate and distinct from the 'market value of share' and as such it cannot be treated as amount of consideration. He would also submit that stand of the Revenue that share premium is covered within the phrase 'amount of consideration' is an afterthought.
28. He would also elaborate his submission by contending that premium cannot be something distinct from the shares and it cannot exist independently apart from shares as premium is part of the entire value of the share. Hence, on this ground, he has sought for Stamp Page 20 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Reference Nos.1/2020 and 2/2020 being answered in favour of the applicant.
29. Mr. Tushar Hemani, learned Senior Advocate appearing for Mr. Jaimin Dave for the applicant has vehemently contended that there appears to be a complete misconception of the provisions of law in respect of determination of market value of shares. It has been submitted that authority has failed to appreciate that in view of Clause (C) of Explanation-III to Article 20(d) of Schedule-I of Gujarat Stamp Act, which provides that "market value of shares" in case where shares of both transferor and transferee company are not listed on stock exchange, "means face value of shares". It is submitted that nowhere it is prescribed that in case where shares are issued at premium, such premium amount shall be included in the face value. Here in the instant case, though respondents have come to a categorical finding that shares of transferor as well as transferee company are not listed on any stock exchange, hence face value of shares will be considered as market Page 21 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 value of shares for the purpose of computation of stamp duty and here, face value of shares issued by transferee company is Rs.10/-. Hence, premium of Rs.227.68 per share cannot be considered as part of market value inasmuch as explanation attached to the provision is abundantly clear.
30. It has been submitted that legislature through this provision has ensured that it provides for a mechanism to evaluate shares which are not listed on stock exchange and therefore, in a situation like this, computation of stamp duty should be on the basis of face value of shares since same are not listed on stock exchange. When this provision is apparently clear, it is not open for the authority to misconstrue the provision and arrive at a different conclusion which may frustrate the very object of the provision.
31. It has been submitted that law of interpretation on fiscal Statute is expressly clearly by several decisions and proposition on it that irrespective of its consequences to Page 22 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 be given to sub-serve the object of the provision. It has been submitted that unlike Maharashtra Stamp Act, Collector does not have power to determine market value of shares and since provision is absolutely clear, unlike Maharashtra Stamp Act, authority has no option but to give effect to the provisions contained under Gujarat Stamp Act. Hence, when both transferor and transferee companies are not listed, computation should be on the basis of face value of shares of the company. For this purpose, learned senior counsel has made certain reference to the meaning of word 'Premium' and has also made a reference to certain decisions delivered by Hon'ble Apex Court and by way of a compilation, following are the decisions referred to and relied upon:
(i) Board of Revenue v. Rai Saheb Siddnath Mehrotra reported in (1965)2 SCR 269 :
AIR 1965 SC 1092;
(ii) District Registrar and Collector v. Canara Bank reported in (2005)1 SCC 496;
(iii) CIT v. Calcutta Knitwears reported in (2014) 6 SCC 444 Page 23 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 And as such, he has prayed that error which has crept in may be corrected by answering the reference accordingly.
32. Mr. Sandip Singhi, learned advocate appearing for the applicant has contended that scheme of arrangement is a composite scheme and as such the Collector erred in holding it comprises of separate / distinct transaction and same is covered under Section 5 of the Stamp Act by referring to the scheme approved by National Company Law Tribunal by order dated 3.8.2018 that respective companies had taken the approval of their respective shareholders and creditors in respect of the whole scheme and not in respect of the standalone transfer of the demerged undertaking of the applicant to the transferee company (AGL) and amalgamation of AGHL with AGL and as such subject transaction or scheme approved by NCLT on 03.08.2018 cannot be covered under Section 5 of the Stamp Act.
Page 24 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
33. He would draw the attention of the Court under Section 2(g)(iv) of the Stamp Act which stipulates that every order made by the High Court under Section 394 of the Companies Act would be considered as 'instrument' and as such Sections 230 to 232 of the Companies Act, 2013 would be a conveyance and is not separate and distinct and hence, question of payment of separate duty as sought to be collected by the Collector would not arise.
34. He would also contend that assuming while denying, the instrument is covered under Section 5 of the Stamp Act, even then the duty as calculated by the Collector is incorrect since demerged undertaking of the applicant pursuant to the sanction of the aforementioned scheme stood transferred to AGL. The shares of the applicant were listed on the stock exchange as on appointed date but, however, the shares of AGL were not listed on the stock exchange as on appointed date and as such, the market value of the shares of the applicant are irrelevant. He would submit that Explanation III(b) to Article 20(d) of Schedule I to the Stamp Act would be applicable only in Page 25 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 cases of amalgamation and not in respect of reconstruction of companies. Even on bare reading of Article 20(d), it would be evident that market value of the shares are to be calculated in respect of shares which are issued or allotted and in such circumstances, market value of the shares of AGL are required to be calculated and not that of the applicant as the shares are issued and allotted by AGL and not by the applicant. Hence, he would contend that no stamp duty can be levied in the cases stated above and therefore the calculation of stamp duty of Rs.25 crore on the transfer of demerged undertaking of the applicant to AGL is incorrect and against the provisions of law.
35. Mr. Mihir Joshi, learned Senior Advocate appearing for the applicant on the question of law would reiterate the contentions raised in Stamp Reference Nos.4/2020, 5/2020 and 6/2020 and prays for the reference being answered in favour of the applicant. Page 26 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
36. Per contra, Ms. Manisha Lavkumar Shah learned Government Pleader appearing on behalf of the stamp authority has vehemently opposed the stand of the applicant - company and has submitted that amendment has already been inserted by virtue of notification dated 15.05.2013 and the Hon'ble High Court has sanctioned the scheme on 18.03.2014 and as such, demand raised by the authority is justified. It has been asserted clearly that levy of stamp duty should be on the date of execution of the instrument and not on the Appointed Date mentioned therein and as such, the date of execution can be said to be the order of High Court namely 18.03.2014 which is after the date of amendment and as such, the date of execution is significant and not the Appointed Date mentioned in the scheme for the purposes of chargeability. By referring to certain provisions of the Stamp Act, it has been submitted that demand which has been raised by the authority is on the basis of the correct interpretation of the provisions applicable and as such, the total amount which is payable is Rs.25 crores by Page 27 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 virtue of amendment and not the amount which has been sent through demand draft. Learned Government Pleader has after referring to certain provisions precisely Sections 31 and 32 of the Act and has resisted the stand of the petitioner. For the purpose of this Reference, the Government has tendered written submission and by referring to it, the learned Government Pleader has requested the Court to deal with the Reference accordingly.
37. On each question which has been placed for consideration, written submissions have been tendered and as such, instead of repeating narration, the Court deems it proper to reproduce the same hereunder:-
"RE: RESPONSE OF STAMP AUTHORITY IN STAMP REFERENCE NO. 1/2020 5.1. Whether in the facts and circumstances of the present case, the Learned Collector in proceeding initiated under Section 31 of the Act had any jurisdiction or authority to impound any instrument by invoking the provision of Section 33 of the Act?
(Referred in Stamp Reference No.1/2020 as Page 28 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Question No. I) 5.2. Whether in the facts and circumstances of the present case, provisions of Section 17 of the Act have any applicability qua the instrument under consideration?
(Referred in Stamp Reference No. 1/2020 as Question No .IV) 5.3. Whether in the facts and circumstances of the present case, can any delay be ascribed to the applicant company in submitting the requisite detail/document in relation to the issuance of shares?
(Referred in Stump Reference No.1/2020 as Question No. VI) 5.4. Whether in the facts and circumstances of the present case, the provision of Section 39 (1)(b) of the Act can be made applicable, more so when the mandatory requirement for the invocation of the provision of Section 39(1)(b) of the Act have not been fulfilled?
(Referred in Stump Reference No.1/2020 as Question No..V) 5.5. Whether in the facts and circumstances of the present case, any penalty can be levied on the Applicant Company?
(Referred in Stamp Reference No. 1/2020 as Question No.VII) RESPONSE TO QUESTION NO. 5.1 TO 5.5
1. When any instrument whether executed or not and whether previously stamped or not is brought to the Collector, then the Collector Page 29 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 shall determine the duty chargeable on the instrument under Section 31 of the Act. The Collector on examination of such instrument if is satisfied about the duty not having been fully paid as determined, in such event the collector exercises power under Section 32 of the Act by issuing certificate. At this stage it shall be noteworthy to quote proviso to Section 32 which reads as under
"Provided that nothing in this section shall authorize the Collector to endorse
(a) any instrument executed or first executed in the State and brought to him after the expiration of one month from the date of its execution or first execution, as the case may be
(b) any instrument executed or first executed out of the State and brought to him after the expiration of three months after it has been first received in this State, or
(c) any instrument chargeable with the duty of twenty naye paise or less when brought to him, after the drawing or execution thereof on paper not duly stamped."
Thus, if an instrument which is executed, is brought to the Collector after the expiration of one month, the Collector has no authority to make any endorsement thereon. However, Section 33 permits examination and impounding of instruments and the Collector is empowered under this Section to impound the instrument so as to ascertain whether the document is Stamped with appropriate value as per the description required by the law and therefore, when the Collector is not authorized to issue certificate under Section Page 30 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 32 of the Act, then the Collector in such circumstances would make recourse to Section 33. Under Section 39(1)(b) the Collector would thereafter proceed to exercise power to stamp instruments impounded. Once the instrument is impounded Once the instrument is impounded under 5.33 by a public officer (except police officer) then, the Collector shall follow the procedure under 5.39(1)(a) certifying the endorsement thereon that it is duly stamped or alternatively, follow procedure under 39(1) (b) to require payment of proper duty together with penalty
2.On payment of proper duty or de amount required to make up the same together with penalty being made on the instrument, the Collector is required to certify by endorsement thereon with the proper duty or the case may be proper duty and penalty which has been levied and release the document. For easy perusal of this Hon'ble Court relevant Section 31, 32, 39 and 41 are quoted herein below:
Section 31 - Adjudication as a proper stamps (1) When any instrument, whether executed or not and whether previously stumped or not, is brought to the Collector, and the person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is chargeable and pays a fee of such amount [not exceeding one hundred rupees and not less than twenty-five rupees) as the Collector may, in each case direct, the Collector shall determine the duty (if any) with which in his judgement, the instrument is chargeable (2) For this purpose the Collector may require Page 31 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 to be furnished with an abstract of the instrument, and also with such affidavit or other evidence as he may deem necessary to prove all the facts and circumstances affecting the chargeability of the instrument with duty, or the amount of the duty with which it is chargeable, are fully and truly set forth therein, and may refuse to proceed upon any such application until such abstract and evidence have been furnished accordingly Section 32- Certificate by Collector-(1) When an instrument brought to the Collector under section 31, is in his opinion, one of a description chargeable with duty, and
(a) the Collector determines that it is already fully stamped, or
(b) the duty determined by the Collector under section 31, or such a sum as with the duty already paid in respect of the instrument, is equal to the duty so determined, has been paid, the Collector shall certify by endorsement on such instrument that the full duty (stating the amount) with which it in chargeable has been paid.
(2) When such instrument is, in his opinion, not chargeable with duty, the Collector shall certify in manner aforesaid that such instrument is not so chargeable.
(3) Any instrument upon which an endorsement has been made under this Section, shall be deemed to be duty stamped or not chargeable with duty, as the case may be, and, if chargeable with duty shall be receivable in evidence or otherwise, and may be acted upon and registered as if it has been originally duly stamped:Page 32 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Provided that nothing in this section shall authorise the Collector to endorse
(a) any instrument executed or first executed in the State and brought to him after the expiration of one month from the date of its execution or first execution as the case may be;
(b) any instrument executed or first executed out of the State and brought to him after the expiration of three months after it has been first received in s State: or (c ) any instrument chargeable with the duty of twenty naye paise or less when brought to him, after the drawing or execution thereof, on paper not duly stamped.
Section 39:- Collector's power to stamp instruments impounded - (1) When the Collector impounds any instrument under section 33 or receives any instrument send to him under sub-section (2) section 37, no being an instrument chargeable with a duty of twenty naye paise, or less he shall the following procedure :-
(a) if he is of opinion that such instrument in duly stamped or is not chargeable with duty, he shall certify by endorsement thereon it is duly stamped, or that it is not so chargeable as the case way be;
(b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees; or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion therefore, Page 33 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 whether such amount exceeds or falls short of five rupees.
Provided that, when such instrument has been impounded only because it has been written contravention of section 13 or section 14, the Collector may, if he thinks fit, remit the whole penalty made by this section (2) Every certificate under clause (a) of sub- section (1) shall for the purposes of this Act be conclusive evidence of the matters stated therein.
(3) Where an instrument has been sent to the Collector under sub-section (2) of section 37 the Collector shall, when he has dealt with it is a provided by this section, return it to the impounding officer.
Section 41:- Endorsement of instruments on which duty has been paid under section 34, 39 or 40.-(1) When the duty and penalty (if any), leviable in respect of any instrument [(not being an instrument referred to a sub- section (1) of section 32A)] have been paid under section 34 section 39 or section 40, the person admitting such instrument in evidence or the Collector, as the case may be, shall certify by endorsement thereon that the proper duty or, as the case may be, the proper duty and penalty (stating the amount of each) have been levied in respect thereof, and the name and residence of the person paying them.
(2) Every instrument so endorsed shall thereupon be admissible in evidence, and may be registered and acted upon and authenticated as if it had been duly stomped, and shall be delivered on his application in Page 34 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 this behalf to the person from whose possession it came in to the hands of the officer impounding it or as such person may direct:
Provided that-
(a) no instrument which has been admitted in evidence upon payment of duty and penalty under section 34, shall be so delivered before the expiration of one month from the date of such impounding or if the Collector has certified that its further detention is necessary and has not cancelled such certificate.
(b) nothing in this section shall affect the provisions of Order XIII in Schedule I of the Code of the Civil Procedure, 1908 (V of 1908) Similarly, Section 17 which deals with instrument executed in State wherein it, mandates that instrument chargeable with duty and executed by any person in the State shall be stamped before or at the time of execution or immediately on the next working day. The said Section also provides for an instrument to be stamped within 30 days in so far as it relates to proviso to Section 17.
Section 17 is reproduced herein-below for the Hon'ble Courts perusal:-
Section 17- Instruments executed in State - All instruments chargeable with duty and executed by any person in this State shall be stamped before or [at the time of execution or immediately thereafter on the next working day following the day of execution] Provided that the clearance list described in Articles 18A, 188, 18C, 18D or 18E of Page 35 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Schedule I may be stamped by an officer authorised by the State Government by rules made under this Act, if such clearance list is submitted for stamping by the cleaning house of an Association in accordance with its rules and bye-laws with the requisite amount of stamp duty, within two months from the date of its execution.
[Provided further that the instrument, so far as it relates to an order of,
(i) the National Company Law Tribunal under section 232 of the Companies Act, 2013 (18 of 2013) in respect of a scheme for reconstruction of the company or companies involving merger or the amalgamation of any two or more companies;
(ii) the Reserve Bank of India under Section 44A of the Banking Regulation Act, 1949 (10 of 1949) in respect of amalgamation or dissolution of Banking companies.
shall be stamped within thirty days from the date of such order of the National Company Law tribunal or, as the case may be, the order of the Reserve Bank of India.] If the said instrument duly stamped is submitted under Section 31 of the Act, the Collector may adjudicate with regard to proper stamp and verify that the same is within limitation as prescribed under Section
17. However, in case the instrument is not duly stamped within the prescribed time in such circumstances, the recourse would be under Section 33 of the Act whereby the instrument can be impounded.
Page 36 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 QUESTION:
5.6. Whether in the facts and circumstances of the present case and in view of Explanation II (a) to Article 20 of the Schedule to the Act, stamp duty applicable as on the "appointed date" will not be payable?
(Referred in Stamp Reference No. 1/2020 as Question No. II) RESPONSE TO QUESTION NO.5.6 In the facts of the present case, the appointed date as provided in the instrument was 01.04.2013, however, the scheme was sanctioned by Hon'ble High Court on 18.03.2014 and the document was for the first time presented before the authority on 15.05.2014 The said document was therefore, not submitted for adjudication within 30 days as required under S. 17 read with S.32 and therefore, there could not have been any issuance of certificate under Section 32 of the Act.
2. As far as the applicability of the Stamp duty on appointed date is concerned, it would be appropriate to refer to Section 2(d) which defines "chargeable" and the said definition is clear as the same provides that chargeable means as applied to an instrument when such instrument was executed. Similarly Section 3 of the Act which deals with instruments chargeable with duty, the same also provides for an instrument executed in the State Section 2(d) and Section 3 quoted herein below;
Page 37 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 "Section 2(d):- (d) "chargeable mans, as applied to an instrument executed or first executed after the commencement of this Act, chargeable under this Act, and as applied to any other instruments, chargeable under the law in force in the State when such instrument was executed or where several persons executed the instrument at different times first executed":
"Section 3- instruments chargeable at duty- Subject to the provisions of this Act and the exemptions contained in Schedule 1, the following instruments shall be chargeable with duty of the amount indicated in Schedule I, as the proper duty therefore respectively, that is to say
(a) every instruments mentioned in Schedule I which not having been previously executed by any person, is executed in the State on or after the date of commencement of this Act;
[(aa) every instrument mentioned in Schedule 1, which, not having been previously executed by or on behalf of or in favour of the Government or any local authority, is executed by or on behalf or in favour of the Government or any local authority]
(b) every instrument mentioned in Schedule 1, which, not having been previously executed by any person is executed out of the State on or after the said date, relates to any property situate, or to any matter or thing done or to be done in this State and is received in this State:
Provided that no duty shall be chargeable in respect of-Page 38 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 (1) any instrument executed by or on behalf of or in favour of the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument:
(2) any instrument for the 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 ship or vessel registered under the Bombay Coasting Vessels Act, 1838 (XIX of 1938), or the Indian Registration of Ships Act, 1841 (X of 1941), Thus, the stamp duty payable would therefore be on the date when the execution of the instrument takes place. Normally, the scheme of amalgamation and/or arrangement between the companies is finalized and thereafter the same is placed before the competent Courts/Tribunals for approval.
However, a question would arise with regard to the amount that shall be chargeable on the execution of the instrument. As already provided herein-above, the word "chargeable" means as applied to an instrument executed and therefore, the instrument shall be applied to valuation of stamp authority only when the same in executed by payment of appropriate stamp duty Therefore, the word "appointed date" has to correlate with the chargeability of the stamp duty which is again dependent on its execution. Therefore, the appointed date has to be construed as the date of execution of stamp duty once the scheme of amalgamation/ arrangement is approved by the competent authority/tribunal In other words, the value of share has to be taken into Page 39 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 consideration as on appointed date and the rate of stamp duty can only be decided by the authorities as and when the instrument is executed QUESTION:
5.7. Whether in the facts and circumstances of the present case, a revised notice can be issued to expand the scope of an earlier show cause notice and introduce a completely new case altogether?
(Referred m Stamp Reference No.1/2020 as Question No.III) RESPONSE TO QUESTION NO. 5.7 In so far as the facts of the present case is concerned, initially an notice dated 07.11.2016 came to be issued calling upon and intimating that the payable stamp duty under Section 20(d) would be 10 Crores however, on noticing the mistake that the stamp duty as provided under Section 20(d) which was in fact payable on the instrument was 25 Crores and therefore, a revised notice came to be issued on 22.04.2017. There being no adjudication or prejudice to the petitioner it cannot be said that the revised notice cannot be issued. Once the authority is of the opinion that there is a mistake, in the notice more particularly when the proceeding have not attained finality, as no orders having been passed on the basis of such notice with mistake that the authority found to be with apparent mistake. Thus there is no bar in issuing a revised notice with correct chargeable stamp duty."
Page 40 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 In view of the aforesaid written submission, learned Government Pleader has requested this Court to dispose of the reference accordingly. For the purpose of strengthening the submission, learned Government Pleader has referred to definition, their interpretations and several decisions in support of her arguments which are noted here-under :-
"1. Relevant extracts of definition in "The Law Lexicon with Legal Maxims" by P. Ramanatha Aiyar (Reprint Edition 1992).
PREMIUM. A consideration; something given to invite a loan or bargain; as the annual payment upon Insurances; a fee paid for the privilege of being used in a taught a trade or profession; the consideration paid to the assignor by the assignee of a lease or to the transferor by the transferee of shares or stock, etc. A prescribed periodical (usually annual) payment on a policy of insurance; the advance in price of stock or shares above par value.
"Premium", ordinarily means, increased value; it is also used to describe a Bonus on a Life Page 41 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Policy. (See Barrow v. Methold, 3 W.R. Eng.
629.) Premium (in stock exchange.) In stock broking premium is the value above the original cost or price, as of shares or stock, as opposed to discount, which is the value below the original cost.
AT A PREMIUM. Above par; at more than the face value or nominal value."
* In the case of Rajesh Vaishnav & Ors., v. State of Chhatisgarh & Ors., reported in 2010 SCC Online Chh. 282).
* In the matter of reduction of share capital; Green House Promoters Private Limited reported in 2018 SCC Online NCLT 27720) National Law Tribunal.
* In the case of Venkatesh v.
Commissioner of Income Tax reported in (2000) 109 Taxman 78 (Madras) High Court of Madras.
* The Rajasthan Stamp Act,1998. Page 42 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 * Full Bench : Hon'ble High Court of Gujarat.
In the case of Chief Controlling Authority v. Nutal Mills Limited, Ahmedabad reported in 1977 GLR 409.
* Full Bench : Hon'ble High Court of Gujarat. In the case of President Kankaria Apartment Co-operative Housing Society Limited v. Chief Controlling Revenue Authority reported in 1984 (2) GLR 1188.
* Full Bench : Hon'ble High Court of Gujarat. In the case of Alembic Pharmaceuticals Limited v. Chief Controlling Revenue Authority in Stamp Reference No. 1 of 2012 dated 26.11.2013. (citation : 2014 (3) GLR 2255).
* Hon'ble Supreme Court. In the case of Alembic Pharmaceuticals Limited v. Chief Controlling Revenue Authority in Civil Appeal No. 4909 of 2018 (Arising out of Special Leave Petition (C ) No. 6174 of 2014) dated 05.04.2017).
Page 43 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 (Arising out of judgment and order dated 26.11.2013 in stamp Reference No. 1 of 2012 passed by the Hon'ble High Court of Gujarat).
* In the case of H.H. Shri Vishwesha Thirtha Swaminar and others v. State of Mysore and Anr., reported in (1972) 3 SCC
246.
* In the case of Commissioner of Commercial Taxes v. Bajaj Auto Limited reported in 2016 (16) SCC 83.
* In the case of Pirbhai Janubhai Shaikh v. B.R. Manepatil, Collector of Ahmedabad reported in 1965 GLR 554.
* In the case of Commissioner of Central Excise, Ahmedabad v. Solid and Correct Engineering Works and Ors., reported in (2010) 5 SCC 122.
* In the case of Commissioner of Sales Tax v. M/s. Bombay Sound Service reported in 1998 SCC Online Bom.43.
Page 44 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 * In the case of Hamendra Lal Roy and
Ors., v. Indo-Swiss Trading Co. Ltd., & Ors., reported in 1995 SCC Online Pat.19.
* In the case of Nagpur Electric Light and
Power Company Limited v. Regional
Director, Employees State Insurance
Corporation reported in AIR 1967 SC 1364.
38. She would also oppose the stand of the applicant in Stamp Reference No.3/2020 by contending that there is no error committed by the authority. On the contrary, learned Government Pleader Ms. Manisha Lavkumar Shah appearing on behalf of the authority has vehemently opposed the stand of the applicant and has submitted that there is no error committed by the authority. On the contrary, she would contend a meaningful interpretation is to be assigned to the relevant provisions and the amount has been determined. Article 20(d) prescribes Rs.25 crore of maximum for share amounts either market value and consideration amount or marked value of immovable property transferred whichever is more shall be considered and thereby 1% of it shall be stamp duty. It Page 45 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 has been submitted that transferor company has issued shares with premium of Rs.227.68 and it is included in para 14.1 with specific mention as 'consideration' and as such, premium, as stated above, is to be treated as part of consideration. Hence, under the provisions of Article 20(d) of the Stamp Act, amount paid for such amalgamation includes a share premium amount and as such, it is to be treated as part of consideration.
39. It has been submitted that for slump sale of Gopal Glass Works Limited and Jamnagar Dharampur Windmill Ltd., market value of immovable property of transferor company is more than the consideration paid by transferee company and as such, market value of Rs.11,09,33,734 being transferred has been considered and as such, amount of stamp duty payable shall be Rs.11,09,337/-. Further, it has been submitted that for the transferor company, at serial No.(2), Gopal Glass Works Ltd., market value of immovable property of transferor company is more than the market value of shares and therefore, amount of stamp duty payable being 1% comes Page 46 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 to Rs.1,49,73,840/- (1% of Rs.1,49,73,84,000/-). As a result of same, authority has rightly treated it as part of consideration.
40. Learned Government Pleader has further submitted that there is no misconception nor misreading of provisions of the Stamp Act. Hence, applicant is liable to pay stamp duty as determined by the authority. The judgments which have been relied upon are not of any assistance to the applicant.
41. It has been emphatically submitted that term 'consideration' for transfer refers clearly and naturally to that, which passed on the transferor company 'for' transferred property. To give true meaning to the word 'consideration', a reference is made to Law Lexicon and after referring to same, it has been contended that consideration for sale in the hands of the shareholders is the premium of shares. Once shareholder received consideration, it would be deemed as if owner has received consideration and in the hands of each Page 47 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 shareholder, this consideration is determined as 'premium' or 'share' and as such, by referring to few decisions, a contention is canvassed that premium amount has rightly been considered as part of consideration to be paid over the face value of shares. A reference is made to few decisions, i.e. (1) in the case of Li Taka Pharmaceuticals Ltd. and Another Vs. The State of Maharashtra and others reported reported in 1995 SCC OnLine Bom 67 and in the case of Hindustan Lever and Another Vs. State of Maharashtra and Another reported in (2004) 9 SCC 438.
42. So far as reference which has been made by the applicant about the order passed by learned Single Judge in Special Civil Application No.14597 of 2019 dated 20.12.2019 cannot have any assistance in view of fact that said judgment is stayed by order dated 10.2.2020 in Letters Patent Appeal No.125 of 2020 by Division Bench of this Court and as such, independent thereof, appropriate answer be assigned to the questions which are referred to.
Page 48 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
43. Shri Sandeep Singhi, learned counsel appearing for the applicant in S.R.No.7 of 2020 would contend that the first substantial question of law is similar to the one involved in S.R.Nos.5 and 6 of 2020 and substantial question of law Nos.3, 4 and 5 have also been addressed by the learned advocates appearing for the respective applicants in S.R.No.2 of 2020 and S.R.No.1 of 2021 and question No.6 relates to the question of law raised in S.R.Nos.5 and 6 of 2020 and as such, he prays for answering the same in favour of the applicants and against the revenue. In support of his submissions, he has relied upon the following judgments :
1. [1904] 2 Ch 268 - In re South African Supply and Cold Storage Company Wild v/ s Same Company.
2. 1990 (Supp) SCC 675 - Saraswati Industrial Syndicate Ltd. v/s Commissioner of Income Tax.
3. (2004) 121 Comp Cas 523 - In re Larsen and Toubro Limited
4. AIR 1956 SC 35 - The Member, Board of Revenue v/s Arthur Paul Benthall Page 49 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
5. Halsbury's Laws of England (Vol.
44(1)), 4th Edition reissue: Para 1015
6. 127 ER 467 - Bowen v/s Ashley
7. 128 ER 999 - Goodson v/s Forbes
8. 108 ER 1152 - Allen v/s Morrison
9. 108 ER 1036 - The King v/s Louth
10. (2015) 10 SCC 700 - Chief Controlling Revenue Authority v/s Coastal Gujarat Power Limited and others
11. (1995) 6 SCC 108 - Board of Revenue, U.P. v/s Electronic Industries of India
12. AIR 1966 SC 1342 - The Commissioner of Income-Tax, Patiala v/s. M/s. Shahzada Nand and Sons and others
14. (2005) 1 SCC 496 - District Registrar and Collector, Hyderabad and another v/s Canara Bank and others
15. AIR 1961 MADRAS 504 (FB) - Board of Revenue, Madras Chief vs. N. Narsimhan and another
16. AIR 1933 ALLAHABAD 321 (FB) -
Ram Swarup vs. Joti and another Page 50 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
44. Hence, he has prayed for the reference being answered in favour of the applicants. 44A. Having heard the learned advocates appearing for the parties, we proceed to answer the questions referred to this Court as under.
PREAMBLE
45. In S.R.Nos.4, 5 and 6 of 2020, the question of law Nos.I and IV raised therein for being answered and opined by this Court reads as under:
"Whether an order of the High Court under Section 394 of the Companies Act, 2013/Section 232 of the Companies Act, 2013, sanctioning a single composite scheme of arrangement, is not a single indivisible instrument that is not comprising or relating to several distinct matters or distinct transactions as contemplated by Section 5 of the Stamp Act and not subject to levy as such, considering the fact that the instrument covered under Article 20(d) of Schedule-I to the Stamp Act, would be the order of the High Court, and not the scheme sanctioned by such order?"
46. The incidental question which has been raised in S.R.No.4 of 2020 as question No.II is to the following Page 51 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 effect :
"Assuming that an order of the High Court under Section 232 of the Companies Act, 1956, sanctioning a single composite scheme of arrangement, albeit between multiple companies, is an instrument comprising or relating to several distinct matters or distinct transactions, whether as per Article 20(d) of Schedule-I to the Stamp Duty Act, stamp duty chargeable on such an order would not be calculated on the aggregate of amount pertaining to each of such distinct matters and is subjected to a maximum cap of Rs.25 Crores?"
47. The above referred questions being inter-linked and connected one with the other, we are of the considered view that it would be apt and appropriate that aforesaid questions are to be answered conjointly by considering the relevant provisions as answers to these questions are likely to overlap. Hence, they are taken up together, adjudicated and answered.
48. Explanation-III (c) of Article 20(d) of Schedule-I of the Gujarat Stamp Act has been the center of issue in these references and the question of law namely question No.1 referred to in S.R.Nos.1 of 2021 and 2 of 2020, Page 52 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 question No.2 in S.R.No.1 of 2021, question Nos.2 and 5 in S.R.No.2 of 2020 and 7 of 2020, question No.1 in S.R.Nos.3 of 2020 and 1 of 2021 are being dealt with collectively.
49. Question No.2 in S.R.No.3 of 2020 refers to interpretation of physical legislation. The interpretation of Section 5 of the Gujarat Stamp Act relating to single instrument - distinct matters is referable to question No.1 raised in S.R.Nos.5 of 2020 and 4 of 2020 and question No.4 in S.R.No.6 of 2020. Question Nos.2 and 1 in S.R.No.4 of 2020 and 7 of 2020, question No.1 in S.R.No.7 of 2020 and question No.2 in S.R.No.7 of 2020 relates to the said subject, whereas question No.6 in S.R.No.7 of 2020 relates to stamp duty payable in respect of properties situated outside the State. The questions referred to in S.R.No.1 of 2020 are being independently dealt with. Likewise, question No.3 in S.R.No.3 of 2020, question No.7 in S.R.No.7 of 2020, question No.1 in S.R.No.6 of 2020, question No.3 in S.R.No.6 of 2020, question No.2 in S.R.No.6 of 2020 and question No.4 in Page 53 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 S.R.No.7 of 2020 are being independently dealt with and accordingly, they are dealt with.
DISCUSSIONS AND FINDING
50. The taxing statutes are required to be strictly interpreted especially when the language used by the Legislature is plain and unambiguous. It is well-settled principles of law that, the intention of the Legislature while enacting a taxing provision would be taken into consideration while interpreting the relevant provisions. In Cape Brandy Syndicate vs. IRC, reported in (1921) 1 KB Page 64, it is observed :
"In a taxing statute one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption about a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used."
51. The Hon'ble Apex Court in the case of Member Secretary, Andhra Pradesh State Board for Page 54 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Prevention and Control of Water Pollution vs. Andhra Pradesh Rayons Ltd and others reported in AIR 1989 SC 611 has held that "to find out the intention of the legislation, if possible it should be found out from the language used in case of doubt. It has been further held :
"10.We fail to see that Rayon Grade Pulp could be considered even remotely connected as such with chemical industry or textile industry or paper industry. In all preparations, there is certain chemical process but that does not make all industries chemical industries. The expression "chemical" means, according to Collins English Dictionary. any substance used in or resulting from a reaction involving changes to atoms or molecules or used in chemistry. The Concise Oxford Dictionary, 8th Edition page 170 defines "chemical'' as made by or relating to, chemistry. Broadly and literally, in our opinion, it can be said that the Rayon Grade Pulp is neither chemical industry nor textile industry nor paper industry. We find it difficult on a broad and literal construction to bring the industry of the respondent into any of these categories. In other words, to find out the intention of the legislation, if possible it should be PG NO 387 found out from the language used in case of doubt. The purpose of legislation should be sought for to clarify the ambiguity only, if any. The fairest and most rational method, says Blackstone, to interpret the will of the legislator is by Page 55 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 exploring his intentions at the time when the law was made, by signs the most natural and probable. And these signs are either the words, the context, the subject matter, the effects and consequence, or the spirit and reason of the law. See Commentaries on the Laws of England by Blackstone (facsimile of 1st edition of 1765, University of Chicago Press, 1979 Vol. 1 p. 59.). The words are generally to be understood `in their usual and most known signification', although terms of art `must be taken according to the acceptation of the learning in each art, trade and science. If words happen still to be dubious, we may establish their meaning from the context, which includes the preamble to the statute and laws made by the same legislator on the same subject. Words are always to be understood as having regard to the subject matter of the legislation. See Cross Statutory Interpretation, 2nd Edition page 21."
52. The Hon'ble Apex Court in the case of the Commissioner of Income Tax, (Patiala) vs. M/s. Shahzada nand and Sons and Others reported in AIR 1966 SC 1342, has held to the following effect :
"8. Before we advert to the said arguments, it will be convenient to notice the relevant rules of construction. The classic statement of Rowlatt, J., in Cape Brandy Syndicate v. I.R.C. (3). still holds the field. It reads :
"In a Taxing Act one has to look merely at what is clearly said. There is no room for any Page 56 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used."
To this may be added a rider': in a case of reasonable doubt, the construction most beneficial to the subject is to be adopted. But even so, the fundamental rule of construction is the same for all statutes, whether fiscal or otherwise. "The underlying principle is that the meaning and intention of a statute must be collected from the plain and unambiguous expression used therein rather than from any notions which may be entertained by the court as to what is just or expedient." The expressed intention must guide the court. Another rule of construction which is relevant to the present enquiry is expressed in the maxim, generalia specialibus non derogant, which means that when there is a conflict between a general and a special provision, the latter shall prevail. The said principle has been stated in Craies on Statute Law, 5th Edn., at P. 205, thus :
"The rule is, that whenever there is a particular enactment and a general enactment in the same statute, and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply."
But this rule of construction is not of, universal application. It is subject to the condition that there is nothing in the general provision, expressed or implied, indicating an intention to the contrary : see Maxwell on Interpretation of Statutes, 11th Edn., at pp. Page 57 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 168-169. When the words of a section are clear, but its scope is sought to be curtailed by construction, the approach suggested by Lord Coke in Heydons case (1), yield better results :
"To arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope, and object of the whole Act : to consider, according to Lord Coke : (1) What was the law before the Act was passed; (2) What was the mischief or defect for which the law had not provided ; (3) What remedy Parliament has appointed ; and (4) The reason of the remedy."
53. Keeping the aforesaid principles in mind, we deem it appropriate to extract the relevant provisions of the Gujarat Stamp Act, 1958 (referred to as "the Stamp Act") namely the relevant provisions :
"The Gujarat Stamp Act, 1958
2. Definitions :-
(a) to (f) xxxxx
(g) "Conveyance" includes,-
(i) a conveyance on sale,
(ii) every instrument,
(iii) every decree or final order of any civil Court; [***] [(iv) every order made by National Company Law Tribunal under section 232 of the Companies Act, 2013 (18 of 2013) in respect Page 58 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 of a scheme for reconstruction of the company or companies involving merger or the amalgamation of any two or more companies and every order made by the Reserve Bank of India under section 44A of the Banking Regulation Act 1949 (10 of 1949) in respect of amalgamation or dissolution of Banking companies, or;] [(v) any writing or letter of allotment in respect of the premises, given to its members or allottee by a co-operative society registered or deemed to have been registered under the Gujarat Co-operative Societies Act, 1961 (Gujarat X of 1962),or a corporation or an association formed and registered under the Bombay Non-Trading Corporation Act, 1959 (Bombay XXVI of 1959) or the Gujarat Ownership Flat Act, 1973 (Gujarat 13 of 1973) as the case may be.] by which property, whether movable or immovable, or any estate or interest in any property is transferred to, or vested in, any other person, inter vivos, and which is not otherwise specifically provided for by Schedule I;
Explanation- For the purposes of this clause, an instrument whereby a co-owner of any property transfers his interest to another co- owner of the property and which is not an instrument of partition shall be deemed to be an instrument by which property is transferred inter vivos',]"
(h) to (k) xxxx Page 59 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
(l) "instrument" includes every document by which any right or liability is or purports to be created transferred limited extended extinguished or recorded but does not include a bill of exchange cheque promissory note bill of lading letter of credit policy of insurance transfer of share debenture proxy and receipt;
Explanation - The term "document" also includes any electronic record as defined in clause (t) of sub-section 91) of section 2 of the Information Technology Act, 2000." (21 of 2000).
5. Instruments relating to several distinct matters.- Any instrument comprising or relating to several distinct matters or distinct transactions shall be chargeable with the aggregate amount of the duties with which separate instruments, each comprising or relating to one of such matters or distinct transactions would be chargeable under this Act.
Article Description of instrument Proper stamp duty 20 (d) CONVEYANCE [Subject to maximum [so far as it relates to the twenty five scheme, for reconstruction crores rupees] of the company or -
companies involving merger or the amalgamation of any (i) an amount two or more companies by equal to [one an order of the National per cent] of Company Law Tribunal the aggregate under section 232 of the amount Companies Act, 2013 (18 of comprising of 2013) or for amalgamation the market Page 60 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 or dissolution of Banking value of share Companies by an order of issued or the Reserve Bank of India allotted in under section 44A of the exchange of or Banking Regulation Act, otherwise, or 1949 (10 of 1949)] the face value of such shares, [Explanation I - For the whichever is purpose of this Article [and higher and the subject to sub-item (a) of amount of item (ii) of clause (f) of consideration, article 45], an agreements if any, paid for to sell an immovable such property or an irrevocable amalgamation, power of attorney shall, in or case of transfer of the possession of such property (ii) an amount before, at the time of, or equal to [one after the execution of such percent] of the agreement or power of true market attorney, be deemed to be a value of the conveyance and the stamp immovable duty thereon shall be property chargeable accordingly: situated in the State of Provided that the provisions Gujarat of the of section 32 - A shall apply transferor mutatis mutandis to such company agreement or power of whichever is attorney as are applicable higher.] to a conveyance:
Provided further that where subsequently a conveyance is executed in pursuance of such agreement of sale, or an irrevocable power of Attorney, the stamp duty, if any, already paid and recovered on the agreement of sale or an irrevocable power of Attorney which is deemed to be a conveyance, Page 61 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 shall be adjusted towards the total duty leviable on the conveyance.] [Explanation II] - For the purposes of this Article, the expression "premises"
means any land or building or part of a building including any flat, apartment, tenement, shop or warehouse therein and includes:-
(i) gardens, grounds and out houses, if any, appertaining to such building or part of a building, and
(ii) any fittings affixed to such building or part of a building for the more beneficial enjoyment thereof] [Explanation III - for the purpose of clause (d), the market value of share-
(a) in relation of the transferee company whose shares are listed and quoted for trading on a stock exchange, means the market value of share as on the appointed date mentioned in the scheme of amalgamation or when appointed date is not so fixed, the date of [order of the National Company Law Tribunal or, as the case may be, the order of the Reserve Bank of India].Page 62 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
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(b) In relation to the transferee company, whose shares are not listed or listed but not quoted for trading on a stock exchange means the market value of the share issued or allotted with reference to the market value of share of the transferor company.
(c) Where the transferee company and transferor company, whose shares are not listed or listed but not quoted for trading on stock exchange means the face value of the share issued or allotted with reference to the face value of share of the transferee company.
54. Explanation-III (c) in Article 20(d) of Schedule-I of the Gujarat Stamp Act is the focal provision and as such, the said provision is extracted hereinbelow :
Article Description of instrument Proper stamp duty 20 (d) CONVEYANCE [Subject to maximum twenty [so far as it relates to the five crores scheme, for reconstruction of rupees] -
the company or companies involving merger or the (i) an amount amalgamation of any two or equal to [one per more companies by an order cent] of the of the National Company Law aggregate Tribunal under section 232 of amount Page 63 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 the Companies Act, 2013 (18 comprising of the of 2013) or for amalgamation market value of or dissolution of Banking share issued or Companies by an order of the allotted in Reserve Bank of India under exchange of or section 44A of the Banking otherwise, or the Regulation Act, 1949 (10 of face value of such 1949)] shares, whichever is [Explanation I - For the higher and the purpose of this Article [and amount of subject to sub-item (a) of consideration, if item (ii) of clause (f) of any, paid for such article 45], an agreements to amalgamation, or sell an immovable property or an irrevocable power of (ii) an amount attorney shall, in case of equal to [one transfer of the possession of percent] of the such property before, at the true market value time of, or after the of the immovable execution of such agreement property situated or power of attorney, be in the State of deemed to be a conveyance Gujarat of the and the stamp duty thereon transferor shall be chargeable company accordingly: whichever is higher.] Provided that the provisions of section 32 - A shall apply mutatis mutandis to such agreement or power of attorney as are applicable to a conveyance:
Provided further that where subsequently a conveyance is executed in pursuance of such agreement of sale, or an irrevocable power of Attorney, the stamp duty, if any, already paid and recovered on the agreement of sale or an irrevocable Page 64 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 power of Attorney which is deemed to be a conveyance, shall be adjusted towards the total duty leviable on the conveyance.] [Explanation II] - For the purposes of this Article, the expression "premises" means any land or building or part of a building including any flat, apartment, tenement, shop or warehouse therein and includes:-
(i) gardens, grounds and out houses, if any, appertaining to such building or part of a building, and
(ii) any fittings affixed to such building or part of a building for the more beneficial enjoyment thereof] [Explanation III - for the purpose of clause (d), the market value of share-
(a) in relation of the transferee company whose shares are listed and quoted for trading on a stock exchange, means the market value of share as on the appointed date mentioned in the scheme of amalgamation or when appointed date is not so fixed, the date of [order of the National Company Law Tribunal or, as the case may be, the order of the Reserve Bank of India].Page 65 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
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(b) In relation to the transferee company, whose shares are not listed or listed but not quoted for trading on a stock exchange means the market value of the share issued or allotted with reference to the market value of share of the transferor company.
(c) Where the transferee company and transferor company, whose shares are not listed or listed but not quoted for trading on stock exchange means the face value of the share issued or allotted with reference to the face value of share of the transferee company.
55. In the case of S.R.No.2 of 2020, the facts would disclose that the Company Court (High Court of Gujarat) passed an order sanctioning a composite scheme of arrangement between Troikaa Pharmaceuticals Limited ('TPL', for short) and Troikaa Exports Private Limited ('TEPL', for short) vide order dated 09.03.2016. Pursuant to the said scheme of approval, the windmill division of TPL - transferor was transferred and vested with the applicant - TEPL as an on-going concern and entire business of residual transferor was amalgamated with Page 66 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 applicant. The applicant was converted into a public limited company and was renamed as Troikaa Pharmaceuticals Limited. The certificate issued by Registrar of Companies on 15.06.2016 (Annexure-C in S.R.No.2 of 2020) would evidence this fact.
56. Section 5 of the Gujarat Stamp Act, 1958, mandates that any instrument comprising or relating to several distinct matters or distinct transactions shall be chargeable with the aggregate amount of the duties with which separate instrument, each comprising or relating to one of such instrument, or distinct transactions would be chargeable under the Act. The expression 'instrument' has been defined under Section 2(l) which reads as under :
"2(l) "instrument" includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit, policy of insurance, transfer of share, debenture, proxy and receipt."Page 67 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
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57. Section 2(g) defines the word or expression 'conveyance' and 2(g)(2) would take within its sweep every instrument as conveyance. Thus, the scheme which came to be sanctioned by the Company Court on 09.03.2016 would partake the character of instrument which is covered under Section 5 of the Stamp Act since it relates to transfer of windmill unit of transferor company to the applicant company and entire business of residual transferor company was amalgamated with the applicant, consideration of which was Rs.1.40 Crores and thereby the stamp duty payable would be Rs.1,40,000/- namely 1%. Insofar as amalgamation of residuary units and properties of transferor which was with the applicant namely TEPL was for consideration of the equity shares and preference shares as under :
"(a) 6,25,43,220 equity shares having face value of Rs.10/- have been issued by Applicant at premium of Rs.67. Thus, value of each share is Rs.77. Aggregate value of shares is Rs.481,58,27,940/ -.
(b) 6,29,700 preference shares having value of Rs.10/- each have been issued by Applicant. Thus, aggregate value of said Page 68 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 preference shares is Rs.62,97,000.
(c) 38,88,000 preference shares having value of Rs.10/- each have been issued by Applicant. Thus, aggregate value of said preference shares is Rs.3,88,80,000.
Thus, total value of shares issued is Rs.486,10,04,940/ - and the same is higher than total value of immovable properties in the State of Gujarat that are getting transferred. Hence, stamp duty payable for the said amalgamation would be Rs.4,86,10,049/ -."
58. It is an undisputed fact that both the transferor and the applicant company are not listed in any stock exchange. In such circumstances, Explanation-III (c) to Article 20(d) would provide an answer as to what would be the proper stamp duty namely the face value of the shares issued by the applicant are deemed to be its market value.
59. Article 20(d) stipulates that subject to maximum of Rs.25 Crores, there shall be a determination of 1% of the aggregate amount, comprising of the market value of shares issued or allotted in exchange of or the face value of such shares whichever is higher and the amount of Page 69 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 consideration, if any paid for such amalgamation or an amount equal to 1% of the true market value of the immovable properties situated in the State of Gujarat of the transferor company whichever is higher.
60. Explanation - III defines 'market value of share' in three situations namely,
(a) Where the shares of the transferee company are listed,
(b) Where the shares of transferee company are not listed, but the shares of the transferor company are listed, and
(c) Where the shares of neither transferor or transferee company are listed.
61. Explanation-III (c) stipulates that insofar as market value of share is concerned, in the case of shares of the transferor and the transferee company; both not being listed or listed but not quoted on the stock exchange, it is to mean the face value of the share issued or allotted with reference to the face value of shares of the transferee Page 70 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 company.
62. It is an undisputed fact that in the facts of the present case as disclosed from the case papers that shares of both the transferor and the applicant are not listed on any stock exchange. Thus, as per Explanation- III(c), the market value of the shares issued by the applicant is deemed to be its face value, irrespective of whether such shares are being issued at a premium or not.
63. As noticed hereinabove, Article 20 deals with conveyance. The applicable clause or clause which has been pressed into service by both the sides and rightly so would be sub-article (d) which can be construed as centre controversy in the present proceedings. 'Conveyance' as defined under the Stamp Act insofar as it relates to the scheme for reconstruction of the company or companies involving merger or the amalgamation of any work or more companies by an order of the National Company Law Tribunal under Section 232 of the Act, 2013 or under Page 71 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Section 394 of the Old Companies Act, 1956 or for amalgamation or dissolution of banking companies by an order of Reserve Bank of India under Section 44A of the Banking Regulations Act, 1949 would take within its sweep such instrument also for being defined as conveyance. For such type of instrument, the proper stamp duty which is prescribed is subject to maximum Rs.25 crore - sub-paragraph (i) an amount equal to 1% of aggregate amount comprising of market value of shares issued or allotted in exchange of or otherwise or the face value of such shares whichever is higher and the amount of consideration, if any paid for such amalgamation. Explanation III to clause (d) would indicate that for the purpose of clause (d), the market value of share is to be calculated on the basis of explanation given thereunder. It is a settled position of law that explanation added to a statutory provision is not a substantive provision under any of the terms as plain meaning of the words itself shows that it is merely to explain or clarify certain ambiguity which may have crept in the statutory Page 72 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 provision.
64. An explanation is at times appended to a section to explain the meaning of words contained in the section. It becomes a part and parcel of the enactment. The function of an explanation is to explain and the meaning and effect of the main provision to which it is an explanation and to clear the doubt or ambiguity that may arise if any. However, ultimately the intention of the legislature being paramount the words used by the legislature alone would prevail of its intent and it must be construed having regard to the context and in setting which they occur. The Hon'ble Apex Court in the case of S. Sundaram Pillai, Etc. vs. V.R. Pattabiraman Etc. [(1985) 1 SCC 591] has held:
"53.Thus, from a conspectus of the authorities referred to above, it is manifest that the object of an Explanation to a statutory provision is-
(a) to explain the meaning and intendment of the Act itself,
(b) where there is any obscurity or vagueness Page 73 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 in the main enactment, to clarify the same so a- to make it consistent with the dominant ob- ject which it seems to subserve,
(c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful,
(d) an Explanation cannot in any way inter-
fere with or change the enactment or any part thereof but where some gap is left which is relevant for the purpose of the Explanation, in order to suppress the mischief and advance the object of the Act it can help or assist the Court in interpreting the true purport and in- tendment of the enactment, and
(e) it cannot, however, take away a statutory right with which any person under a statute has been clothed or set at naught the working of an Act by becoming an hindrance in the in- terpretation of the same."
65. An explanation must be interpreted according to its own tenor. The construction of the explanation must depend upon its term and no theory of purpose can be entertained unless it is to be inferred from the language used in the legislature in that particular enactment. The Page 74 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 explanation must be read so as to harmonise with and clear up any ambiguity in the main section. It would not be used or construed so as to widen the ambit of the section.
66. It is now well settled that explanation added to a statutory provision is not a substantive provision in any sense of the term but as a plain reading of the word itself shows it is merely entertained to explain or clarify certain ambiguities which may have crept in the statutory provision. Sarathi on Interpretation of Statute while dwelling on the various aspects of the explanation observes as follows:
(a) The object of an explanation is to understand the Act in the light of the explanation;
(b) It does not ordinarily enlarge the scope of the original section which it explains, but only makes the meaning clear beyond dispute (page 329).
67. Pindra in Interpretation of Statute (5th Edition) Page 75 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 at page 67 states thus:
"An explanation does not enlarge the scope of the original section that it is supposed to explain. It is axiomatic that explanation only explains and does not expand or add to the scope of original section. The purpose of an explanation is, however, not to limit the scope of the main provision ....."
68. The construction of the explanation must depend upon its terms and no theory of purpose can be entertained unless it is to be inferred from the language used. An explanation 'must be interpreted' according to its own tenor. The Hon'ble Apex Court in the case of Pioneer Urban Land and Infrastructure Limited vs. Union of India [(2019) 8 SCC 416] has reiterated the principles of law enunciated in the case of Hira Lal Rattanlal vs. State of U.P. [(1973) 1 SCC 216] followed in the case of S. Sundaram Pillai referred to supra and held as under:
"97. It was also argued that an explanation does not enlarge the scope of the original section and for this purpose S. Sundaram Page 76 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Pillai (supra) was relied upon. This very judgment recognises, in paragraph 46, that an explanation does not ordinarily enlarge the scope of the original Section. But if it does, effect must be given to the legislative intent notwithstanding the fact that the legislature has named a provision as an explanation. [See Hiralal Ratanlal Etc. v. State of U.P and Anr. Etc. (1973) 1 SCC 216 at 225, followed in paragraph 51 of Sundram Pillai (supra)]. In any case, it has been found by us that the explanation was added by the Amendment Act only to clarify doubts that had arisen as to whether home buyers/allottees were subsumed within Section 5(8)(f). The explanation added to Section 5(8)(f) of the Code by the Amendment Act does not in fact enlarge the scope of the original Section as home buyers/allottees would be subsumed within Section 5(8)(f) as it originally stood as has been held by us hereinabove. As a matter of statutory interpretation, that interpretation, which accords with the objects of the statute in question, particularly when we are dealing with a beneficial legislation, is always the better interpretation or the "creative interpretation" which is the modern Page 77 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 trend of authority, and which is reflected in the concurring judgment of Eera (through Dr. Manjula Krippendorf) v. State (NCT of Delhi) and Anr. (2017) 15 SCC 133 at paragraphs 122 and 127. This argument must, therefore, also be rejected."
69. The purpose of use of explanation to a provision has been succinctly explained by the Hon'ble Apex Court in the case of K. Jagadeesan vs. Union of India [(1990) 2 SCC 231] as under:
"37.Sri Ramachandran urged that the introduction, in the year 1984, of Explanation I to Section 40(b) was not to effect or bring about any change in the law, but was intended to be a mere legislative exposition of what the law has always been. An 'Explanation', generally speaking, is intended to explain the meaning of certain phrases and expressions contained in a statutory provision. There is no general theory as to the effect and intendment of an Explanation except that the purposes and intendment of the 'Explanation' are determined by its own words. An Explanation, depending on its Page 78 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 language, might supply or take away something from the contents of a provision. It is also true that an Explanation may - this is what Sri Ramachandran suggests in this case - be introduced by way of abundant caution in order to clear any mental cobwebs surrounding the meaning of a statutory provision spun by interpretative errors and to place what the legislature considers to be the true meaning beyond controversy or doubt. Hypothetically, that such can be the possible purpose of an 'Explanation' cannot be doubted. But the question is whether in the present case, Explanation I inserted into Section 40(b) in the year 1984 has had that effect.
38. The notes on clauses appended to the Taxation Laws (Amendment) Bills, 1984, say that clause 10 which seeks to amend Section 40 will take effect from April 1, 1985 and will, accordingly, apply in relation to the assessment year 1985-86 and subsequent years. The expression prospective operation and effectuation of the 'Explanation' might, perhaps, be a factor necessarily detracting from any evincement of the intent on the part Page 79 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 of the legislature that the Explanation was intended more as a legislative exposition or clarification of the existing law than as a change in the law as it then obtained. In view of what we have said on point (c) it appears unnecessary to examine this contention any further."
70. The Hon'ble Apex Court in the case of Aphali Pharmaceuticals Limited vs. State of Maharashtra [(1989) 4 SCC 378] has reiterated that legislative intent should be the paramount while holding that schedule in an Act of parliament is a mere question of drafting and explanation to the schedule amounts to an explanation in the Act itself and held :
"31. A Schedule in an Act of Parliament is a mere question of drafting. It is the legislative intent that is material. An Explanation to the Schedule amounts to an Explanation in the Act itself. As we read in Halsbury's Laws of England, Third Edition, Vol. 36, para 551:
"To simplify the presentation of statutes, it is the practice for their subject matter to be Page 80 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 divided, where appropriate, between sections and schedules, the former setting out matters of principle, and introducing the latter, and the latter containing all matters of detail. This is purely a matter of arrangement, and a schedule is as much a part of the statute, and as much an enactment, as is the section by which it is introduced." The schedule may be used in construing provisions in the body of the Act. It is as much an act of Legislature as the Act itself and it must be read together with the Act for all purposes of construction. Expressions in the Schedule cannot control or prevail against the express enactment and in case of any inconsistency between the schedule and the enactment the enactment is to prevail and if any part of the schedule cannot be made to correspond it must yield to the Act. Lord Sterndale, in Inland Revenue Commissioners v. Gittus, [1920] 1 K.B. 563 said:
"It seems to me there are two principles of rules of interpretation which ought to be applied to the combination of Act and Schedule. If the Act says that the Schedule is to be used for a certain purpose and the Page 81 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 heading of the part of the Schedule in question shows that it is prima facie at any rate devoted to that purpose, then you must read the Act and the Schedule as though the Schedule were operating for the purpose, and if you can satisfy the language of the section without extending it beyond that purpose you ought to do it. But if in spite of that you find in the language of the Schedule words and terms that go clearly outside that purpose, then you must give effect to them and you must not consider them as limited by the heading of that part of the Schedule or by the purpose mentioned in the Act for which the Schedule is prima facie to be used. You cannot refuse to give effect to clear words simply because prima facie they seem to be limited by the heading of the Schedule and the definition of the purpose of the Schedule contained in the Act."
71. It is a trite law that explanation cannot operate as 'exception' or 'proviso' it may only explain and may not expand or add to the scope of the original section. In certain circumstances, it could introduce a fiction or Page 82 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 settle a matter of controversy. The construction of an explanation would depend upon its term and no theory of purpose can be entertained unless it is be inferred from the language used in the legislature in that particular enactment.
72. An explanation may be added to include something within or to exclude something from the ambit from the main enactment or the connotation of some words occurring in it. An explanation would be normally read so as to harmonise with and clear up any ambiguity in the main section and it would not be construed so as to widen the ambit of the section.
73. An explanation can also be incorporated by the legislature out of abundant caution or to be on the safe side - ex-abundanti cautela.
74. In this background, the interpretation of the words or expression 'market value of share' as is found in Article 20(d) viz. the corresponding column of the said entry for levy a proper stamp duty will have to be necessarily read Page 83 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 in context of Explanation III whereunder the legislature has clearly held for the purpose of application of clause
(b), the market value of share will have to be necessarily done as explained in clauses (a) to (c) thereunder viz. where the market value of share issued or allotted in explanation of or otherwise, if it relates to a share of transferee company whose shares are listed; or (b) where shares of transferee company are not listed, but the shares of transnferor are listed; or (c) where the shares of neither of the companies viz. transferor or transferee companies are listed.
75. It is an undisputed fact in the instant case that shares of both transferor and the applicant (Stamp Reference No.2/2020 and S.R.No.1/2021) are listed in any stock exchange. Thus, explanation (c) would be attracted for the purpose of determining the market value of share vis-à-vis application of Article 20(d). As per Explanation III (c), the market value of shares issued by the applicant company is deemed to be its face value, irrespective of whether such shares are being issued at a premium or Page 84 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 not.
76. There cannot be any dispute to the fact that the Stamp Act is a fiscal statute and its provision being required to be strictly construed. For this proposition, the judgment of the Hon'ble Apex Court in the case of Board of Revenue, Uttar Pradesh vs. Rai Saheb Sidhnath Mehrotra [AIR 1965 SC 1092] can be looked into whereunder it has been held:
"9. Before we considered the facts of this case, we may mention that it is plain from the explanation that it is only the unpaid mortgage money that is deemed to be part of the consideration. If the mortgage money has been paid off by the date of the conveyance the explanation does not require it to be added to the consideration. If the mortgage money has been paid off by the vendee before the date of the sale, as part of the consideration, it would be included in the amount leviable with stamp duty under Art. 23, but not under the explanation. The conveyance deed would, in the above eventuality, recite the fact that so much Page 85 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 money has been paid to the mortgagee and it would be the consideration expressed in the deed."
77. We need to hardly say that the Stamp Act is a taxation statute and must be construed strictly and the two impact are equally possible, the meaning in favour of the subject must be given effect too.
78. The Hon'le Apex Court in the case of Commissioner of Income Tax-III vs. M/s. Calcutta Knitwears [(2014) 6 SCC 444] has held that machinery provisions must be construed to effectuate the objectives and purpose of statute. It has been further held that:
"20. Section 158-BD of the Act provides for "undisclosed income" of any other person. Before we proceed to explain the said provision, we intend to remind ourselves of the first or the basic principles of interpretation of a fiscal legislation. It is time and again reiterated that the courts, while interpreting the provisions of a fiscal legislation should neither add nor subtract a word from the provisions of instant meaning Page 86 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 of the sections. It may be mentioned that the foremost principle of interpretation of fiscal statutes in every system of interpretation is the rule of strict interpretation which provides that where the words of the statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule (Swedish Match AB v. Securities and Exchange Board, India, AIR 2004 SC 4219, CIT v. Ajax Products Ltd. [1965] 55 ITR 741 (SC)).
34. It is the duty of the court while interpreting the machinery provisions of a taxing statute to give effect to its manifest purpose. Wherever the intention to impose liability is clear, the Courts ought not be hesitant in espousing a commonsense interpretation to the machinery provisions so that the charge does not fail. The machinery provisions must, no doubt, be so construed as would effectuate the object and purpose of the statute and not defeat the same (Whitney v. Commissioners of Inland Revenue 1926 A C 37, CIT v. Mahaliram Ramjidas (1940) 8 ITR 442, Indian United Page 87 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Mills Ltd. v. Commissioner of Excess Profits Tax, Bombay [1955] 27 ITR 20(SC), and Gursahai Saigal v. CIT, Punjab [1963] 1 ITR 48(SC); Commissioner of Wealth Tax, Meerut v. Sharvan Kumar Swarup & Sons, (1994) 6 SCC 623; CIT v. National Taj Traders, (1980) 1 SCC 370; Associated Cement Company Ltd. v. Commercial Tax Officer, Kota and Ors., (48) STC 466). Francis Bennion in Bennion on Statutory Interpretation, 5th Ed., Lexis Nexis in support of the aforesaid proposition put forth as an illustration that since charge made by the legislator in procedural provisions is excepted to be for the general benefit of litigants and others, it is presumed that it applies to pending as well as future proceedings."
79. The stand of the Revenue that in common business parlance the expression 'face value' is the value of assigned to a share when it is issued to be treated as on par with market value for the purpose of computation of one part of the aggregate cannot be astute for reasons more than one. The principle of ejusdem generis to invoking applicability of its rules, there must be genes Page 88 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 category, specific words and same would be applied not to object but to something which can be called as a class or kind of object where this is lacking rule will not apply and mention of single species will not constitute genes. This proposition gets its support from the authoritative principles of the Hon'ble Apex Court in the case of Union of India vs. Manraj Enterprises [(2022) 2 SCC 331] whereunder it has been held:
"12.2 Insofar as argument based on the principle of ejusdem generis is concerned, the Division Bench has held that that is not applicable in the present case. We find that it is rightly so held. Ejusdem generis is the rule of construction. The High Court has negated this argument in the following manner:
(Jaiprakash Associates Ld. V. Tehri Hydro Development Corpn., 2012 SCC OnLine Del 6213] "18. The rule of ejusdem generis guides us that where two or more words or phrases which are susceptible of analogous meaning are coupled together, a noscitur a sociis, they are to be understood to mean in their cognate sense and take colour from each other but only if there is a distinct genus or a category.Page 89 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Where this is lacking i.e., unless there is a category, the rule cannot apply." As rightly held, the rule of ejusdem generis would be applied only if there is distinct genus or a category, which is lacking in the instant case. This rule is applicable when particular words pertaining to a clause, category or genus are followed by general words. In such a situation, the general words are construed as limited to things of same kind as those specified. In that sense, this rule reflects an attempt "to reconcile incompatibility between the specific and general words in view of the other rules of interpretation that all words in a statute are given effect, if possible, that a statute is to be construed as a whole and that no words in a statute were presumed to be superfluous". [See Lokmat Newspapers (P) Ltd. v. Shankarprasad [Lokmat Newspapers (P) Ltd. v. Shankarprasad, (1999) 6 SCC 275]."
80. A perusal of Article 20(d)(i) would indicate that aggregate amount comprising either of the market value of share or the face value of such share whichever is higher issued or allotted in exchange and the amount of Page 90 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 consideration, if any paid for such amalgamation would be liable to duty of 1% of such aggregate amount. This provision clearly indicates that so far as the words 'share' and 'consideration' are concerned, they are altogether different. Explanation III (c) clearly indicates that where the transferee or transferor company whose shares are not listed or not quoted for trading on stock exchange, face value of share issued or allotted would be with reference to the said face value, as indicated thereunder and as such to consider the premium on such share as part of consideration paid for such amalgamation is nothing but reiterating or incorporating an addition which is not mentioned in the provision itself, which is impermissible particularly while interpreting a fiscal statute. As such, the contention raised by the Revenue in this regard cannot be accepted. The scheme which came to be sanctioned by the Company Court viz. the composite scheme of arrangement pursuant to the sanction of the said scheme it transpired as under:
(i) Windmill division of the transferor was Page 91 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 transferred and vested in the applicant as an ongoing concern;
(ii) Entire business of residual transferor was amalgamated with the applicant;
(iii) Applicant was converted into a public limited company; and
(iv) Applicant was renamed as Troikaa Pharmaceuticals Limited.
81. As far as amalgamation of residuary units and properties of transferor to the applicant is concerned, (a) 6,25,43,220 equity shares having face value of Rs.10 have been issued by the applicant at premium of Rs.67, 6,29,700 preferential shares having face value of Rs.10 have been issued by the applicant; and 38,88,000 preferential shares having face value of Rs.10 each have been issued by the applicant. On the basis of the aggregate value of shares which includes face value and the premium value the amount of stamp duty payable has been arrived at Rs.4,86,10,049/-, whereas on the face of Page 92 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 shares and further stamp duty on transfer of windmill unit to the transferee company for which consideration of Rs.1,40,00,000/-, the total stamp duty payable would 1% of the consideration, i.e. Rs.1,40,000/- viz. the aggregate value of shares being Rs.67,06,09,200/- plus consideration for transfer of windmill unit being Rs.1,40,00,000/- (Rs.67,06,092 + Rs.1,40,000 = Rs.68,46,092). The Revenue Authorities have held that the shares have been issued for consideration of amalgamation since such shares are being issued at a premium, its market value cannot be calculated on the basis of the face value of such shares. It has been the contention of the Revenue Authorities that in case of non- listed companies the stamp duty is required to be calculated by aggregating face value with consideration. In other words, it is claimed that amount of premium is a 'consideration' other than shares as referred to in Article 20(d)(i) of Schedule I of the Stamp Act. A plain reading of Article 20(d)(i) would reveal that the stamp duty chargeable on an instrument covered under Article 20(d) Page 93 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 is an amount equal to 1% of the aggregate amount comprising (i) the market value of shares issued or allotted in exchange of or otherwise, or face value of such shares, whichever is higher; (ii) the amount of consideration if any paid for such amalgamation. Therefore, it would be clear that amount of consideration referred to under Article 20(d)(i) is separate and distinct from the 'market value of share'. Therefore, premium being a part of market value of the share, such premium cannot be treated as amount of consideration.
82. The Revenue Authorities have treated premium as a part of market value of their shares in the respective orders dated 19.8.2016 and 19.11.2019. Premium is not distinct from the shares and cannot exist apart from the shares. The premium is a part of the entire value of the share. Same is also clear from the explanation found under Article 18 of the Gujarat Stamp Act which explains that 'value of shares, scrip or stock includes the amount of premium, if any', wherein the legislature has clearly clarified as to how the value of shares includes Page 94 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 the amount of premium if any. However, insofar as the instrument defined or covered under Article 20(d) of Schedule I to the Stamp Act are concerned, deeming fiction viz. for the purpose of clause (d) the market value of share has been clearly indicated under clause (a) to (c) of Explanation III viz. the face value of shares issued alone is required to be considered as its market value. In that view of the matter, the arguments now put forth by the learned Government Pleader to contend that the words 'aggregate' is to be considered as 'consideration' for such amalgamation cannot be accepted. Further contention that premium has to be construed as consideration for the purpose of Article 20(d) though at first blush looks attractive, it is not so, inasmuch as the intent of the legislature as is evident from the Explanation III depicting the mode, method and manner in which it requires to be calculated has been delineated. The word 'premium' has been defined in Law Lexicon, 6th Edition as under:
"Share premium - The amount by which the Page 95 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 issue price of a share exceeds the nominal value. This normally occurs when a fresh issue of shares is made some time after the first issue. Under the Companies Act, 1985, the value of the share premium must be credited to a share premium account.
The excess of the issue price of shares over their face value.
On a new issue of shares, a premium charged on the nominal value of the shares if it seems that the real value is likely to be much higher."
83. The premium is part of the entire value of the share. The same is also clear from the provision of Article 18 of Schedule-I of the Stamps Act, wherein legislature has clarified as to how the value of the shares includes the amount of premium, if any. However, so far as the instruments covered under the Article 20(d) of Schedule-I of the Stamps Act are concerned, we are of the considered view that in view of the deeming fiction under Explanation - III (c) the face value of the shares issued by Page 96 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 applicant is required to be considered as its market value.
84. In this background, a plain reading of Explanation III
(c) is indicative of the fact that where the transferee or transferor companies whose shares are not listed or listed but not quoted for trading on a stock exchange, means the face value of the share issued or allotted, as indicated in clause (c) to Explanation III and therefore to import the words 'premium' to be part of such share or as part of consideration paid for such amalgamation is nothing but reiterating or incorporating in addition to what has been contemplated by the legislature and which is not mentioned in the provision. The Hon'ble Supreme Court in R.I. Hospital Trust Company, Administrator vs. Arthur H. Armington et al, Assessors of Taxes [21 R.I. 33 (1898)], has held as under:
"The premium for which the bonds might sell in the market is only an incident of the bonds and cannot exist apart therefrom. It goes to make up the value thereof, and, as said by plaintiffs, it is well understood that the expectation of it is a strongly inducing motive Page 97 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 for the original purchase of such bonds."
85. The premium is not something distinct from the above and what exists apart from the above, it is inherent it and goes with it.
86. The Hon'ble Apex Court in the case of Commissioner of Income Tax (Central), Calcutta vs. Standard Vacuum Oil Company [AIR 1966 SC 1993] has explained the expression 'premium' as under:
"7. Under the Companies Act, 1913, shares could be issued for cash or against transfer of property, and it is not claimed that under the statute law in the State of Delaware a different rule prevailed at the time when the assessee company took over the assets of the transferor companies. The Indian Companies Act also places no restriction upon a company issuing shares for a consideration which exceeds the par value of the shares, and there is no evidence on the record that in the State of Delaware there is such a restriction. A share is not a sum of money : it represents an interest measured by a sum of money and Page 98 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 made up of diverse rights contained in the contract evidenced by the articles of association of the Company. In the absence of any restriction in the law of Delaware against the issue of shares otherwise than for cash, when shares are issued for consideration other than cash the value of the assets transferred in excess of the par value of shares issued would be regarded as premium for purposes of our system of law. No serious argument has been advanced before us on behalf of the Commissioner controverting this part of the case."
87. Turning our attention back to the article in issue viz. Article 20 of the Gujarat Stamp Act, we are unable to accept the stand of the Revenue that stamp duty is required to be calculated on the aggregate face value and additional consideration received by the transferor company for transfer of its shares in favour of the transferee company nor the contention that additional amount that is received by the transferor company is the share premium. If that were to be the intention of the legislature, they would have said so expressly in Article Page 99 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 20(d) or explanation thereunder. This is more probable view in view of the fact that wherever the word 'premium' is to be mentioned or incorporated, same is expressly indicated in the relevant articles of the Stamp Act. A perusal of Article 18 which deals with the certificate or other document which may be charged with the stamp duty when read with the explanation provided thereunder, it would indicate that for the purpose of said article 'the value of shares, scrip or stock' would 'include the amount of premium, if any'. Thus, if there have been any intention to include the premium as a part of consideration, same would have been provided clearly under Article 20(d)(i). Clause (i) will have to be read in two compartments viz. aggregate amount consisting of either (i) market value; or (ii) face value of share, whichever is higher and the amount of consideration, if any, paid for amalgamation and as such it appears to us that the word 'premium' cannot be read or added as part of consideration as tried by the authority. It would not be out of context also to refer the definition clause of market Page 100 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 value as defined under Section 2(n)(a) which defines the market value as under:
"2(na) "market value", in relation to any property which is the subject matter of an instrument means the price which such property would have fetched if sold in open market on the date of execution of such instrument;"
88. A plain reading of the above provision would indicate that market value is the price what a seller expects and a bona fide purchaser is willing to pay and as such for the purpose of imposition of duty, Article 20(d)(i) cannot be read in the manner in which the Revenue has proposed. The aggregate amount which has been mentioned in the said provision as indicated above being in two components and the legislature having though fit not to incorporate the said meaning in the provision, it is not open for this Court to re-write the provision or to add which is not provided in the provision itself.
89. It would be of benefit to note at this juncture the Page 101 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 recently propounded judgment of the Hon'ble Apex Court in the case of Ebix Singapore Pte Ltd vs. Committee of Creditors of Educomp Solution Limited and others [(2022) 2 SCC 401] whereunder the Hon'ble Apex Court has enunciated of judicial restraint in the matter of interpretation of economic statute and the observation made therein would be a benefit to be noted which reads:
"158. Judicial restraint must not only be exercised while adjudicating upon the constitutionality of the statute relating to economic policy but also in matters of interpretation of economic statutes, where the interpretative maneuvers of the Court have an effect of transgressing into the law- making power of the legislature and disturbing the delicate balance of separation of powers between the legislature and the judiciary. Judicial restraint must be exercised in such cases as a matter of prudence, since the court neither has the necessary expertise nor the power to hold consultations with stakeholders or experts to decide the direction of economic policy. A court may be Page 102 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 inept in laying down a detailed procedure for exercise of the power of withdrawal or modification by a successful Resolution Applicant without impacting the other procedural steps and the timelines under the IBC which are sacrosanct. Thus, judicial restraint must be exercised while intervening in a law governing substantive outcomes through procedure, such as the IBC. In this case, if Resolution Applicants are permitted to seek modifications after subsequent negotiations or a withdrawal after a submission of a Resolution Plan to the Adjudicating Authority as a matter of law, it would dictate the commercial wisdom and bargaining strategies of all prospective Resolution PART J Applicants who are seeking to participate in the process and the successful Resolution Applicants who may wish to negotiate a better deal, owing to myriad factors that are peculiar to their own case. The broader legitimacy of this course of action can be decided by the legislature alone, since any other course of action would result in a flurry of litigation which would cause the delay that the IBC seeks to disavow."Page 103 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
90. In the background of the Hon'ble Apex Court in the case of Berger Paints (India) Limited vs. Commissioner of Income Tax [(2017) 13 SCC 726] as to certain extent explained the word or expression 'premium' in the background of Income Tax Act, 1961 which would be a benefit and same is noted hereinbelow:
"16.The Division Bench of the High Court in the impugned order examined the question lucidly. The learned Judge T.S. Thakur, J. (as His Lordship then was and later became CJI) speaking for the Bench held as under:
"7. A careful reading of the above would show that in the case of an Indian company like the appellant, the aggregate amount of expenditure cannot exceed 2.5% of the capital employed in the business of the Company. The crucial question, therefore, is as to what is meant by capital employed in the business of the Company for it is the amount that represents such capital that would determined the upper limit to which the amount of allowable deduction can go. The expression has been given a clear and Page 104 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 exhaustive definition in the explanation to sub-section (3). It reads as:
"(b) .....................................................................
.............................."
"8. The above clearly shows that capital em- ployed in the business of the company is the aggregate of three distinct components, namely, share capital, debentures and long term borrowings as on the dates relevant un- der sub-clauses(i) and (ii) of Clause(b) of the explanation extracted above. The term 'long term borrowing' has been defined in clause
(c) to the explanation. It is nobody's else that the premium collected by the Company on the issue of shares was a long term borrowing ei-
ther in fact or by a fiction of law. It is also no- body's case that the premium collected by the Company was anywhere near or akin to a debenture. What was all the same argued by the counsel for the appellant was that pre- mium was a part of the share capital and had therefore to be reckoned as 'capital employed in the business of the company'. There is, in our view, no merit in that contention. The Tri- bunal has pointed out that the share capital of the Company as borne out by its audited ac- Page 105 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 counts is limited to Rs.7,88,19679/-. The com- pany's accounts do not show the reserve and surplus of Rs.19,66,36,734/- as a part of its is- sued, subscribed and paid up capital. It is true that the surplus amount of Rs.19,66,36,734/- is taken as part of share holders fund but the same was not a part of the issued, subscribed and paid up capital of the Company. Explanation to Section 35D(3) of the Act does not include the reserve and surplus of the Company as a part of the capi- tal employed in the business of the Company. If the intention was that any amount other than the share capital, debentures and long term borrowings of the Company ought to be treated as part of the capital employed in the business of the company, the Parliament would have suitably provided for the same. So long as that has not been done and so long as the capital employed in the business of the Company is restricted to the issued share capital, debentures and long term borrow- ings, there is no room for holding that the premium, if any, collected by the Company on the issue of its share capital would also con- stitute a part of the capital employed in the business of the Company for purposes of de- Page 106 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 duction under Section 35D. The Tribunal was, in that view of the matter, perfectly justified in allowing the appeal filed by the Revenue and restoring the order passed by the Assess- ing Officer."
17. We are in complete agreement with the view taken by the High Court quoted supra as, in our considered opinion, the well-rea- soned judgment/order of the High Court cor- rectly explains the true meaning of the ex- pression employed in sub-section 3(b) of Sec- tion 35D read with Explanation (b) quoted above, calling no interference in the appeals.
18. In our considered opinion also, the "pre- mium amount" collected by the Company on its subscribed issued share capital is not and cannot be said to be the part of "capital em- ployed in the business of the Company" for the purpose of Section 35D(3)(b) of the Act and hence the appellant-Company was rightly held not entitled to claim any deduction in re- lation to the amount received towards pre- mium from its various shareholders on the is- sued shares of the Company.
19. This we say for more than one reason: Page 107 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 19.1 First, if the intention of the Legisla-
ture were to treat the amount of "premium" collected by the Company from its sharehold- ers while issuing the shares to be the part of "capital employed in the business of the com- pany", then it would have been specifically said so in the Explanation(b) of sub-section(3) of Section 35D of the Act. It was, however, not said.
21. This Court in speaking through the learned Judge J.C. Shah, J. (as His Lordship then was and later became CJI) after examin- ing the issue in the context of Para D read with its Explanation held that "share premium account" was liable to be included in the paid up capital for the purposes of computing re- bate. One of the reasons to allow such inclu- sion with the paid up capital was that such in- clusion was permitted by the specific words in the Explanation. Such was, however, not the case here."
91. In the aforesaid analysis, we are of the considered view that the word 'premium' attached to the share cannot be read as part and parcel of Article 20(d)(i) as Page 108 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 sought to be canvassed since it would be doing violence to the provisions of the Act and reading something into the provision which is not to be found in the statute and as the legislature has not contemplated of including the expression 'premium' and has restricted to the 'face value' alone as indicated in clause (c) to Explanation III of sub-article (d) of Article 20 of the Gujarat Stamp Act.
92. In view of the aforestated discussions and finding recorded by us, we proceed to answer the questions referred as under :
Sr. Stamp Question Answer No Reference referred for No. adjudication 1 2/2020 Que. No.1 In view of explanation III (c) to & Article 20(d) of Schedule I of 1/2021 the Gujarat Stamp Act, 1958, the face value of the shares issued is to be considered as its market value.
2 3/2020 Que. No.2 Yes, the respondents have erred in law in not giving strict and literal interpretation to the Gujarat Stamp Act, 1958 and have attempted to read words into the entry No.20(d)(1) which is not expressly found in the statute.
3 1/2021 Que. No.2 The amount of premium even if any cannot form part of face Page 109 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 value of share in view of deeming fiction provided under clause (c) of the Explanation III to Article 20(d).
4 2/2020 Que.Nos.2 Treating the fair value of the & and 5 share of transferee company 7/2020 issued under the scheme approved by the Company Court /NCLT where neither of the companies are listed or listed but not quoted for trading on a stock exchange as consideration under Article 20(d)(1) of Schedule-I would not be ultra vires and illegal and it would be intra-vires and in consonance with Explanation-III as it would indicate recurring or calculating the market value of share for the purpose of clause
(d).
5 3/2020 Que.No.1 Yes, the respondents erred in holding the share premium amount to be the part of market value of shares for the purpose of computation of stamp duty under clause (c) of Explanation III to Article 20(d) of Schedule-I of the Stamp Act, 1958, as it does not provide for adding the word 'premium' into 'market value of share', which is otherwise defined in explanation to Article 18 to include the amount of premium.
6 1/2021 Que.No.3 Yes, the Chief ControllingRevenue Authority erred in placing reliance upon the Page 110 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 judgment dated 20.12.2019 passed in Special Civil Application No.14597 of 2019 when same has been stayed by order dated 10.02.2020 passed in Letters Patent Appeal No.125 of 2017.
7 3/2020 Que.No.2 Yes, the respondents erred in not appreciating the fact that fiscal legislation like Gujarat Stamp Act, 1958, are required to give strict and literal interpretation and there being no scope of reading something into the entry which is not expressly mentioned in the statute.
93. In S.R.Nos.4, 5 and 6 of 2020, question Nos.1 and 4 which are common in these three references have been raised. For the purpose of convenience and immediate reference, they are extracted hereinbelow:
"Whether an order of the High Court under Section 394 of the Companies Act, 1956, sanctioning a single composite scheme of arrangement, is not a single indivisible instrument that is not comprising or relating to several distinct matters or distinct transactions as contemplated by Section 5 of the Stamp Act and not subject to levy as such, Page 111 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 considering the fact that the instrument covered under Article 20(d) of Schedule-I to the Stamp Act would be the order of the High Court and not the scheme sanctioned by such order?
94. Brief facts of each case are narrated hereinbelow for the purpose of convenience.
RE : STAMP REFERENCE NO.4 OF 2020 :
95. A composite scheme of arrangement between Adani Gas Holdings Limited (AGHL), Adani Gas Limited (AGL) and Adani Enterprises Limited (AEL) was sanctioned by NCLT on 03.08.2018. Pursuant to the said scheme being sanctioned AGHL stood amalgamated with AGL and the gas sourcing and distribution business of AEL was demerged and vested into AGL. The Collector held that pursuant to the composite scheme approved by NCLT demerging has taken place and as such the instrument is covered under Section 5 of the Stamp Act. It is the stand of the applicant that the instrument is an order sanctioning a single composite scheme and therefore cannot be treated as an instrument comprising of Page 112 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 separate and distinct matters or transactions covered under Section 5. While denying the market value of shares has been determined by the authorities, stamp duty is required to be calculated on the aggregate of the market value of all the shares issued and in view of the cap prescribed under Article 20(d), the total stamp duty payable is only Rs.25 Crores and not Rs.2,33,65,000/- plus Rs.27,33,65,000/-.
RE : STAMP REFERENCE NO.5 OF 2020 :
96. The Company Court of High Court of Gujarat sanctioned a composite scheme of arrangement between
(i) Adani Enterprises Limited (AEL), (ii) Adani Port and Special Economic Zone Limited (APSEZ), (iii) Adani Power Limited (APL), (iv) Adani Transmission Limited (ATL) and (v) Adani Mining Private Limited (AMPL). Pursuant to the sanction of the said scheme (i) the port undertaking of AEL was transferred to APSEZ, (ii) power undertaking of AEL was transferred to APL, (iii) transmission undertaking of AEL was transferred to ATL Page 113 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 and (iv) AMPL was amalgamated with AEL, by treating the said instrument as covered under Section 5 of the Gujarat Stamp Act, 1958. On account of delay in providing the details, proceedings under Section 33 were initiated for levy of penalty under Section 39(1)(b) and by order dated 25.07.2018, stamp duty of Rs.75 Crores and penalty of Rs.3 Lakh has been demanded. RE : STAMP REFERENCE NO.6 OF 2020 :
97. A scheme of arrangement was sanctioned on 26.09.2014 by this Court whereby the respective transmission divisions of (i) Adani Power Limited (APL);
(ii) Adani Power Maharashtra Limited were to demerge from the said companies and were to stand transfer to Adani Transmission (India) Limited (ATIL). Since there were typographical error in the order passed, speaking to minutes was filed by ATIL which came to allowed on 08.10.2014 and thereafter Company Application No.294 of 2014 came to be filed by ATIL seeking modification of the order dated 26.09.2014 seeking permission to lodge the copy of the order for adjudication for a period of 60 Page 114 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 days from the effective date instead of 60 days from the date of order dated 26.09.2014. Said application came to be allowed on 25.11.2014 and thereby the effect under the sanctioned scheme occurred on 12.01.2015. The Collector intimated the stamp duty payable on the instrument at Rs.27,80,50,000/- on the ground that the instrument is covered under Section 5 of the Gujarat Stamp Act and an order came to be passed on 25.07.2018 demanding stamp duty of Rs.27,80,50,000/- and penalty of Rs.1,00,000/-.
98. Since there are common questions framed in Stamp Reference Nos.4 to 7 of 2020, those questions are required to be answered as tabulated hereinbelow :
Sr. Stamp Question of law Answer
No. Reference
No.
1 4/2020 Whether an order of In S.R.No.5 of 2020,
the High Court the records would
under Section 394 of disclose that by a
the Companies Act, common order dated
2 5/2020 1956, sanctioning a 07.05.2015, the
single composite composite scheme of
scheme of arrangement under
arrangement is not a Section 391 to 394
3 6/2020 single indivisible of the Companies
instrument that is Act, 1956, came to
Page 115 of 190
Downloaded on : Sat Feb 11 20:58:35 IST 2023
C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
not comprising or be sanctioned
relating to several whereunder (i) Port
distinct matters or undertaking of the
distinct transactions applicant was
as contemplated by transferred to Adani
Section 5 of the Port and Special
Stamp Act and not Economic Zone
subject to levy as Limited (APSEZ), (ii)
such, considering power undertaking
the fact that the of applicant was
instrument covered transferred to Adani
under Article 20(d) Power Limited
of the Schedule-I to (APL), (iii)
the Stamp Act would transmission
be the order of the undertaking of the
High Court and not applicant was
the scheme transferred to Adani
sanctioned by such Transmission
order? Limited (ATL) and
(iv) Adani Mining
Private Limited
(AMPL) was
amalgamated with
Adani Enterprises
Limited (AEL). The
revenue has raised
demand for payment
of stamp duty of
Rs.75 Crores.
99. As already noticed hereinabove, similar orders have been passed by the Company Court - National Company Law Tribunal approving the scheme of amalgamation - arrangement even in respect of Stamp Reference Cases 4 of 2020, 6 of 2020 and 7 of 2020.
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C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
100. Mr.Mihir Joshi, learned Senior Counsel appearing for Mr.Sandeep Singhi for M/s.Singhi and Company for the applicant in Stamp Reference Nos.4 to 7 of 2020 has drawn the attention of the Court to the composite scheme of arrangement approved or sanctioned by the Company Court (High Court of Gujarat) under Section 394 of the Companies Act, 1956, to contend that under Article 20(d) of Schedule-I of the Gujarat Stamp Act, the stamp duty payable on the said instrument is subject to a maximum of Rs.25 Crores. He has further contended that undisputedly the scheme which has been sanctioned would fall within the definition of instrument as defined under Section 2(l) of the Stamp Act and the said instrument being conveyance as defined under Section 2(g) of the Stamp Act, the duty payable as indicated in corresponding column of Article 20(d) would be maximum of Rs.25 Crores and the Collector was in error in construing the instrument sanctioned as separate instrument and thereby levied Rs.25 Crores on each of Page 117 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 the company, by ignoring the fact that it is a single composite scheme and the instrument cannot be treated as distinct transaction. He would submit that in the case of S.R.No.5 of 2020, no immovable property in the State of Gujarat has been transferred to Adani Port and Special Economic Zone Limited (APSEZ) and it is only the shares issued by APSEZ to the shareholders of the applicant and both being listed companies, the market value of the shares issued by APSEZ to the shareholders of the applicant and calculated the stamp duty payable thereon on the aggregate value of the shares and capping it to Rs.25 Crores in the same manner under the same composite instrument the transfer of power undertaking of AEL to APL, transmission undertaking of AEL being transferred to ATL and AMPL getting amalgamated with AEL are treated as separate entities and according to Mr.Mihir Joshi, learned Senior Counsel, the Collector committed an error in treating such transaction as separate and distinct transaction and raising the demand of Rs.75 Crores in all in S.R.No.5 of 2020. Page 118 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
101. Mr.Mihir Joshi, learned Senior Counsel would also contend that every order passed by the High Court under Section 394 of the Companies Act would be considered as an instrument in view of Section 2(g)(iv) of the Stamp Act and it is a conveyance and the sanctioned scheme is one and separate and distinct orders have not been passed, such instrument cannot be treated as separate transactions for the purpose of calculation of stamp duty. The applicant accordingly is required to pay one stamp duty to the extent of Rs.25 Crores in view of Article 20(d) of Schedule-I of the Stamp Act.
102. He would submit that mere reconstruction having taken place of the entities which are substantially managed by the same management, though are separate legal entities, but instrument of conveyance cannot be construed as separate and distinct transaction. By referring to the composite scheme of arrangement to contend that business of each legal entity may be separate but when they are handled and managed Page 119 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 substantially by the same person, same arrangement and reconstruction inter-se cannot be segregated by the authority particularly when the single composite order/instrument has been accorded sanction, it is not open for the authority to bifurcate and treat the said transaction as separate and distinct. It has been further stated that this reconstruction inter-se has been undertaken substantially by the very same person with respect to the very same business and with concurrence of major shareholders and when they be so, the view taken by the authority is erroneous and a serious error has been committed in taking aid to Section 5 of the Act. In support of his submission, he has relied upon the following propositions of law :
"(a) In the case of In re South African Supply and Cold Storage Company Wild v. Same Company reported in (1904) 2 Ch
268.
(b) In the case of Saraswati Industrial Syndicate Ltd. v. Commissioner of Income Tax reported in 1990 (Supp) SCC
675. Page 120 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 (c ) In the case of In re Larsen and Toubro Limited reported in (2004) 121 Comp. Case 523.
(d) In the case of Member, Board of Revenue v. Arthur Paul Benthall reported in AIR 1956 SC 35.
(e) In the case of Bowen v. Ashley reported in 127 ER 467.
(f) In the case of Goodson v. Forbes reported in 128 ER 999.
(g) In the case of Allen v. Morrison reported in 108 ER 1036.
(h) In the case of Chief Controlling Revenue Authority v. Coastal Gujarat Power Limited & Ors ., reported in (2015) 10 SCC 700.
(i) In the case of the Commissioner of Income-Tax, Patiala v. M/s. Shahzada Nand & Sons & Ors ., reported in AIR 1966 SC 1342.
(j) In the case of Federation of A.P. Chambers of Commerce & Industry and Others v. State of A.P. and Ors ., reported in (2000) 6 SCC 550.
(k) In the case of District Registrar and Collector, Hyderabad and Anr ., v. Canara Bank & Ors ., reported in (2005) 1 SCC
496."
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103. Mr.Mihir Joshi, learned Senior Counsel appearing for the applicant in this case would contend that the instrument which is sought to be projected as separate transaction and as such stamp duty of Rs.25 Crores on each transaction being demanded is contrary to the statutory provisions namely to Article 20(d) of the Stamp Act. He would submit that Section 394(1)(a) of the Companies Act refers to arrangement for reconstruction and in all these cases, the transaction involved being reconstruction. He would contend that though companies are separate legal entities, but substantially they are one and the same. He would contend that the word used "companies" in Section 2(g)(iv) is plural and one common order is passed in all these cases. He would submit that the statutory definition of the expression 'instrument' as defined under Section 2(l) it is only the order of the Court sanctioning the scheme it becomes an instrument and partakes the character of conveyance as defined under Section 2(g). he would submit that the order of Company Court - NCLT cannot be separated or segregated and said Page 122 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 orders are inseperable and he would contend that Section 394 of the Companies Act would come to his rescue as the words of reconstruction of companies is used in plural. He would submit that it is on account of this reconstruction of companies covering more than one companies under the instrument that is taking place which is also by the same management or in other words, the business are being restructured and there being no separate transaction like loan transaction, sale transaction or any other transaction as was evident in the judgments relied upon by the State, the instrument of the scheme of arrangement or amalgamation cannot be brought under Section 5 of the Gujarat Stamp Act. Hence, he prays for the question of law being answered in favour of the applicant and against the revenue.
104. Whereas Ms.Manisha Lavkumar, learned Government Pleader appearing for the State would support the orders of the revenue. She would contend in terms of Section 2(g)(iv) of the Gujarat Stamp Act, an order has been passed by the High Court under Section Page 123 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 394 of the Companies Act, 1956, or under Section 232 of the Companies Act, 2013/document is considered as conveyance that is chargeable with duty under Article 20(d). She would submit that every order made by the Company Court or NCLT as the case may be in respect of a scheme for reconstruction of the company or companies involving merger or amalgamation of one or more companies is chargeable for stamp duty under Article 20(d) of Schedule-I of the Gujarat Stamp Act. She would submit that in view of the words or expression used in Section 5 of the Act namely "distinct matters" or "distinct transactions", the stamp duty that would be chargeable as if separate instruments are executed for separate set of transactions. She would submit that if the single instrument is giving rise to multiple and distinct transactions, Section 5 will apply. When the instrument comprises of more than one transactions and is used as a tool to give effect to multiple transactions by executing a single instrument, in order to attract the application of Section 5, she would contend that the instrument has to Page 124 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 be looked into or in other words, the entire document needs to be examined and in the instant case, the documents produced by the applicant namely the instrument disclosing that it involves more than one transaction, such transactions are to be treated as distinct transactions and hence, they are liable to be independently charged for stamp duty.
105. Having heard the learned advocates appearing for the parties and on perusal of the records, we are of the considered view that it would be apt and necessary to extract certain provisions of the Gujarat Stamp Act, 1958 and the provisions of the Companies Act, 1956 and also the provisions of the Companies Act, 2013. They are as follows :
The Companies Act, 1956 :
"391. POWER TO COMPROMISE OR MAKE ARRANGEMENTS WITH CREDITORS AND MEMBERS -Page 125 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 (1) Where a compromise or arrangement is proposed - (a) between a company and its creditors or any class of them ; or (b) between a company and its members or any class of them ; the [Tribunal] may, on the application of the company or of any creditor or member of the company, or, in the case of a company which is being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the [Tribunal] directs.
(2) If a majority in number representing three-
fourths in value of the creditors, or class of creditors, or members, or class of members, as the case may be, present and voting either in person or, where proxies are allowed under the rules made under section 643, by proxy, at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the 1 [Tribunal], be binding on all the creditors, all the creditors of the class, all the members, or all the members of the class, as the case may be, and also on the company, or in the case of a company which is being wound up, on the liquidator and contributories of the company :
Provided that no order sanctioning any compromise or arrangement shall be made by the [Tribunal] unless the [Tribunal] is satisfied that the company or any other person by whom an application has been made under subsection Page 126 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 (1) has disclosed to the [Tribunal], by affidavit or otherwise, all material facts relating to the company, such as the latest financial position of the company, the latest auditor's report on the accounts of the company, the pendency of any investigation proceedings in relation to the company under sections 235 to 251, and the like.
(3) An order made by the [Tribunal] under sub-
section (2) shall have no effect until a certified copy of the order has been filed with the Registrar.
(4) A copy of every such order shall be annexed to every copy of the memorandum of the company issued after the certified copy of the order has been filed as aforesaid, or in the case of a company not having a memorandum, to every copy so issued of the instrument constituting or defining the constitution of the company.
(5) If default is made in complying with sub- section (4), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to [one hundred] rupees for each copy in respect of which default is made.
(6) The [Tribunal] may, at any time after an application has been made to it under this section, stay the commencement or continuation of any suit or proceeding against the company on such terms as the [Tribunal] Page 127 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 thinks fit, until the application is finally disposed of.
(7) [***]
392. POWER OF TRIBUNAL TO ENFORCE COMPROMISES AND ARRANGEMENTS.
(1) Where the Tribunal makes an order under section 391 sanctioning a compromise or an arrangement in respect of a company, it - (a) shall have power to supervise the carrying out of the compromise or an arrangement ; and (b) may, at the time of making such order or at any time thereafter, give such directions in regard to any matter or make such modifications in the compromise or arrangement as it may consider necessary for the proper working of the compromise or arrangement.
(2) If the Tribunal aforesaid is satisfied that a compromise or an arrangement sanctioned under section 391 cannot be worked satisfactorily with or without modifications, it may, either on its own motion or on the application of any person interested in the affairs of the company, make an order winding up the company, and such an order shall be deemed to be an order made under section 433 of this Act.
(3) The provisions of this section shall, so far as may be, also apply to a company in respect of which an order has been made before the Page 128 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 commencement the companies (Amendment) Act, 2001 sanctioning a compromise or an arrangement.]
393. INFORMATION AS TO COMPROMISES OR ARRANGEMENTS WITH CREDITORS AND MEMBERS -
(1) Where a meeting of creditors or any class of creditors, or of members or any class of members, is called under section 391, - (a) with every notice calling the meeting which is sent to a creditor or member, there shall be sent also a statement setting forth the terms of the compromise or arrangement and explaining its effect ; and in particular, stating any material interests of the directors, managing director [***] or manager of the company, whether in their capacity as such or as members or creditors of the company or otherwise, and the effect on those interests, of the compromise or arrangement, if, and insofar as, it is different from the effect on the like interests of other persons ; and (b) in every notice calling the meeting which is given by advertisement, there shall be included either such a statement as aforesaid or a notification of the place at which and the manner in which creditors or members entitled to attend the meeting may obtain copies of such a statement as aforesaid. (2) Where the compromise or arrangement affects the rights of debenture holders of the company, the said statement shall give the like information and explanation as respects the Page 129 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 trustees of any deed for securing the issue of the debentures as it is required to give as respects the company's directors.
(3) Where a notice given by advertisement includes a notification that copies of a statement setting forth the terms of the compromise or arrangement proposed and explaining its effect can be obtained by creditors or members entitled to attend the meeting, every creditor or member so entitled shall, on making an application in the manner indicated by the notice, be furnished by the company, free of charge, with a copy of the statement.
(4) Where default is made in complying with any of the requirements of this section, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to [fifty] thousand rupees ; and for the purpose of this sub-section any liquidator of the company and any trustee of a deed for securing the issue of debentures of the company shall be deemed to be an officer of the company : Provided that a person shall not be punishable under this sub-section if he shows that the default was due to the refusal of any other person, being a director, managing director, [***] manager or trustees for debenture holders, to supply the necessary particulars as to his material interests. (5) Every director, managing director, [***] or manager of the company, and every trustee for debenture holders of the company, shall give Page 130 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 notice to the company of such matters relating to himself as may be necessary for the purposes of this section ; and if he fails to do so, he shall be punishable with fine which may extend to [five thousand] rupees.
394. PROVISIONS FOR FACILITATING RECONSTRUCTION AND AMALGAMATION OF COMPANIES (1) Where an application is made to the [Tribunal] under section 391 for the sanctioning of a compromise or arrangement proposed between a company and any such persons as are mentioned in that section, and it is shown to the [Tribunal] - (a) that the compromise or arrangement has been proposed for the purposes of, or in connection with, a scheme for the reconstruction of any company or companies, or the amalgamation of any two or more companies ; and (b) that under the scheme the whole or any part of the undertaking, property or liabilities of any company concerned in the scheme (in this section referred to as a "transferor-company") is to be transferred to another company (in this section referred to as "the transferee- company") ; the 1 [Tribunal] may, either by the order sanctioning the compromise or arrangement or by a subsequent order, make provision for all or any of the following matters : (i) the transfer to the transferee-company of the whole or any part of the undertaking, property or liabilities of any transferor- company ; (ii) the allotment or appropriation by Page 131 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 the transferee-company of any shares, debentures, policies, or other like interests in that company which, under the compromise or arrangement, are to be allotted or appropriated by that company to or for any person ; (iii) the continuation by or against the transferee-company of any legal proceedings pending by or against any transferor-company ;
(iv) the dissolution, without winding up, of any transferor-company ; (v) the provision to be made for any persons who, within such time and in such manner as the [Tribunal] directs, dissent from the compromise or arrangement ; and (vi) such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation shall be fully and effectively carried out :
Provided that no compromise or arrangement proposed for the purposes of, or in connection with, a scheme for the amalgamation of a company, which is being wound up, with any other company or companies, shall be sanctioned by the [Tribunal] unless the [Tribunal] has received a report from [***] the Registrar that the affairs of the company have not been conducted in a manner prejudicial to the interests of its members or to public interest : Provided further that no order for the dissolution of any transferor-company under clause (iv) shall be made by the [Tribunal] unless the Official Liquidator has, on scrutiny of the books and papers of the company, made Page 132 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 a report to the [Tribunal] that the affairs of the company have not been conducted in a manner prejudicial to the interests of its members or to public interest.
(2) Where an order under this section provides for the transfer of any property or liabilities, then, by virtue of the order, that property shall be transferred to and vest in, and those liabilities shall be transferred to and become the liabilities of, the transferee-company ; and in the case of any property, if the order so directs, freed from any charge which is, by virtue of the compromise or arrangement, to cease to have effect.
(3) Within thirty days after the making of an order under this section, every company in relation to which the order is made shall cause a certified copy thereof to be filed with the Registrar for registration. If default is made in complying with this sub-section, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to [five hundred] rupees.
(4) In this section - (a) "property" includes property rights and powers of every description ; and "liabilities" includes duties of every description ; and (b) "transferee-
company" does not include any company other than a company within the meaning of this Act ; but "transferor-company" includes any body corporate, whether a company within the meaning of this Act or not."
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106. A perusal of Section 2(g) would indicate that for Article 20(d) being attracted, the instrument will have to satisfy the definition of the word conveyance. Clause (iv) of Section 2(g) would indicate that every order made by the NCLT under Section 232 of the Companies Act in respect of a scheme for reconstruction of the companies or companies involving merger or amalgamation of any 2 or more companies, it would be a deed of conveyance. A plain reading of Section 5 of the Stamp Act would indicate that if the single instrument is giving rise to multiple and distinct transactions, then on such distinct transactions or distinct matters, the stamp duty would be charged as if separate instruments are executed for separate set of transactions. In other words, the document or instrument will have to be looked into for the said purpose.
107. The Hon'ble Apex Court in the case of Board of Revenue vs. Arthur Paul Benthall, reported in AIR 1956 SC 35 has held that :
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C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 "3. The point for decision in this appeal is as to the meaning to be given to the words "distinct matters" in section 5. The contention of the respondent which found favour with the majority of the learned Judges in the court below is that the word "matters"
in section 5 is synonymous with the word "description" occurring in section 6, and that they both refer to the several categories of instruments which are set out in the Schedule. The argument in support of this con- tention is this: Section 5 lays down that the duty payable when the instrument comprises or relates to distinct matters is the aggregate of what would be payable on separate instruments relating to each of these matters. An instrument would be chargeable under section 3 only if it fell within one of the categories mentioned in the Schedule. Therefore, what is contemplated by section 5 is a combination in one document of different categories of instruments such as sale and mortgage, sale and lease or mortgage and lease and the like, But when the category is one and the same, then section 5 has no application, and as, in the present case, the instrument in question is a power-of- attorney, it would fall under article 48 (a) in whatever capacity it was executed, and there being only one category, there are no distinct matters within section 5.
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4. We are unable to accept the contention that the word "matter" in section 5 was intended to convey the same meaning as the word "description" in section 6. In its popular sense, the expression "distinct matters" would connote something different from distinct "categories". Two transactions might be of the same description, but all the same, they might be distinct. If A sells Black- acre to X and mortgages White-acre to Y, the transactions fall under different categories, and they are also distinct matters. But if A mortgages Black-acre to X and mortgages Whiteacre to Y, the two transactions fall under the same category, but they would certainly be distinct matters. If the intention of the legislature was that the expression 'distinct matters' in section 5 should be understood not in its popular sense but narrowly as meaning different categories in the Schedule, nothing would have been easier than to say so. When two words of different import are used in a statute in two consecutive provisions, it would be difficult to maintain that they are used in the same sense, and the conclusion must follow that the expression "distinct mat- ters" in section 5 and "descriptions" in section 6 have different connotations.
5. It is urged against this conclusion that if the word "matters" in section 5 is construed as meaning anything other than "categories" or in the phraseology of section 6, "descriptions" mentioned in the Schedule, then there could be no conflict between the Page 136 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 two sections, and the clause in section 6 that it is "subject to the provision of the last preceding section" would be meaningless and useless. We see no force in this contention. Though the topics covered by sections 5 and 6 are different, it is not difficult to conceive of instruments which might raise questions falling to be determined under both the sections. Thus, if a partnership carried on by members of a family is wound up and the deed of dissolution effects also a partition of the family properties as in Secretary, Board of Revenue v. Alagappa Chettiar(1), the instrument can be viewed both as a deed of dissolution and a deed of partition, and under section 6, the duty payable will be the higher duty as on an instrument of partition. But supposing by that very deed one of the members creates a charge or mortgage over the properties allotted to his share in favour of another member for moneys borrowed by him for his own purposes, that would be a distinct matter which would attract section 5. Now, but for the saving clause, a contention might be advanced that sections 5 and 6 are mutually exclusive, and as the in- strument falls within section 6, the only duty payable thereon is as on an instrument of partition and no more. The purpose of the clause in section 6 is to repel any such contention.
6. Considerable stress was laid by Mr. Chaudhury on the scheme of the Act as embodied in sections 3 to 6 as strongly Page 137 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 supporting the view that 'matters' in section 5 meant the same thing as 'description' in section 6. He argued that under section 3 the duty was laid not on all instruments but on those which were of the descriptions mentioned in the Schedule, that section 4 enacted a special provision with reference to three of the categories mentioned in the Schedule, sale (conveyance), mortgage and settlement, that if they were completed in more than one instrument, not all of them were liable for the duty specified in the Schedule, but only one of them called the principal document, and that section 6 provided that when the instrument fell under two or more of the categories in the Schedule, the duty payable was the highest payable on any one of them, that thus the categories in the schedule were the pivot on which the entire scheme revolved, and that in construing the section in the light of that scheme, the expression "distinct matter"
must in the setting be construed as distinct categories. To construe "distinct matters" as something different from "distinct categories"
would be, it was argued, to introduce a concept foreign to the scheme of the enactment.
7. The error in this argument lies in thinking that the object and scope of sections 4 to 6 are the same, which in fact they are not. Section 4 deals with a single transaction completed in several instruments, and section 6 with a single transaction which might be viewed as falling under more than one Page 138 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 category, whereas section 5 applies only when the instrument comprises more than one transaction, and it is immaterial for this purpose whether those transactions are of the same category or of different categories. The topics dealt with in the three sections being thus different, no useful purpose will be served by referring to section 4 or section 6 for determining the scope of section 5 or for construing its terms. It is not without significance that the legislature has used three different words in relation to the three sections, 'transaction' in section 4, matter' in section 5, and 'description' in section 6.
12. There is no provision in the statute law of this country similar to the above, and it is significant that it assumes that a power of attorney might consist of distinct matters by reason of the fact that there are several donors or donees mentioned in it, or that it relates to more than one matter."
108. The Hon'ble Apex Court in the case of Government of Uttar Pradesh vs. Raja Mohammad Amir Ahmed Khan, reported in AIR 1961 SC 787 has held that :
"(5) XXXX The language in regard to executed and unstamped documents is no different and the powers and duties of the Collector in regard to those instruments are the same, that is, when he is asked to give his opinion, he has to determine the duty with Page 139 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 which, in his judgment, the instrument is chargeable and there his duties and powers in regard to that matter end. Then follows s.
32. Under that section the Collector has to certify by endorsement on the instrument brought to him under s. 31 that full duty has been paid, if the instrument is duly stamped, or it is unstamped and the duty is made up, or it is not chargeable to duty. Under that section the endorsement can be made only if the instrument is presented within a month of its execution. But what happens when the instrument has been executed more than a month before its being brought before the Collector? Section 31 places no limitation in regard to the time and there is no reason why any time limit should be imposed in regard to seeking of opinion as to the duty payable. (6) Chapter IV of the Act which deals with instruments not duly stamped and which contains as. 33 to 48, provides for impounding of documents, how the impounded documents are to be dealt with, Collector's powers to stamp instruments impounded and how the duties and penalties are to be recovered. It would be an extraordinary position if a person seeking the advice of the Collector and not wanting to rely upon an instrument as evidence of any fact to be proved nor wanting to do any further act in regard to the instrument so as to effectuate its operation should also be liable to the penalties which unstamped instruments used as above might involve. The scheme of the Act shows that where a person is simply seeking the opinion of the Collector as to the proper duty in regard to an instrument, he approaches him under s. 31. If Page 140 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 it is properly stamped and the person executing the document wants to proceed with effectuating the document or using it for the purposes of evidence, he is to make up the duty and under s. 32 the Collector will then make an endorsement and the instrument will be treated as if it was duly stamped from the very beginning. But if he does not want to proceed any further than seeking the determination of the duty payable then no consequence will follow and an executed document is in the same position as an instrument which is unexecuted and unstamped and after the determination of the duty the Collector becomes functus officio and the provisions of s. 33 have no application. The provisions of that section are a subsequent stage when something more than mere asking of the opinion of the Collector is to be done."
109. The Hon'ble Apex Court in the case of Chief Controlling Revenue Authority vs. Coastal Gujarat Power Limited and others, reported in (2015) 10 SCC 700, has held as under :
"28. From the facts discussed and narrated hereinabove, it is manifest that the instrument of mortgage came into existence only after separate loan agreements were executed by the borrower with the lenders with regard to separate loan advanced by those lenders to the respondent borrower.Page 141 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 The mortgage deed which recites at length as to how and under what circumstances property was mortgaged with the security trustee for and on behalf of lender bank.
29. When several matters are contained in one instrument, what stamp is payable thereon in England has been dealt with and Halsbury's Law of England 4th Edition volume 44 paragraph 613 at page 399 is quoted herein below:-
"613. Instrument relating to several matters. Except where there is statutory provision to the contrary, an instrument containing or relating to several distinct matters is to be separately charged, as if it were a separate instrument, with stamp duty in respect of each of the matters, and an instrument made for any consideration in respect of which it is chargeable with ad valorem duty, and also for any further or other valuable consideration, is separately chargeable, as if it were a separate instrument, in respect of each of the consideration."
30. Coming to the provisions contained in the Stamp Act, we have to see as to whether the provision of Section 5 is ancillary to Section 4 or a separate and distinct provision. For better appreciation Sections 4, 5 and 6 of the Gujarat Stamp Act is reproduced herein below:-
Page 142 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 "Section 4- Several instruments used in single transaction of sale, mortgage or settlement.
(1) Where, in the case of any sale, mortgage or settlement, several instruments are employed for completing the transaction, the principle instrument only shall be chargeable with the duty prescribed in Schedule I for the conveyance, mortgage or settlement, and each of the other instruments shall be chargeable with a duty of 1 [one hundred rupees] instead of the duty (if any) prescribed for it in that Schedule.
(2) The parties may determine for themselves which of the instruments so employed shall, for the purposes of sub-section (1), be deemed to be the principal instrument.
Provided that the duty chargeable on the instrument so determined shall be the highest duty which would be chargeable in respect of any of the said instruments employed. Section 5 - Instrument relating to several distinct matters or distinct transactions. Any instrument comprising or relating to several distinct matters shall be chargeable with the aggregate amount of the duties with which separate instrument, each comprising or relating to one of such matters or distinct transactions, would be chargeable under this Act.
6. Instruments coming within several descriptions in Schedule I.-Subject to the Page 143 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 provisions of the last preceding section, an instrument so framed as to come within two or more of the descriptions in Schedule I, shall, where the duties chargeable thereunder are different, be chargeable only with the highest of such duties:
Provided that nothing in this Act contained shall render chargeable with duty exceeding one rupee a counterpart or duplicate of any instrument chargeable with duty and in respect of which the proper duty has-been paid."
From bare reading of these provisions, it is clear that Section 4 deals with single transaction completed in several instruments, whereas Section 5 deals only with the instrument which comprises more than one transaction and it is immaterial for the purpose whether those transactions are of the same category or of different categories.
31. It appears from the trustee document that altogether 13 banks lent money to the mortgagor, details of which have been described in the schedule and for the repayment of money, the borrower entered into separate loan agreements with 13 financial institutions. Had this borrower entered into a separate mortgage deed with these financial institutions in order to secure the loan there would have been a separate document for distinct transactions. On proper construction of this indenture of mortgage it can safely be regarded as 13 distinct Page 144 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 transactions which falls under Section 5 of the Act.
32. Both the learned counsel put reliance on the five Judges Constitution Bench Judgment of this Court in the Case of The Member, Board of Revenue vs. Arthur Paul Benthall (supra). The said case originated from a reference made to the High Court of Calcutta by the Revenue Authorities seeking opinion with regard to the stamp duty payable in the instrument. The respondent in that case was at the material time the Managing Director of M/s. Bird and Co. Ltd.
and Messrs F.W. Heilgers and Com. Ltd which were acting Managing Agents of several Companies Act under the Indian Companies Act. The respondents were also Director of a number of other Companies, and had on occasions acted as liquidator of some Companies, as executor or administrator of estates of deceased persons and as trustee of various estates. He proposed to execute power of attorney empowering the M/s. Douglas Chisholm Fairbairn and John James Brims Southerland jointly and severally to act for him in his individual capacity and also as executor administrator, trustee, Managing Agents, liquidator, and all other capacities.
The Collector referred the matter under Section 56(2) of the Act to the decision of Chief Controller, Revenue Authority, who eventually referred it to the High Court of Calcutta stating his own opinion that stamp duty was payable on the power "for as many respective capacities as the principal Page 145 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 executes the power". The majority view of the Bench held that the different capacities of the executants would not constitute the distinct matter for the purpose of Section 5 of the Act and that the proper duty and instrument was payable under Article 48(d) of Schedule 1(a) of the Stamp Act.
33. Answering the Reference, the Constitution Bench of this Court elaborately discussed the scope and object of Sections 4,5, and 6 of the Stamp Act and finally allowed the appeal. Their Lordship held (Benthall case, AIR p.38, para 4):-
"4. We are unable to accept the contention that the word "matter" in section 5 was intended to convey the same meaning as the word "description" in section 6. In its popular sense, the expression "distinct matters"
would connote something different from distinct "categories". Two transactions might be of same description, but all the same, they might be distinct.
If A sells Black-acre to X and mortgages White-acre to Y, the transactions fall under different categories, and they are also distinct matters. But if A mortgages Black-acre to X and White-acre to Y, the two transactions fall under the same category, but they would certainly be distinct matters.
If the intention of the legislature was that the expression 'distinct matter' in section5 should be understood not in its popular sense but Page 146 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 narrowly as meaning different categories in the Schedule, nothing would have been easier than to say so. When two words of different import are used in a statute in two consecutive provisions, it would be difficult to maintain that they are used in the same sense, and the conclusion must follow that the expression "distinct matters" in section 5 and "description" in section 6 have different connotations."
34. Their Lordships further held that:
(Benthall case, AIR p.41, para 13) "13.... When a person possesses both a personal capacity and a representative capacity, such as trustee, and there is a delegation of power by him in both those capacities, the position in law is exactly the same as if different persons join in executing a power in respect of matters which are unrelated.
There being no community of interest between the personal estate belonging to the executant and the trust estate vested in him, they must be held to be distinct matters for purposes of section 5. The position is the same when a person is executor or administrator, because in that capacity he represents the estate of the deceased, whose persona is deemed to continue in him for purposes of administration."
35. We have also gone through the provisions contained in Sections 33, 39, Article Page 147 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 6 and 6(b) of the Act as also Bombay Stamp (Gujarat Second Amendment) Rules, 2007 and the Circular dated 2.4.2007. After giving out anxious consideration to those provisions and also in the light of the ratio decided by the Constitution Bench of this Court in The Benthall case (supra), we are of the definite opinion that the High Court has committed serious error of law in interpreting the provisions of Sections 5 and 6 of the Act. Consequently, the answer given by the High Court on the Reference cannot be sustained in Law."
110. The thrust of arguments canvassed by learned Government Pleader is that by executing a single instrument, Legislature is prescribed that on the distinct transaction or distinct transaction, the stamp duty shall be charged as separate instruments which executed for separate set of transaction. In other words, a single instrument which is giving rise to multiple and distinct transaction, Section 5 of the Stamp Act would be attracted as the instrument discloses that it comprises of more than one transaction and is used as a tool to give effect to multiple transaction by executing a single transaction. We have already noticed the judgment of the Page 148 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Hon'ble Apex Court in the case of Arthur Paul Benthall (supra), which has also been relied upon by relying upon paragraph 13 in the very same judgment. The Hon'ble Apex Court has explained the expression "distinct matters" would connote something different from distinct "categories". It has been further observed :
"4. We are unable to accept the contention that the word "matter" in section 5 was intended to convey the same meaning as the word "description"
in section 6. In its popular sense, the expression "distinct matters" would connote something different from distinct "categories". Two transactions might be of the same description, but all the same, they might be distinct. If A sells Black-acre to X and mortgages White- acre to Y, the transactions fall under different categories, and they are also distinct matters. But if A mortgages Black-acre to X and mortgages Whiteacre to Y, the two transactions fall under the same category, but they would certainly be distinct matters.
If the intention of the legislature was that the expression 'distinct matters' in section 5 should be understood not in its popular sense but narrowly as meaning different categories in the Schedule, nothing would have been easier than to say so. When two words of different import are used in a statute in two consecutive provisions, it would be difficult to maintain that they are used in the same sense, and the conclusion must follow that the expression "distinct mat- ters" in section 5 and "descriptions" in section 6 have different connotations.
7. The error in this argument lies in thinking that Page 149 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 the object and scope of sections 4 to 6 are the same, which in fact they are not. Section 4 deals with a single transaction completed in several instruments, and section 6 with a single transaction which might be viewed as falling under more than one category, whereas section 5 applies only when the instrument comprises more than one transaction, and it is immaterial for this purpose whether those transactions are of the same category or of different categories.
The topics dealt with in the three sections being thus different, no useful purpose will be served by referring to section 4 or section 6 for determining the scope of section 5 or for construing its terms. It is not without significance that the legislature has used three different words in relation to the three sections, 'transaction' in section 4, matter' in section 5, and 'description' in section 6.
8. In support of his contention that 'distinct matters' in section 5 meant only different categories, learned counsel for the respondent relied on certain observations in Ansell v. Inland Revenue Commissioners(1). There, the instrument under consideration was a deed of settlement which comprised certain Government securities as also other investments, and under the Stamp Act, 1891, it was chargeable with a single duty ad valorem on the value of all the properties settled.
By section 74, sub-section (1) of the Finance Act, 1910, voluntary dispositions were chargeable with a higher stamp duty as on a conveyance; but Government securities were, exempted from the operation of the section.
The question that arose for decision was whether a separate duty was payable in respect of Government stocks under the provisions of the Stamp Act, 1891 over and above what was paid under section 74, sub-section (1) of the Finance Act, 1910 on account of other investments. Answering it in the affirmative, Rowlatt, J. observed:
"If two different classes of property are being transferred by the same words of assignment in the Page 150 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 same document, and those two different classes of property in the same document are different from the point of view of the Stamp Act and taxation, it seems to me in common sense that they must be distinct matters".
The respondent wants to read these observations as meaning that where the matters are not dealt with separately for purposes of stamp duty, then they are not distinct matters. This, however, does not follow. The case before the court was one in which the instrument dealt with properties which fell under' two categories, and the decision was that they were distinct matters.
There is nothing either in the deci- sion or the observations quoted above to support the contention of the respondent that if the instrument comprises matters falling within the same description, it is not to be construed as comprising distinct matters. Reliance was also placed on the observations in Reversionary Interest Society v. Commissioners of Inland Revenue(1), in which it was held that a statutory declaration for the purpose of carrying through a transaction was liable for a single stamp duty.
There, the declaration was made by husband and wife, and in view of the purpose for which it had to be used, it was construed as one declaration. This is a decision on the facts, and is not of much assistance.
10. We are unable to agree with the respondent 'that when a person executes a power-of-attorney in respect of all the matters in which he could act, it should be held, as a matter of law and without regard to the contents of the instrument, to comprise a single matter. Whether it relates to a single matter or to distinct matters will, in our opinion, depend on a number of factors such as who are parties thereto, which is the subject-matter on which it operates and so forth.
Thus, if A executes one power authorising X to Page 151 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 manage one estate and Y to manage another estate, there would really be two distinct matters, though there is only one instrument executed by one person. But if both X and Y are constituted attorneys to act jointly and severally in respect of both the estates, then there is only one delegation and one matter, and that is specifically provided for in article 48(d).
Conversely, if a number of persons join in executing one instrument, and there is community of interest between them in the subject-matter comprised therein, it will be chargeable with a single duty. This was held in Davis v. Williams, (1811) 104 ER 358(D); - Bowen v. Ashley, (1825) 127 ER 467 at p. 469(E); - Good-son v. Forbes (1815) 128 ER 999 at pp. 1000-1001 (F); and other cases. But if the interests of the executants are separate, the instrument must be construed as comprising distinct matters.
Vide Freeman v. Commissioners of Inland Revenue, (1870-71) 6 Ex. 101(G). Applying the same principle to powers-of-attorney, it was held in Allen v. Morrison (1828) 108 ER 1152 at p. 1153(H), that when members of a mutual insurance club executed Single power, it related to one matter , Lord Tenterdon, C. J. observing that "there was certainly a community of purpose actuating all the members of this club".
In Reference under Stamp Act, s. 46(1), a power-of attorney executed by thirty-six persons in relation to a fund in which they were jointly interested was held to comprise a single matter. A similar decision was given in Reference under Stamp Act, s. 46(2) where a power-of-attorney was executed by ten mirasdars empowering the collection of communal income appurtenant to their mirasi rights.
On the other hand, where several donors having separate interests execute a single power-of- attorney with reference to their respective properties as, for example, when A constitutes X as attorney for management of his estate Black-acre and B constitutes the same person as attorney for Page 152 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 the management of his estate White-acre, then the instrument must be held to comprise distinct matters.
It was so decided in Reference under Stamp Act, 8. 46(3). Thus, the question whether a power-of attorney relates to distinct matters is one that will have to be decided on a consideration of the terms of the instrument and the nature and the extent of the authority conferred thereby."
111. As noticed by the Hon'ble Apex Court therein, it has been clearly held vide paragraph No. 10 that if a number or persons joined in executing one instrument, and there is community of interest between them in the subject matter comprised therein, it will be chargeable with a single duty. Halsbury's Laws of England, Volume 44(I), Fourth Edition Reissue has defined instrument relating to several matters as under : -
"1015. Instrument relating to several matters. Except where there is statutory provision to the contrary, an instrument containing or relating to several distinct matters is to be separately charged, as if it were a separate instrument, with stamp duty in respect of each of the matters, and in instrument made for any consideration in respect of which it is chargeable with ad valorem duty, and also for any further or other valuable consideration or considerations, is separately chargeable, as if it were a separate instrument, in respect of each of the considerations.
It seems that 'distinct matters' means for this purpose matters which either fall under Page 153 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 separate heads of charge or are separate transactions. Thus a statutory declaration, sworn as to one part by one person and as to another part by another, attracted only one stamp as one declaration prior to the abolition of duty under this head. On the other hand, a single conveyance of separate items of property, of which some attract conveyance duty and some do not, relates to distinct matters. Again, if two persons in fact sell property to each other, a mutual conveyance described as an exchange attracts the same aggregate duty as two separate conveyance described as an exchange attracts the same aggregate duty as two separate conveyances as sale. However, there is authority for the principle that an instrument stamped for its leading and principal object covers everything accessory to that object.
The line between one matter and several is not easy to draw. It has, however, been regarded as well established that, where a provision in an instrument is such that, even if it had not expressed, it would have been implied by law, such a provision is not a distinct matter and no duty is chargeable in respect of it. The fact that several persons join in an instrument does not by itself make their shares in the transaction separate and distinct matters, provided that there is a community of the same subject matter, either as to property or interest, in all the parties, although, in the absence of the necessary community of interest, more than one stamp may be required. Various instruments which, in respect of their leading characteristic, were either not liable to duty, or if liable were properly stamped, have been held not to be chargeable with any further duty by reason of the inclusion of provisions Page 154 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 considered to be merely ancillary to the leading object; whereas stamp duty has been attracted where a provision has been held not to be merely ancillary to another main provision but separate and distinct."
112. In the instant case, under composite scheme of amalgamation / reconstruction, no immovable property is being conveyed or transferred, it is only the shares which is being transferred. Infact the business of each of the legal entities are being handed and managed substantially under the same management by same persons and such reconstruction inter se cannot be segregated, particularly, when the said arrangement and/ or reconstruction was pursuant to single composite order / instruments. Infact the sanction of the scheme of amalgamation / reconstruction was by single order only. As such treating the said transaction as distinct transaction and thereby demand separate stamp duty appears to be in conflict with the true import and meaning of Section 5 of the Stamp Act. A conjoint reading of the principals enunciated in the afore- Page 155 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 mentioned cases by the Hon'ble Apex Court, we are of the opinion that neither the scheme of amalgamation or reconstruction sanction by Company Court in exercise of the powers vested under section 394 of the Companies Act, 1956 or Section 232 (2013 Act) can be brought within the sweep of Section 5. if such interpretation were to be accepted, it would run counter to the literal meaning of fiscal statute and as such reference will have to be answered against the Revenue and in favour of the Subject.
113. The next issue which arises for our consideration is whether in a proceedings initiated under section 31 of the Act, Collector has any jurisdiction to impound to any instrument by invoking the provision of Section 33. In order to adjudicate the said issue, we are of the considered view that it would be apt and appropriate to extract the relevant two provisions namely Section 31 and 33 of the Gujarat Stamp Act and it reads as under : -
"31. Adjudication as to proper stamp. - (1) Page 156 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 When any instrument, whether executed or not and whether previously stamped or not, is brought to the Collector, and the person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is chargeable, and pays a fee of such amount [not exceeding one hundred rupees and not less than twenty-five rupees] as the Collector may, in each case direct, the Collector shall determine the duty (if any) with which in his judgement, the instrument is chargeable.
(2) For this purpose the Collector may require to be furnished with an abstract of the instrument, and also with such affidavit or other evidence as he may deem necessary to prove all the facts and circumstances affecting the chargeability of the instrument with duty, or the amount of the duty with which it is chargeable, are fully and truly set forth therein, and may refuse to proceed upon any such application until such abstract and evidence have been furnished accordingly:
Provided that-
(a) no evidence furnished in pursuance of this section shall be used against any person in any civil proceeding, except in an inquiry as to the duty with which the instrument to which it relates is chargeable; and
(b) every person by whom any such evidence is furnished shall, on payment of the full duty with which the instrument to which it relates is chargeable, be relived from any penalty which he may have incurred under this Act by reason of the omission to state truly in such instrument any of the facts or circumstances aforesaid.
(3) Where an officer appointed as a Collector under clause (f) of section 2 has reason to believe that the market value of the property, which is the subject matter of the instrument, received by him for adjudication, has not been truly set forth therein, he shall, before assessing the stamp duty under this section, refer the instrument to the Collector of such district in which either the Page 157 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 whole or any part of the property is situate, for determining, in accordance with the procedure laid down in section 32A, the true market value of such property and the proper duty payable on the instrument.]
33. Examination and impounding of instruments. - (1) [Subject to the provision of section 32A, every person] having by law or consent of parties authority to receive evidence, and every person in charge of a public office except an officer of police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions shall if it appears to him that such instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him in order to ascertain whether it is stamped with a stamp of the value and description required by the law for the time being in force in the State when such instrument was executed or first executed:
Provided that-
(a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898 (V of 1898);
(b) in the case of a Judge of High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court may appoint in this behalf."
114. Section 33 empowers every person having by law or consent of parties, authority to receive evidence, and Page 158 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 every person in charge of a public office except an officer of police, before whom any instrument, chargeable and in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duty stamped, impound the same.
115. However, Section 31 would indicate the mode of adjudication as to proper stamp. Section 31 nowhere speaks of the authority of the Collector to impound documents. The said issue is no more res integra, the provisions of the Stamp Act, 1899, as prevalent in the State of Uttar Pradesh for the subject matter of the examination by the Hon'ble Apex Court in the case of Government of Uttar Pradesh and others versus Raja Mohammad Amir Ahmad Khan reported in AIR 1961 SC 787 and it has been held that the Collector has no power to impound the document. It has been further held :
"5. After an inordinately long delay, the Page 159 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Collector determined the amount of duty payable and impounded the document. Power to impound is given in s. 33 of the Act. Under that section any Person who is a Judge or is in- charge of a public office before whom an instrument chargeable with duty is produced or comes in the performance of his functions is required to impound the instrument if it appears to him not to be duly stamped. The question is does this power of impounding arise in the present case?. The instrument in dispute was not produced as a piece of evidence nor for its being acted upon e.g. registration, nor for endorsement as under s. 32 of the Stamp Act but was merely brought before the Collector for seeking his advise as to what the proper duty would be. The words "every person............ before whom any instrument............ is produced or comes in the performance of his functions" refer firstly to production before judicial or other officers performing judicial functions as evidence of any fact to be proved and secondly refer to other officers who have to perform any function in regard to those instruments when they come before them e.g. registration. They do not extend to the determination of the question as to what the duty payable is. They do not cover the acts which fall within the scope of s. 31, because that section is complete by itself and it ends by saying that the Collector shall determine the duty with which, in his judgment, the instrument is chargeable, if it is chargeable at all. Section 31 does not postulate anything further to be done by the Collector. It was conceded that if the instrument is unexecuted i.e. not signed, and the opinion of the Collector is sought, he has to give his opinion and return it with his opinion to the person seeking his opinion. The language in regard to exe- cuted and unstamped documents is no different and the powers and duties of the Collector in regard to those instruments are the same, that is, when he is asked to give his opinion, he has to determine the duty with which, in his judgment, the instrument is chargeable and there his duties and powers in regard to that matter end.Page 160 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Then follows s. 32. Under that section the Collector has to certify by endorsement on the instrument brought to him under s. 31 that full duty has been paid, if the instrument is duly stamped, or it is unstamped and the duty is made up, or it is not chargeable to duty. Under that section the endorsement can be made only if the instrument is presented within a month of its execution. But what happens when the instrument has been executed more than a month before its being brought before the Collector? Section 31 places no limitation in regard to the time and there is no reason why any time limit should be imposed in regard to seeking of opinion as to the duty payable.
6. Chapter IV of the Act which deals with instruments not duly stamped and which contains as. 33 to 48, provides for impounding of documents, how the impounded documents are to be dealt with, Collector's powers to stamp instruments impounded and how the duties and penalties are to be recovered. It would be an extraordinary position if a person seeking the advice of the Collector and not wanting to rely upon an instrument as evidence of any fact to be proved nor wanting to do any further act in regard to the instrument so as to effectuate its operation should also be liable to the penalties which unstamped instruments used as above might involve. The scheme of the Act shows that where a person is simply seeking the opinion of the Collector as to the proper duty in regard to an instrument, he approaches him under s. 31. If it is properly stamped and the person executing the document wants to proceed with effectuating the document or using it for the purposes of evidence, he is to make up the duty and under s. 32 the Collector will then make an endorsement and the instrument will be treated as if it was duly stamped from the very beginning. But if he does not want to proceed any further than seeking the determination of the duty payable then no consequence will follow and an executed document is in the same Page 161 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 position as an instrument which is unexecuted and unstamped and after the determination of the duty the Collector becomes functus officio and the provisions of s. 33 have no application. The provisions of that section are a subsequent stage when something more than mere asking of the opinion of the Collector is to be done."
116. In light of the above authoritative pronouncements, the issue or question will have to be necessarily held against the Revenue.
117. In Stamp Reference No. 7 of 2020, question No. 4 and 6 referred to (supra) has been referred for being adjudicated. In the instant case, the National Company Law Tribunal, Principal Bench, New Delhi passed an order dated 24.11.2017, sanctioned scheme of arrangement amongst :
(i) Inter Globe Enterprises Ltd. - transferor Company
(ii) Inter Globe Real Estate Venture Private Ltd.
relating to subsidiary No. 1 - applicant
(iii) Inter Globe Business Solution Private Page 162 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Limited - relating to subsidiary No. 2
(iv) Acquired Services Private Ltd. - transferee Company.
118. On such scheme being sanctioned, it resulted in following :
(A) Real Estate Undertaking of transferor company stood de-merged into applicant's company (B) I.T. Supports Company undertaking of transferor Company stood de-merged into resulting company.
(C) the Residual transferor company was amalgamated with the transferee company.
119. The immovable properties of transferor company situated in Gujarat stood transferor to the applicant pursuant to the sanction of the scheme, applicant was made before the Deputy Inspector General - I, Jaipur Page 163 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 seeking adjudication of the said instrument which came to be adjudicated and call upon the petitioner to pay Rs. 25 crores towards the stamp duty and Rs. 5 crores towards surcharge. The certificate issued by the Collector (Stamp), Jaipur, Rajasthan dated 05.02.2018 (Annexure D), would evidence the fact of State of Rajasthan having received demand of Rs. 30 crores towards said instrument and undisputedly the transaction of the scheme of arrangement was treated as a single transaction. However, notice dated 09.10.2018 - Annexure F came to be issued by the Collector, Gujarat demanding duty of Rs. 30,18,38,002/- and after affording personal hearing, final opinion was served on the applicant on 18.10.2019.
120. In view of our finding on the issue of such transaction not being covered under section 5 of the stamp duty under the Gujarat Stamp Act as prescribed under Article 20(d) cannot exceed Rs. 25 crores and the instruments in question having already suffered stamp Page 164 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 duty of Rs. 30 crores in the State of Rajasthan, no further stamp duty was payable in the State of Gujarat in light of the section 19 of the Stamp Act, and it reads thus :
"19. Payment of duty on certain instruments liable to increased duty in [Gujarat State]. - Where any instrument of the nature described in any article in Schedule I and relating to any property situate or to any matter or thing done or to be done in this State is executed out of the State and subsequently received in the State,-
(a) the amount of duty chargeable on such instrument shall be the amount of duty chargeable under Schedule I on a document of the like description executed in this State less the amount of duty, if any, already paid under any law in force in India excluding the State of Jammu and Kashmir on such instrument when it was executed;
(b) and in addition to the stamps, if any, already affixed thereto such instrument shall be stamped with the stamps necessary for the payment of the duty chargeable on it under clause (a) of this section, in the same manner and at the same time and by the same persons as though such instrument were an instrument received in this State for the first time at the time when it became chargeable with the higher duty; and
(c) the provisions contained in clause (b) of the proviso to sub-section (3) of section 32 shall apply to such instrument as if such were an instrument executed or first executed out of this State and first received in this State when it became chargeable to the higher duty aforesaid, but the provisions contained in clause (a) of the said proviso shall not apply thereto"Page 165 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023
C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
121. Only in the event of stamp duty being higher in the State of Gujarat and in the event of stamp duty having been paid in other state being lessor then the duty prescribed by the State of Gujarat, difference in duty would be required to be paid.
122. In the instant case, the Chief Controlling Revenue Authority as well as Collector empowered in holding that surcharge levied on the instrument under section 3(a) and 3(b) of the Rajasthan Stamp Act are not ""amount of duty" as contemplated under section 19 of the Act. Infact the total stamp duty chargeable on the instrument was Rs. 30,18,38,002/- and Rs. 5,18,38,002/- surcharge. In any case, the stamp duty that has been paid is on the same instrument in the State of Rajasthan being Rs. 25 crores, the same ought to have been given set off as per Section 19 of the Stamp Act at the time of computation of the stamp duty chargeable in the State of Gujarat on the said instrument, as such the question is answered against Page 166 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 the Revenue.
123. The demand of stamp duty on the instrument to the extent that said demand has been raised by considering the transmission line of Adani Power Limited as immovable property has been referred as question No.1 in S.R.No.6 of 2020. Brief facts are that High Court of Gujarat sanctioned a scheme on 26.09.2014 whereby the respective transmission divisions of (i) Adani Power Limited (APL) and (ii) Adani Power Maharashtra Limited (APML) were to demerge from the said companies and such demerged divisions were to stand transferred to Adani Transmission (India) Limited (ATIL). ATIL filed an application under Section 31 of the Gujarat Stamp Act before the Collector and on seeking certain particulars which was produced by ATIL and after several months indicated the stamp duty payable at Rs.27,80,50,000/- on the ground that said transaction was covered under Section 5 of the Stamp Act; Rs.25 Crores duty on transfer of shares though computation determined on 28.16 Page 167 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Crores and in view of cap prescribed under Article 20(d) and (c) the transmission division of APML does not have any immovable property in the State has issued one crore shares of Rs.10/- to shareholders of APML and thereby the stamp duty of Rs.2,80,50,000/- was payable. It was the plea of the ATIL that the plant and machinery of APL is not a factory and cannot be considered as immovable property.
124. Section 2(ja) of the Stamp Act defines immovable property as under :
"2(ja) "immovable property" includes land benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth;] Explanation - Where any plant and machinery of a factory transferred or sold with the intention of running the said factory, such transaction shall be deemed to be a transaction of the immovable property."
125. A plain reading of the above provision would indicate that it would include land, benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to earth. The explanation Page 168 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 thereto would indicate that any plant and machinery of a factory the transferred or sold with the intention of running the said factory, such transaction is deemed to be a transaction of immovable property. It has been the stand of the revenue that Section 2(ja) stipulates and considers inter alia things permanently fastened to anything attached to earth as an 'immovable property' and it also explains 'plant and machinery' of a factory to be an immovable property. In the instant case the records would disclose that the applicant in the communication dated 10.07.2015 addressed to the Collector and Superintendent of Stamps as well as the Additional Superintendent of Stamps has furnished the details of immovable property of the transfer undertaking - I of Adani Power Limited situated in the State of Gujarat whereunder the plant and machinery as well as transmission line, inter alia, consisting of conductors and towers has been furnished. Based on the same, Collector passed an order on 25.07.2008 demanding the stamp duty of Rs.27,80,50,000/- by quantifying the price of plant Page 169 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 and machinery, price of land and building and price of capital work in progress as under :
Price of Land Building Rs.7,62,06,00,000.00 Price of Plant and Machinery Rs.19,07,69,00,000.00 Price of Capital Work in Rs.1,46,40,00,000.00 Progress Total Rs.28,16,15,00,000.00
126. Challenging the said order, an application was filed before the Chief Controlling Revenue Authority by the applicant under Section 53 of the Stamp Act who by order dated 30.12.2019 accepted the order of the Collector by opining that applicant has not produced any details with regard to the amount of capital work in progress and furnishing the bifurcation of the amount. Section 2(ja) definition 'immovable property' is clearly and unambiguous. It not only take within its sweep the land, the benefits arising out of land and things attached to earth or permanently fastened to anything attached to earth, but also any plant and machinery of a factory transferred or sold and by deeming fiction to be Page 170 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 transaction of an immovable property. The Hon'ble Apex Court in the case of Commissioner of Central Excise, Ahmedabad vs. Solid and Correct Engineering Works and others reported in (2010) 5 SCC 122 has held that mere attachment to earth does not qualify a plant to be treated as immovable property. It has been further held that machinery attached by bolts to special concrete basis that could not be easily removed, held not part of structure or soil beneath it. It is further held :
21. The expression "moveable property" has been defined in Section 3(36) of the General Clauses Act, 1897 as under:
"Section 3(36) : "movable property" shall mean property of every description, except immovable property."
From the above it is manifest that the answer to the question whether the plants in question are movable property, would depend upon whether the same are immovable property. That is because anything that is not immovable property is by this very definition extracted above "moveable" in nature.
24. Section 3(26) of the General Clauses Act includes within the definition of the term "immovable property" things attached to the earth or permanently fastened to anything attached to the earth. The term "attached to the earth" has not been defined in the General Clauses Act, 1897. Section 3 of the Transfer of Property Act, however, gives the Page 171 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 following meaning to the expression "attached to the earth":
"(a) rooted in the earth, as in the case of trees and shrubs;
(b) imbedded in the earth, as in the case of walls and buildings;
(c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached."
25. It is evident from the above that the expression "attached to the earth" has three distinct dimensions, viz.
(a) rooted in the earth as in the case of trees and shrubs (b) imbedded in the earth as in the case of walls or buildings or
(c) attached to what is imbedded for the permanent beneficial enjoyment of that to which it is attached. Attachment of the plant in question with the help of nuts and bolts to a foundation not more than 1= feet deep intended to provide stability to the working of the plant and prevent vibration/wobble free operation does not qualify for being described as attached to the earth under any one of the three clauses extracted above. That is because attachment of the plant to the foundation is not comparable or synonymous to trees and shrubs rooted in earth. It is also not synonymous to imbedding in earth of the plant as in the case of walls and buildings, for the obvious reason that a building imbedded in the earth is permanent and cannot be detached without demolition. Imbedding of a wall in the earth is also in no way comparable to attachment of a plant to a foundation meant only to provide stability to the plant especially because the attachment is not permanent and what is attached can be easily detached from the foundation. So also the attachment of the plant to the foundation at which it rests does not fall in the third category, for an attachment to fall in that category it must be for permanent beneficial enjoyment of that to which the plant is attached.
Page 172 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
29. The Indian law has developed on similar lines and the mode of annexation and object of annexation have been applied as relevant test in this country also. There are cases where machinery installed by monthly tenant was held to be moveable property as in cases where the lease itself contemplated the removal of the machinery by the tenant at the end of the tenancy. The mode of annexation has been similarly given considerable significance by the courts in this country in order to be treated as fixture. Attachment to the earth must be as defined in Section 3 of the Transfer of Property Act. For instance a hut is an immovable property, even if it is sold with the option to pull it down. A mortgage of the super structure of a house though expressed to be exclusive of the land beneath, creates an interest in immovable property, for it is permanently attached to the ground on which it is built.
30. The courts in this country have applied the test whether the annexation is with the object of permanent beneficial enjoyment of the land or building. Machinery for metal-shaping and electro- plating which was attached by bolts to special concrete bases and could not be easily removed, was not treated to be a part of structure or the soil beneath it, as the attachment was not for more beneficial enjoyment of either the soil or concrete. Attachment in order to qualify the expression attached to the earth, must be for the beneficial attachment of that to which it is attached. Doors, windows and shutters of a house are attached to the house, which is imbedded in the earth. They are attached to the house which is imbedded in the earth for the beneficial enjoyment of the house. They have no separate existence from the house. Articles attached that do not form part of the house such as window blinds, and sashes, and ornamental articles such as glasses and tapestry fixed by tenant, are not affixtures.
31. Applying the above tests to the case at hand, we have no difficulty in holding that the manufacture of the plants in question do not constitute annexation Page 173 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 hence cannot be termed as immovable property for the following reasons:
(i) The plants in question are not per se immovable property.
(ii) Such plants cannot be said to be "attached to the earth" within the meaning of that expression as defined in Section 3 of the Transfer of Property Act.
(iii) The fixing of the plants to a foundation is meant only to give stability to the plant and keep its operation vibration free.
(iv) The setting up of the plant itself is not intended to be permanent at a given place. The plant can be moved and is indeed moved after the road construction or repair project for which it is set up is completed.
127. Keeping the aforesaid principles enunciated in mind, when the facts on hand are looked into it would detain us for two long to accept the plea of the revenue insofar as two items under the definition of 'immovable property' namely Item No.1 and 2 noted hereinabove in the tabular column. However, with regard to the capital work in progress is concerned, even the Chief Controlling Revenue Authority in order dated 30.12.2019 at paragraph 5.2 has observed thus :
"It is submitted by applicant company Page 174 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 xxxxx amount of capital work in progress included which amount. However, the applicant company has not produced the said details. In these circumstances xxxx immovable property."
128. In view of this categorical finding with regard to the capital work in progress not being identifiable with bifurcation so as to treat the said work as falling within the definition of Section 2(ja) would be improper. However, the same being a mixed question of fact, same cannot be gone into in this proceeding and as such, it would be apt and appropriate for the original authority namely Collector to examine the same by calling upon the applicant to furnish the details of the same. However, we make it explicitly clear that insofar as the other two items referred to in serial Nos.1 and 2 in the tabular column hereinabove is concerned, the plea of the revenue stands accepted.
129. Similar issue with regard to stamp duty leviable on 'work Page 175 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 in progress' by bringing it within the sweep of Section 2(ja) had come up for consideration before the Coordinate Bench of which one of us was a member (Justice Aravind Kumar, CJ who was the author of the judgment) and it has been opined that in the said order rendered in Letters Patent Appeal No.906 of 2021 on 17.11.2021 to the following effect:
"8. In so far as the issue relating to work in progress for the purposes of levy of stamp duty, it is trite law that work in progress cannot be construed as an asset to be in existence for the purposes of levy of stamp duty. The definition of "immovable property" as defined under Section 2(j)(ja) of The Gujarat Stamp Act would clearly indicate that this includes land, benefits to arise out of land and things attached to the earth or permanently fastened to do anything attached to the earth. Thus, "work in progress" cannot be included in the definition of "immovable property"
and, therefore, the learned Single Judge has rightly arrived at a conclusion that levy of stamp duty of Rs.3,02,282/- on capital work in progress is liable to be set aside. This finding being in consonance with the provisions of the Act would not call for interference. However, in order to Page 176 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 satisfy ourselves as to whether the property which is situated in Maharashtra has suffered the duty, we had called upon the learned counsel appearing for the respondent to file an affidavit vide order dated 21.10.2021. Accordingly, affidavit has been filed and on perusal of the same, it would clearly indicate that transfer fee of Rs.5.00 lakhs is paid to Maharashtra Industrial Development Corporation by the petitioner on 14.11.2003 and the receipt of payment to MIDC is annexed to the affidavit at Annexure-B. Thus, duty that has been paid on the approval of the Scheme of Merger of petitioner company is in consonance with the provisions of the Act of both the States namely State of Gujarat and State of Maharashtra.
130. Hence, we are of the considered view that demand of stamp duty in respect of 'work in progress' by the Collector as indicated at Sr. No.3 in the tabular column hereinabove cannot be sustained or it is held that same is contrary to Section 2(ja) and accordingly, the question is answered partly in favour of the Revenue viz. to the extent of the land and building, plant and machinery and in favour of the applicant in S.R. No.6 of 2020 for the capital work in progress.
Page 177 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023
131. The next question which would arise for our consideration would be a reference to the levy of penalty viz. question No.3 in S.R. No.6 of 2020 which is also relatable to question No.5 in S.R. No.1 of 2020. In the instant case, the Collector, vide order dated 25.7.2018, has imposed a penalty of Rs.1 lakh in purported exercise of powers under Section 39(1)(b). Hence, we extract the said provision hereinbelow:
"39. Collector's power to refund penalty paid under section 38, sub-section (1) When a copy of an instrument is sent to the Collector under section 38, sub-section (1), he may, if he thinks fit refund any portion of the penalty in excess of five rupees which has been paid in respect of such instrument.
(2) When such instrument has been impounded only because it has been written in contravention of section 13 or section 14, the Collector may refund the whole penalty so paid."
132. The ground of which the penalty has been levied was that the order dated 26.9.2014 of the High Court sanctioning the scheme was produced on 7.3.2015 and it is in violation of Page 178 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Section 17 of the Stamp Act. Undisputedly the fact is that on the scheme having been sanctioned on 26.9.2014, the applicant noticed that there were certain typographical errors in the said order and as such 'a note for speaking to minutes' was filed on 8.10.2014 vide Annexure-C. On the very same day, Adani Transmission (India) Limited (ATIL) filed an application seeking modification of the order dated 26.9.2014 to the extent seeking permission to lodge the copy of the order for adjudication for the period of '60 days from the effective date' instead of '60 days from the date of order of sanctioning the scheme i.e. 26.9.2014' by Company Application No.294 of 2014. This application came to be allowed by the Company Court on 25.11.2014. Thus, the effective date under the sanctioned scheme occurred on 12.1.2015 and within 60 days, the application was filed under Section 31 of the Stamp Act before the Collector & Additional Superintendent of Stamps. Though this fact was urged, the same has been completely ignored by the Collector or in other words not adjudicated or in other words, the Collector has not disagreed with the contention by adjudicating the same. Likewise, the Chief Controlling Revenue Page 179 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 Authority in its order dated 30.12.2019 (Annexure-S) at paragraph No.5.6 and on the ground that the application was not preferred before 24.12.2014 as affirmed the said finding of the Collector. In view of ATIL having been filed Application No.294 of 2014 seeking modification of the order dated 26.9.2014 on 8.10.2014 and a note for speaking to minutes also having been filed on the same day viz. on 8.10.2014 having resulted in the said application being allowed on 25.11.2014, the Chief Controlling Revenue Authority could not have resorted to Section 32(a) inasmuch as Section 17 enables the applicant to submit the same within two months from the date of its execution and the effective date as per the sanction made by this Court would operate from the date of order which came to be passed on 25.11.2014 and consequently, the effective date having occurred from 12.1.2015 and the application in question having been filed on 7.3.2015, the levy of penalty was not warranted and it was contrary to law. Incidentally question which would arise as framed as question No.1 in S.R. No.7 of 2020 is being answered by directing the authorities to pass appropriate orders in the light of the references to the questions Page 180 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 referred to hereinabove having answered by this Court.
133. Thus, the references are answered as follows:
S.R. No. Questions of Law Question Answer No. 1/2020 Whether in the facts and 1 NO 6/2020 3 2/2020 circumstances of the present 1 7/2020 3 case, the learned Collector in proceeding initiated under Section 31 of the Act had any jurisdiction or authority to impound any instrument by invoking the provision of Section 33 of the Act?
1/2020 Whether in the facts and 2 NO 3/2020 1 7/2020 circumstances of the present 4 7/2020 5 1/2021 case and in view of Explanation 1 III (a) to Article 20 of the Schedule to the Act, stamp duty applicable as on the "appointed Page 181 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 date" will not be payable?
1/2020 Whether in the facts and 3 NO circumstances of the present case, a revised notice can be issued to expand the scope of an earlier show cause notice and introduced a completely new case altogether?
1/2020 Whether in the facts and 4 YES circumstances of the present case, provisions of Section 17 of the Act have any applicability qua the instrument under consideration?
1/2020 Whether in the facts and 5 NO circumstances of the present case, the provision of Section 39(1)(b) of the Act can be made applicable, more so when the mandatory requirement for the Page 182 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 invocation of the provision of Section 39(1)(b) of the Act have not been fulfilled?
1/2020 Whether in the facts and 6 NO circumstances of the present case, can any delay be ascribed to the applicant company in submitting the requisite detail / document in relation to the issuance of shares?
1/2020 Whether in the facts and 7 NO circumstances of the present case, any penalty can be levied on the applicant company?
2/2020 Whether treating the amount of 2 YES 1/2021 2 would be premium in relation to the ultra vires issuance of shares of the transferee company under a scheme of amalgamation, where neither the transferee Page 183 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 company nor the transferor company are listed companies, as consideration under Article 20(d)(i) of Schedule I to the Stamp Act in addition to the face value of the issued shares, would not be ultra vires and illegal, inter alia as being contrary to the express provision of valuation under Explanation III (c) of Article 20(d) of Schedule I to the Stamp Act?
3/2020 Whether the respondents have 2 YES erred in law and in fact in not appreciating the entries in fiscal legislation like that Gujarat Stamp Act, 1958 are required to be given strict literal interpretation and there is no scope of reading something into the entry which Page 184 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 is expressly not mentioned otherwise by the legislature in its wisdom?
3/2020 Whether respondents erred in 3 YES law and in adjudication stamp duty at Rs.1,60,83,177/- Act on the order of the Hon'ble National Company Law Tribunal, Ahmedabad Bench pertaining to the transfer of Windmill undertaking by way of slump sale and amalgamation of residue undertaking with Gopal Mirror Coating Pvt. Ltd.
4/2020 Whether an order of the High 1 It is a single 7/2020 1 composite Court under Section 232 of the scheme and Companies Act, 2013, not covered by Section sanctioning a single composite 5. scheme of arrangement, albeit between multiple companies, is not a single instrument, which is not covered by Section 5 of the Stamp Act, considering the settled position of law that the instrument covered under Article 20(d) of Schedule I to Page 185 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 the Stamp Act is an order of the High Court, and not the scheme sanctioned by such order?
4/2020 Whether an order of the High 2 It is single 5/2020 1 indivisible Court under Section 294 of the 6/2020 4 instrument 7/2020 Companies Act, 1956, 1 and Section 5 is not sanctioning a single composite attracted.
scheme of arrangement, is not a single indivisible instrument that is not comprising or relating to several distinct matters or distinct transactions as contemplated by Section 5 of the Stamp Act and not subject to levy as such, considering the fact that the instrument covered under Article 20(d) of Schedule I to the Stamp Act would be the order of the High Court, and not the scheme sanctioned by such order?
6/2020 Whether the CCRA has erred in 1 YES upholding the Collector's demand of stamp duty on the said instrument to the extent that such demand has been Page 186 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 raised by considering transmission lines of the APL as immovable property, completely overlooking the contention of the applicant that transmission lines are not attached to the earth or permanently fastened to anything attached to the earth or that transmission lines are not plant and machinery transferred or sold with the intention of running a factory and therefore could not be said to be immovable property at all?
6/2020 Whether the CCRA has erred in 2 YES upholding the Collector's demand of stamp duty on the said instrument to the extent that such demand has been raised by treating "capital works in progress" as immovable property, completely overlooking the contention of the applicant that "capital works in progress" is not Page 187 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 covered within the meaning of immovable property under Section 2(ja) of the Gujarat Stamp Act, 1958 and therefore could not be said to be immovable property at all?
7/2020 If in answer to the Question of 2 Not covered 7/2020 4 under Law (a) above, it is held that 7/2020 6 Section 5 of the said instrument executed Gujarat Stamps Act.
out of Gujarat, is covered under Section 5 of the Stamp Act by treating (i) the demerger of the Real Estate Undertaking of InterGlobe Enterprises Limited into InterGlobe Real Estate Ventures Private Limited, (ii) the demerger of IT Support Services Undertaking of InterGlobe Enterprises Limited into InterGlobe Business Solution Private Limited, (iii) the amalgamation of the residual InterGlobe Enterprises Limited with Acquire Services Private Limited, as three separate transactions, and Page 188 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 considering that the alleged separate transactions at Sr. No.
(ii) and (iii) above neither relate to any property situated in Gujarat nor relate to any matter or thing done or to be done in Gujarat, then as per Section 5 read with Section 3(b) of the Stamp Act, whether the Stamp duty chargeable on the said instrument that would not be only the stamp duty chargeable on an instrument that would comprise or relate to the alleged separate transaction at Sr. No.(i)?
7/2020 Whether the applicant is 7 YES entitled to refund of the amount of Rs.1,29,59,501/- deposited by it at the time of filing application under Section 53(1) of the Stamp Act before the Chief Controlling Revenue Authority?
1/2021 Whether the Chief Controlling 3 YES Revenue Authority has not He erred in Page 189 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023 C/SR/1/2020 CAV JUDGMENT DATED: 10/02/2023 erred in placing reliance upon placing reliance on the judgment dated 20.12.2019 judgment of learned Single Judge of the dated 20.12.2019 Hon'ble Gujarat High Court in passed in Special Civil Application Special Civil No.14597 of 2019, when the Applicatio said judgment dated 20.12.2019 n No. 14597 of has been stayed by the Division 2019 as it Bench of the Hon'ble Gujarat had been stayed by High Court vide order dated order dated 10.2.2020 passed in Letters 10.02.2020 in Letters Patent Appeal No.125 of 2020?
Patent
Appeal
No.125 of
2020
Accordingly, the above references stand disposed of.
(ARAVIND KUMAR, CJ) (ASHUTOSH SHASTRI, J) (NISHA M. THAKORE,J) GAURAV/BHARAT/AMAR Page 190 of 190 Downloaded on : Sat Feb 11 20:58:35 IST 2023