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BIO DEAL LABORATORIES LTD Versus STATE OF GUJARAT - THRO CHIEF CONTROLLING REVENUE AUTHORITY

2016 (2) TMI 818 - GUJARAT HIGH COURT

Scheme of Amalgamation - stamp duty and penalty was payable as presentation was not within one year from the date of the order of the Company Court - Held that:- When the order under Section 394 of the Companies Act sanctioning the Scheme of Amalgamation is made chargeable to duty, levy of duty is not on the order as such, but it is on the effect of the order, that is transfer of properties and assets of the transferor company to the transferee company envisaged under the Scheme. The said transf .....

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he case, would bring the subject matter within the ambit of Section 2(g)(iv) to become the conveyance. Such “conveyance” was presented within one year as above for the purpose of stamp duty, the same was therefore regularly presented.

The impugned orders taking view that stamp duty and penalty was payable as presentation was not within one year from the date of the order of the Company Court are not liable to be sustained. They are therefore hereby quashed and set aside.

It .....

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ATE FOR THE RESPONDENT : MS JYOTI BHATT, AGP ORAL JUDGMENT A Scheme of Amalgamation of one M/s.Usman Paper Mills with the petitioner company was sanctioned under Sections 391 and 394 of the Companies Act, 1956 by the Company Court by common order dated 29th October, 2004 passed in Company Petition No.04 of 2004 and Company Petition No.05 of 2004. In view of definition of conveyance in Section 2(g)(iv) of the Bombay Stamp Act, 1958 (now the Gujarat Stamp Act, 1958), the order was liable to paymen .....

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to pay deficit stamp duty amount of ₹ 05,89,340/- under Article 20(d) and ₹ 01,00,000/- towards penalty under Section 39(1)(b) of the Act. Petitioner's Revision thereagainst filed under Section 53(1) of the Act was also dismissed. 2.1 The petitioner company has thus impugned by filing the present petition, the aforementioned order dated 16th June, 2010 passed in Revision Application No.41 of 2008 by the Chief Controlling Revenue Authority-respondent herein, together with aforesa .....

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as from the aforesaid order dated 29th October, 2004 sanctioning the Scheme of Arrangement in the nature of Amalgamation under Section 301 with Section 394 of the Companies Act are reproduced with relevance. .... learned Addl. Central Government Standing Counsel appearing on behalf of the Central Government and Mr. Pranav. G. Desai, learned Advocate appearing on behalf of Dena Bank. 3 Both the Transferor and the Transferee Companies belong to the same group of management. Both are Private Limite .....

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ition and "Gujarat Mitra" (Gujarati Daily)-Surat Edition, on 24/03/2004. The publication in Government Gazette was dispensed with as directed in order dated 11/3/2004. No one has come forward with any objections to the petitions even after publication of the advertisement. 5 Notice of admission of petition of Transferor Company was served on Official Liquidator attached to the High Court of Gujarat. He has placed on record report dated 13/09/2004 along with report of Auditors appointed .....

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om the Registrar of Companies, Gujarat along with communication dated 08/09/2004 from the Regional Director indicating that the Transferor Company is a sick Company, registered with Board For Industrial & Financial Reconstruction under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act,1985 on 12/06/2002 and hence, permission of BIFR may be necessary for proposing above amalgamation. It is further submitted that the Central Government has decided that after bringing the .....

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ompany has entered into one time settlement with all the three Secured Creditors for the amounts mentioned in the Minutes. Furthermore, in the same Minutes it is recorded that the revised DRS, whereunder the Transferor Company is to amalgamate with Transferee Company, has been consented to by the Secured Creditors. It is further recorded in the Minutes that the advantages that would flow on the Scheme of Amalgamation being sanctioned are: "(a) Once the amalgamation takes place, the applican .....

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PL and thus, has a strong synergy for both the companies. (c) Bio-deal Laboratories Pvt.Ltd. will be able to get the benefits of carry forward loss of the applicant company and thus it will be able to save sizeable amount by way of tax which will in turn further help in revival of the applicant unit. (d) Once Usman Paper Mills Pvt.Ltd. is taken over as going concern by way of amalgamation, the paper mill will be operated for three shifts which will also assure additional turnover and it will als .....

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Members and their Creditors. There is no reason to withhold sanction to the Scheme of Amalgamation. Prayers in terms of paragraph No.15.(a) of Company Petition No.5 of 2004 and Company Petition No.4 of 2004 are hereby granted to the effect that arrangement embodied in the Scheme (Annexure-C) is hereby sanctioned so as to be binding on all Members, Shareholders and other persons concerned under the Scheme of Compromise with effect from the appointed date. (Para 9) As already recorded in the Minu .....

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Conveyance" includes.- (iv) every order made by the High Court under Section 394 of the Companies Act, 1956 in respect of reconstruction or amalgamation of companies, or 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 transf .....

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me, 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, whether such amount exceeds or falls short of five rupees : Provided that, when such instrument has been impounded only because it has been written in contravention of section 13 or section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section. 5.2 Section 40 relied on by the stamp authoritie .....

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or the amount of the proper duty, or the amount required to make up the same, and the Collector is satisfied that the omission to duly stamp such instrument has been occasioned by accident, mistake or urgent necessity he may instead of proceeding under section 33 and 39, receive such amount and proceed as next hereinafter prescribed. 6. Recapitulating the facts and the dates, the order of amalgamation by the Company Court came to be passed on 29th October, 2004. The same was, as noted above, sub .....

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ts before the Superintendent of Stamps for the purpose of payment of stamp duty on 17/23rd February, 2006. The said presentation was within one year from the date of order of BIFR. The stamp authorities took a stand that one year was to be counted from the date of Company Court's order, and proceeded to pass the impugned orders. 6.1 It was impermissible for the stamp authorities to issue notice under Section 39(1)(b) of the Act and ultimately passing order directing the petitioner to make pa .....

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