Stamp Duty Calculation in Demerger Must Reflect Share Market Value, Not Enterprise Net Worth Under Article 25 (da) (ii)

HC determined the proper basis for stamp duty levy in a demerger scheme. The Collector of Stamps erroneously computed duty on the net worth of the demerged undertaking, contrary to Article 25 (da) (ii) of the Maharashtra Stamp Act. The court held that stamp duty must be calculated based on the market value of shares issued and allotted, plus any consideration paid. Since no separate consideration was involved, the value of shares allotted to equity shareholders constitutes the entire transaction consideration. The HC ruled that the statutory formula must be strictly followed, rejecting the use of enterprise value or net worth as a basis for stamp duty calculation. Petition was allowed, directing recalculation of stamp duty in accordance with the prescribed statutory method. .....

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