Stamp duty on amalgamation orders: court-sanctioned transfers of property and liabilities can be treated as instruments and conveyances.

An order sanctioning a scheme of amalgamation or demerger was treated as an instrument and conveyance because it effects transfer of property and liabilities, making it chargeable to stamp duty under the Stamp Act. The Court noted that the definition of instrument is wide enough to cover such orders and that a prior Supreme Court view supported this treatment. The 1937 remission notification was not available after the relevant conveyance entry was carried into the State stamp law, so it could not defeat the levy. The stated legal position is that, unless a statute expressly exempts it, a court-sanctioned restructuring order attracts stamp duty in the State.

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Issues: (i) Whether an order sanctioning a scheme of amalgamation or demerger under the Companies Act is an instrument and conveyance exigible to stamp duty under the Stamp Act. (ii) Whether the 1937 remission notification continued to exempt such orders from stamp duty in the State.

Issue (i): Whether an order sanctioning a scheme of amalgamation or demerger under the Companies Act is an instrument and conveyance exigible to stamp duty under the Stamp Act.

Analysis: The charging provision of the Stamp Act applies to instruments, and the statutory definition of instrument is wide enough to include documents by which rights or liabilities are transferred or recorded. An order sanctioning a scheme under Section 394 of the Companies Act effects transfer of property and liabilities pursuant to a consensual arrangement, and the Supreme Court had already treated such an order as an instrument attracting stamp duty. The contrary view taken in Madhu Intra was held not to prevail because it had not noticed the binding Supreme Court decision. The Court therefore held that such an order also answers the description of a conveyance and is chargeable to stamp duty under the applicable Stamp Act.

Conclusion: Yes. An order sanctioning a scheme of amalgamation or demerger is an instrument and conveyance exigible to stamp duty.

Issue (ii): Whether the 1937 remission notification continued to exempt such orders from stamp duty in the State.

Analysis: The Court accepted that pre-Constitution notifications may continue under Article 372 only so long as they are not altered, repealed, or amended by competent authority. However, the relevant article governing conveyances had been carried into Schedule IA of the State stamp law, and the remission under the old notification was no longer available after the statutory change. The notification could not therefore be invoked to defeat levy of duty on orders sanctioning schemes.

Conclusion: No. The 1937 remission notification was not applicable and did not exempt such orders from stamp duty in the State.

Final Conclusion: The petitions failed on the merits of the stamp-duty objection, and the Court declared that schemes of amalgamation or demerger sanctioned under Section 394 attract stamp duty in the State, while the claimed remission notification does not apply.

Ratio Decidendi: Where a scheme sanctioned by court transfers property and liabilities, the resulting order can be treated as an instrument and conveyance under the Stamp Act and is chargeable to duty unless the applicable statute expressly exempts it.

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