Amalgamation sanction order is the chargeable instrument for stamp duty; Section 19 rebate unavailable for outside-State duty credit.

In an amalgamation under Sections 391 and 394 of the Companies Act, 1956, the court order sanctioning the scheme is the operative instrument that effects transfer of property and liabilities, so it is the document chargeable to stamp duty under the Bombay Stamp Act, 1958. The scheme itself is not the charging instrument. Duty is attracted on execution of the sanctioning order in Maharashtra, and Section 19 rebate is unavailable because the order was not executed outside the State and later received there. Accordingly, no credit was admissible for duty paid in another State.

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Issues: (i) Whether a scheme of amalgamation sanctioned under Sections 391 and 394 of the Companies Act, 1956, or the court order sanctioning it, is the instrument chargeable to stamp duty where orders are passed by two different High Courts; (ii) whether stamp duty is chargeable on the scheme itself or on the order sanctioning the scheme as the operative instrument; (iii) whether a company is entitled to rebate under Section 19 of the Bombay Stamp Act, 1958, for stamp duty already paid in another State; and (iv) whether the scheme or arrangement can be treated as a document executed outside the State for the purpose of Section 19.

Issue (i): Whether a scheme of amalgamation sanctioned under Sections 391 and 394 of the Companies Act, 1956, or the court order sanctioning it, is the instrument chargeable to stamp duty where orders are passed by two different High Courts.

Analysis: The scheme by itself does not effect transfer of property. Under the Bombay Stamp Act, 1958, the charge falls on an instrument, and the definition of instrument includes a document by which rights or liabilities are created, transferred, limited, extended, extinguished, or recorded. In an amalgamation under Section 394 of the Companies Act, 1956, the transfer of property and liabilities takes effect by virtue of the court order sanctioning the scheme. The order of the High Court is therefore the operative document that brings about the transfer and answers the statutory description of an instrument and a conveyance. Where separate orders are required from different High Courts, the order of the Bombay High Court remains the instrument chargeable in Maharashtra.

Conclusion: The scheme is not the chargeable instrument; the court order sanctioning the scheme is. This finding is in favour of Revenue.

Issue (ii): Whether stamp duty is chargeable on the scheme itself or on the order sanctioning the scheme as the operative instrument.

Analysis: The Court applied the statutory scheme of Sections 2, 3 and 17 of the Bombay Stamp Act, 1958. Duty is attracted on execution of the instrument, and the relevant event is the execution of the order passed by the High Court in Maharashtra. The scheme becomes effective only through the court's sanctioning order, and the order is not merely incidental. The valuation and computation provisions do not convert the scheme alone into the charging instrument. The taxable event is the order that effects the transfer, not the underlying commercial arrangement.

Conclusion: Stamp duty is chargeable on the court order sanctioning amalgamation, not on the scheme alone. This finding is in favour of Revenue.

Issue (iii): Whether a company is entitled to rebate under Section 19 of the Bombay Stamp Act, 1958, for stamp duty already paid in another State.

Analysis: Section 19 applies only where an instrument of the relevant description is executed outside the State and later received in Maharashtra, and where duty already paid elsewhere can be deducted from the Maharashtra duty. The order in question was executed by the Bombay High Court in Maharashtra and was not executed outside the State or subsequently received within it. The statutory conditions for invoking Section 19 were therefore not satisfied.

Conclusion: No rebate or set-off under Section 19 is available. This finding is against the assessee and in favour of Revenue.

Issue (iv): Whether the scheme or arrangement can be treated as a document executed outside the State for the purpose of Section 19.

Analysis: The scheme or arrangement is not itself the chargeable document, and in any event the Bombay High Court order was executed within Maharashtra. Since Section 19 is confined to instruments executed outside the State and later received in Maharashtra, the provision had no application on these facts. The statutory preconditions for treating the matter as an outside-State execution were absent.

Conclusion: The scheme or arrangement cannot be treated as a document executed outside Maharashtra for Section 19 purposes. This finding is in favour of Revenue.

Final Conclusion: The Maharashtra High Court order sanctioning the amalgamation was the chargeable instrument, full stamp duty was payable in Maharashtra, and no credit or rebate was admissible for duty paid in Gujarat.

Ratio Decidendi: In an amalgamation under Sections 391 and 394 of the Companies Act, 1956, the court order sanctioning the scheme is the operative instrument that effects transfer and is chargeable to stamp duty; stamp duty is levied on the instrument executed in the State, and Section 19 relief is available only when the instrument was executed outside the State and later received within it.

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