Article 23A stamp duty for amalgamation must follow its specific rate, not the general conveyance rate

Article 23A of the Indian Stamp Act, 1899 provides a self-contained regime for stamp duty on amalgamation, merger, reconstruction, or demerger. The opening reference to conveyance does not displace the specific rates and limiting conditions in sub-clauses (a) and (b), and the phrase "whichever is higher" applies only within the alternatives stated in the relevant sub-clause. Where the transferor company holds no immovable property in West Bengal, duty is computed on the aggregate consideration paid by the transferee company at the rate specifically prescribed in Article 23A, not at the general conveyance rate under Article 23. The higher demand based on Article 23 was held unsustainable.

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Issues: Whether, on a scheme of amalgamation involving transfer of no immovable property in West Bengal, the stamp duty payable under Article 23A of the Indian Stamp Act, 1899 was to be computed at the rate applicable under Article 23 as a conveyance or at the rate specifically prescribed in Article 23A.

Analysis: Article 23A specifically governs conveyance in respect of amalgamation, merger, reconstruction, or demerger and creates a self-contained scheme for computation of duty. The opening reference to conveyance does not displace the specific percentages and limiting conditions set out in sub-clauses (a) and (b). The expression "whichever is higher" operates only within the two alternatives in the relevant sub-clause and cannot be extended to import the highest rate under Article 23 for every case. Such an interpretation would render the carefully structured rates in Article 23A redundant and otiose. Since the transferor company had no immovable property in West Bengal, the applicable basis was the aggregate consideration paid by the transferee company, and duty had to be computed at the rate specifically provided under Article 23A.

Conclusion: The impugned demand based on 6% under Article 23 was unsustainable; the correct stamp duty was half per cent on the value paid by the transferee company, and the writ petition succeeded.

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