2024 (2) TMI 1188 - HC - Companies Law

Revenue authorities must re-hear stamp duty appeal within four months after natural justice violation

M/s. Wordline ePayments India Private Limited Formerly known as M/s. Ingenico ePayments India Private, Limited, Earlier known as M/s. E-Billing Solutions Limited Versus The State of Maharashtra, The Chief Controlling Revenue Authority, Pune, The Collector of Stamps (Enforcement-I), Mumbai, Additional Controller of Stamps Mumbai

Bombay HC directed revenue authorities to re-hear petitioner's appeal within four months after finding violation of natural justice principles in issuing ... Violation of principles of natural justice - Interim Demand Notice demanding stamp duty issued without adequately scrutinizing the case, and without going into the details along with all the supporting documents in the matter - HELD THAT:- The Petitioner had filed an Appeal challenging the Order dated 14th September 2021 on 2nd November 2021. A hearing was held in the said Appeal on 7th June 2023 and Petitioner filed its written submissions on 7th August 2023. Despite the same, and despite a period of more than 2 years having elapsed, Respondent No. 2 has not passed any order on the said Appeal. It is informed that the Presiding Officer of Respondent No. 2, who heard the said Appeal on 7th June 2023, has changed. In these circumstances, it would be in the interests of justice that Respondent No. 2 is directed to re-hear the Appeal and pass an order in the said Appeal filed by the Petitioner, in accordance with law, within a period of four months from the date of intimation of this Order. Further, since, the said Demand Notice dated 16th March 2022 and the letter dated 23rd January 2024 had been issued by Respondent No. 3, pursuant to the said Order dated 14th September 2021, which is the subject matter of the aforesaid Appeal, it would also be in the interests of justice that, till the said Appeal is re-heard and an order is passed on the said Appeal, the said Demand Notice dated 16th March 2022 and the said letter dated 23rd January 2024 remains stayed. Respondent No. 2 is directed to re-hear Appeal No. 227 of 2021 filed by the Petitioner and pass an Order, in accordance with law, expeditiously and, in any case, within a period of four months from the date of intimation of this Order - Till the said Order is passed by Respondent No. 2 on the said Appeal, the Demand Notice dated 16th March 2022 and the letter dated 23rd January 2024 issued by Respondent No. 3 shall remain stayed and the Petitioner shall be permitted to operate its ICICI Bank Account. Writ petition disposed off. Issues involved:The issues involved in the judgment are related to a demand notice issued by Respondent No. 3 for stamp duty, penalty, and freezing of the Petitioner's bank account, the subsequent appeal filed by the Petitioner, and the delay in decision-making by Respondent No. 2.Scheme of Amalgamation:The Petitioner, a company incorporated under the Companies Act, 1956, was involved in a scheme of amalgamation with another company, which was sanctioned by the National Company Law Tribunal (NCLT) in Mumbai. The Petitioner lodged the order for adjudication as directed by the NCLT.Demand Notice and Appeal:Respondent No. 3 issued an Interim Demand Notice demanding stamp duty from the Petitioner, which was objected to by the Petitioner. Despite objections, Respondent No. 3 confirmed the demand. The Petitioner filed an appeal challenging this order, but before the appeal could be decided, a further demand notice was issued by Respondent No. 3 for stamp duty and penalty.Judicial Intervention:The Petitioner filed a Writ Petition under Article 226 of the Constitution seeking directions to withdraw the order for attaching the bank account and to expedite the decision on the appeal. The Court noted the delay in deciding the appeal and the coercive steps taken by Respondent No. 3, causing prejudice to the Petitioner.Court's Decision:The Court directed Respondent No. 2 to re-hear the appeal and pass an order within four months. Pending the appeal decision, the demand notice and freezing of the bank account were stayed. The Court clarified that the order was not based on the merits of the case, keeping all contentions open. The Writ Petition was disposed of with no order as to costs.