Market Value for Unlisted Shares must be taken as face value; share premium excluded for stamp duty computation.

For instruments under Article 20(d) of Schedule I, Explanation III(c) requires that where neither transferee nor transferor shares are listed the market value is the face value, and share premium is not a separate consideration for stamp duty; outcome: premium excluded. A single composite scheme sanctioned by a company court/NCLT that effects a unified reconstruction with community of interest is treated as one indivisible instrument and is not ordinarily aggregated under Section 5; outcome: valuation applies to the instrument as a whole. A Collector exercising adjudication under Section 31 lacks jurisdiction to impound under Section 33 in that adjudicatory stage; outcome: impounding and penalties require statutory conditions and timelines to be met before imposition.

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Issues: (i) Whether, for instruments covered by Article 20(d) of Schedule I of the Gujarat Stamp Act, 1958, where neither transferee nor transferor shares are listed, the market value of shares is to be taken as face value and whether share premium can be treated as separate 'consideration' for computing stamp duty; (ii) Whether a single composite scheme sanctioned by the Company Court / NCLT is a single indivisible instrument not attracting Section 5 of the Gujarat Stamp Act, 1958; (iii) Whether the Collector exercising adjudication under Section 31 of the Gujarat Stamp Act, 1958 has jurisdiction to impound instruments under Section 33; (iv) Whether stamp duty is chargeable with reference to the appointed date in a sanctioned scheme or with reference to the date of execution / order; (v) Whether penalty under Section 39(1)(b) and liability for delay can be imposed where the statutory conditions and timelines (including Section 17) have been complied with.

Issue (i): Whether Explanation III(c) to Article 20(d) mandates that where neither transferee nor transferor shares are listed the market value of shares is the face value and whether premium can be treated as separate consideration for computing stamp duty.

Analysis: Explanation III(c) to Article 20(d) expressly stipulates that where both transferee and transferor shares are not listed (or not quoted), the market value of shares for the purpose of clause (d) means the face value of the shares. Article 20(d)(i) separately aggregates (a) market value or face value of shares (whichever is higher) and (b) amount of consideration, if any. The statute and its explanations must be read literally for a fiscal enactment; an explanation ordinarily clarifies the main provision and cannot be used to import additional words (such as premium) into the separate concept of 'consideration' unless the statute so provides. Article 18 expressly shows where premium is relevant elsewhere in the Act; Article 20(d) and Explanation III(c) evince legislative intent to treat face value as determinative in the unlisted-unlisted case.

Conclusion: The face value of shares is to be treated as the market value under Explanation III(c) to Article 20(d); share premium cannot be treated as a separate 'consideration' for computing stamp duty under Article 20(d)(i).

Issue (ii): Whether a single composite scheme sanctioned by Company Court/NCLT is a single indivisible instrument not subject to aggregation under Section 5 of the Gujarat Stamp Act.

Analysis: Section 5 applies where an instrument comprises or relates to several distinct matters or distinct transactions. Authorities establish that whether matters are 'distinct' depends on the instrument's contents, parties' interests and whether there is community of interest. A single composite sanctioning order that effects reconstruction/amalgamation among companies managed and restructured as a unit, and which operates as one instrument, will not necessarily comprise separate distinct transactions for Section 5 purposes. Where the sanctioned scheme is a single composite instrument effectuating one unified reconstruction (with community of interest and a single sanctioning order), Section 5 is not attracted and the cap/valuation under Article 20(d) applies to the instrument as a whole.

Conclusion: A single composite scheme sanctioned by the Company Court / NCLT is a single indivisible instrument for the purposes of Article 20(d) and is not ordinarily subject to aggregation under Section 5.

Issue (iii): Whether the Collector, when acting under Section 31 (adjudication as to proper stamp), has jurisdiction to impound an instrument under Section 33.

Analysis: Section 31 empowers the Collector to determine duty on instruments brought for opinion; Section 32 provides for endorsement if duty is paid within statutory limits. Section 33 deals with impounding where an instrument is produced before a person in performance of functions (e.g., for evidence or registration). Precedent and statutory scheme indicate that when a person approaches the Collector under Section 31 merely for an opinion, the Collector's role is adjudicative and not an impounding stage; impounding under Section 33 is a subsequent stage when the instrument is presented for use/registration or is produced in proceedings. Thus the Collector has no jurisdiction to impound an instrument in proceedings initiated purely under Section 31 for adjudication.

Conclusion: The Collector had no jurisdiction to impound instruments in proceedings initiated under Section 31; impounding under Section 33 cannot be invoked in that adjudicatory stage.

Issue (iv): Whether stamp duty applicable should be determined with reference to the appointed date mentioned in the scheme or the date of execution / order sanctioning the scheme.

Analysis: The definition of 'chargeable' and Section 3 indicate stamp duty is determined by reference to the date of execution/when instrument becomes chargeable. Explanation III ties 'market value' to the appointed date or, where not fixed, to the date of the sanctioning order for listed cases; however, the statutory scheme and limitation provisions (including Section 17) show that chargeability relates to execution/presentation for stamping. The appointed date concept must be harmonised with the operation of the Stamp Act; the Court answered questions on particular facts accordingly.

Conclusion: Stamp duty is not simply determined by the earlier appointed date as a matter of law in the face of the statutory scheme; the date of execution / sanction and the statutory provisions govern chargeability subject to the explanations in Article 20(d).

Issue (v): Whether penalty under Section 39(1)(b) and liability for delay can be imposed where statutory conditions/timelines (including Section 17) have been met or where authorities accepted demands prematurely.

Analysis: Section 17 prescribes time-limits for stamping; Section 39(1)(b) permits penalty when an impounded instrument is found unstamped but only where procedural conditions for impounding and penalty are satisfied. Where (on the facts) the scheme's effective date and permitted filing periods were complied with (or where the applicant sought adjudication under Section 31 within permitted time after modifications), penalty and delay findings were unsustainable. Further, revised notices issued before finality of proceedings are permissible to correct apparent mistakes.

Conclusion: Penalty and delay liability could not be sustained where statutory conditions were satisfied; in the facts presented penalties were not warranted and revised notices issued prior to final adjudication were permissible.

Final Conclusion: The Court construed Article 20(d) and its Explanation III(c) strictly in favour of the subjects where applicable, held that premium cannot be treated as separate consideration for stamp duty when Explanation III(c) applies, held that single composite sanctioning orders are not ordinarily to be fragmented under Section 5, and restricted impounding and penalty powers where the statutory adjudicatory procedure under Section 31/Section 17 has been properly invoked. The cumulative effect is relief to the applicants on multiple referred questions while leaving authorities to recompute or act consistently with these legal conclusions.

Ratio Decidendi: For instruments covered by Article 20(d) of Schedule I of the Gujarat Stamp Act, 1958, when neither transferee nor transferor shares are listed, Explanation III(c) mandates treating the market value of the shares as their face value (excluding share premium from separate consideration); a single composite scheme sanctioned by the Company Court/NCLT is ordinarily a single instrument not attracting aggregation under Section 5; and the Collector acting under Section 31 cannot impound instruments under Section 33 or levy penalties unless the statutory conditions for impounding and penalties are satisfied.

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