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of <h1>Court rules company particulars as 'agreement' not 'conveyance' for stamp duty. Indian Companies Act interpretation.</h1> <h3>Bhola Ram & Sons Ltd. Versus The Crown</h3> The court clarified that particulars filed by a company were to be treated as an 'agreement' rather than a 'conveyance' for stamp duty purposes. The case ... Return as to allotment Issues:Interpretation of Stamp Duty - Whether particulars filed with the Registrar are chargeable as a 'conveyance' or an 'agreement'.Analysis:The case involved a reference by the Chief Commissioner under section 57 of the India Stamp Act regarding the stamp duty chargeability of particulars filed with the Registrar by a company. The company, formed to take over a partnership business, had allotted shares in consideration of an oral agreement to transfer assets, liabilities, and goodwill. The issue was whether the filed particulars should be treated as a 'conveyance' or an 'agreement' under section 104 of the Indian Companies Act. The disagreement arose over the stamp duty payable on the particulars, with the company claiming it was an agreement liable to a duty of one rupee, while the authorities deemed it a conveyance requiring a higher duty.The interpretation of section 104 of the Indian Companies Act was crucial in determining the stamp duty chargeability. Subsection (1) required the production of a written contract for shares allotted as fully or partly paid up 'otherwise than in cash'. Subsection (2) mandated filing prescribed particulars if the contract was not reduced to writing, with the same stamp duty as a written contract. The key issue was identifying the contract constituting the title of the allottee, which in this case was an oral agreement to transfer assets in the future. The company argued that as the agreement was for future transfer, it should be considered an agreement, not a conveyance.The court analyzed the nature of the agreement and the wording of the prescribed forms (Form VI and Form VII) supplied by the company. It was established that the particulars filed represented an agreement to transfer property in the future, not an immediate conveyance. The court held that the particulars could not be treated as a 'conveyance' as the contract was only for future transfer, aligning with precedents where similar agreements were not considered conveyances. The court emphasized the strict interpretation of fiscal enactments and concluded that the particulars should be treated as an agreement, not a conveyance, for stamp duty purposes.The judgment, with agreement from all judges, clarified that the particulars filed by the company were not chargeable as a 'conveyance' but should be treated as an 'agreement' for stamp duty purposes. The court highlighted the need for legislative consideration if the existing law was deemed unsatisfactory, emphasizing the importance of interpreting laws as they stand. The decision provided clarity on the stamp duty chargeability of such agreements in the context of share allotments and business transfers.
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