Stamp duty on company allotment particulars depends on whether the arrangement effects an immediate transfer, not a future agreement.
Prescribed particulars filed under section 104 of the Indian Companies Act for shares allotted on the basis of an oral agreement to transfer business assets and goodwill were chargeable only as an agreement, not as a conveyance. The court held that section 104 required filing of the contract constituting title to the allotment, and if the contract was oral, the particulars attracted the same duty as the written contract would have borne. Because the arrangement contemplated only a future transfer and did not effect an immediate transfer of property inter vivos, it did not satisfy the definition of conveyance under the Stamp Act. Strict construction of fiscal statutes required refusal to extend stamp duty beyond the operative legal form.
Issues: Whether the prescribed particulars filed under section 104 of the Indian Companies Act in respect of shares allotted for an oral agreement to transfer business assets and goodwill were chargeable to stamp duty as a conveyance or only as an agreement.
Analysis: Section 104 required filing of the contract constituting the title to the allotment, and where the contract was not reduced to writing, the prescribed particulars were to bear the same stamp duty as would have been payable if the contract had been written. The particulars in question represented an agreement to transfer property in the future, not an actual transfer of property in presenti. A conveyance under the Indian Stamp Act requires an operative transfer of property, and an agreement to transfer later does not satisfy that definition. Fiscal enactments are to be construed strictly, so the court would not treat the particulars as a conveyance merely because the transaction may have been intended to avoid duty.
Conclusion: The particulars were chargeable only as an agreement and not as a conveyance; the reference was answered in favour of the company.
Ratio Decidendi: For stamp-duty purposes, particulars filed under section 104 of the Indian Companies Act for an unrecorded agreement to transfer assets in the future are not a conveyance unless they effect an actual transfer of property inter vivos.
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