Stamp duty on share transfer deeds remains with the executant, not the company registering the transfer.

A company that registers a transfer of shares on an instrument not duly stamped does not incur liability for the stamp duty on that deed. Section 34(3) of the Indian Companies Act bars registration unless the transfer instrument is duly stamped and executed, but it does not shift the duty to the company. Under section 29 and article 62(a) of the Indian Stamp Act, the duty falls on the person drawing, making, or executing the transfer instrument unless there is a contrary agreement. The Collector may recover duty only from the person legally liable, and the absence of a penalty provision similar to the one for unstamped share-warrants supports that no company liability is created merely by registration.

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Issues: Whether a company that registers a transfer of shares, though the transfer deed is not duly stamped, becomes liable to pay the stamp duty on the instrument, or whether the liability remains only on the executant of the transfer deed.

Analysis: Section 34(3) of the Indian Companies Act prohibits registration of a transfer unless the instrument is duly stamped and executed, but it does not create any liability in the company to pay the stamp duty. Under section 29 and article 62(a) of the Indian Stamp Act, the expense of providing the proper stamp on a transfer of shares falls on the person drawing, making, or executing the instrument in the absence of a contrary agreement. The scheme of sections 33, 40, and 48 of the Indian Stamp Act shows that, after impounding an insufficiently stamped document, the Collector can require payment only from the person who is legally liable for the duty. The absence of a penal provision corresponding to section 62(2), which specifically penalises an unstamped share-warrant issued by a company, reinforces that no similar liability is imposed on a company merely for registering an unstamped transfer deed.

Conclusion: The company was not liable to pay the Indian stamp duty on the transfer deed; the liability rested on the executant, and the revenue authorities could proceed only against that person.

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