TaxTMI 
TaxTMI 
1999 (11) TMI 813
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....l Breweries Ltd. with the petitioners' company. While the petitioners contend that the demand of transfer fees is arbitrary and illegal, it is the case of the respondents that pursuant to the amalgamation of Kesarval Breweries Ltd. with the petitioners' company there is a change of entity resulting in transfer of ownership. 2. The challenge of the petitioners is three-fold : firstly, that the amalgamation of Kesarval Breweries Ltd. into the petitioners' company does not amount of transfer of ownership. Secondly, that the said Act does not empower the Government to issue the notification for payment of transfer fees and thirdly that the application for substitution of the name of the petitioner in place of that of Kesarval Breweries Ltd. ....
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....gments of the Apex Court in the matter of Bacha F. Guzdar v. CIT [1955] 25 Comp. Cas. 1 ; AIR 1955 SC 74, Life Insurance Corpn. of India v. Escorts Ltd. AIR 1986 SC 1370, General Radio and Appliances Co. Ltd. v. M.A. Khader (Decd.) by Legal Representatives AIR 1986 SC 1218 and Saraswati Industrial Syndicate Ltd. v. CIT [1991] 70 Comp. Cas. 184 (SC). 3. The Apex Court in Bacha F. Guzdar's case (supra) has held that the right of the shareholder to participate in the profits of the company may be readily conceded but it is not possible to accept the contention that the shareholder acquires interest in the assets of the company. It has been further held that the company is a juristic person and is distinct from the shareholders. 4. In Lif....
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....assets. A contrary view taken by the High Court of Punjab and Haryana on the point of the effect of amalgamation of two companies was declared to be not a correct view. It is further held that the true effect and character of the amalgamation largely depends on the terms of the scheme of merger but there can be no doubt that when two companies amalgamate and merge into one, the transferor-company loses its entity as it ceases to have its business, and though their respective rights or liabilities are determined under the scheme of amalgamation the corporate entity of the transferor-company ceases to exist with effect from the date the amalgamation is made effective. 7. In view of the decision of the Apex Court in Saraswati Industrial Syn....
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....f licences and not with the transfer of licences. The contention is countered by referring to section 15 of the Act which enables the Government to grant the licences under conditions and restrictions and rules 41 and 43 read with rule 104 of the Goa, Daman and Diu Excise Duty Rules, 1964 ('the Rules'), deal with the provisions regarding the procedure for grant of licence and transfer and its consequences. Reliance is also sought to be placed by the learned Advocate-General in the matter of Khoday Distilleries Ltd. v. State of Karnataka [1996] 10 SCC 304 in support of his contention that the Government under its regulatory powers has the right even to prohibit absolutely every form of activity in relation to intoxicants, its manufacture, st....
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....ansferred by any licensee to another person unless such person has procured a written permission from the Commissioner to do so or procure a valid licence therefore. These rules read with rule 104(7) and section 15(1)(iii) clearly disclose that in the case of transfer of licence, the transferee is bound to pay the transfer fees for continuing to enjoy the benefit of licence granted to the transferor-company. The Apex Court in Khoday Distilleries Ltd.'s case (supra) has clearly held thus (page 319) : "In the case of Har Shankar v. Deputy Excise and Taxation Commissioner [1975] 3 SCR 254, 278; [1975] 1 SCC 737 this court upheld the right of the State to prohibit absolutely all forms of activities in relation to intoxicants. It said that th....
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.... Breweries had merged with the petitioners, company pursuant to the amalgamation requested the respondents for endorsement of the licence for manufacture of beers, etc., of the transferor-company in favour of the petitioners' company. While such application was pending for consideration, the said notification came into force. Under the said notification, the rates of excise duty for transfer of licence of the distilleries for manufacture of IMFL (Indian-made foreign liquor) was fixed at rupees one lakh. Undisputedly Notification No. FIN (Rev)/2-35/15-75(c), dated 25-3-1976, clearly discloses that the rates of excise duty under 'Part D' of the notification are the rates of fees per year. It is not in dispute and cannot be in dispute that the....