TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 1480
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.... by the Government of Himachal Pradesh under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972 to purchase land in Nalagarh area of District Solan, Himachal Pradesh on 12.6.2009. A sale deed was registered in the name of the petitioner-company on 20.2.2010. According to the petitioner, at the time of registration of sale deed, requisite stamp duty amounting to Rs. 20,27,800/- was duly paid by the Company. The Company started running into losses in the year 2015, on account of low capacity utilization. In these circumstances, the major shareholder i.e. JST Transformateurs requested M/s Stesalit Limited to contribute to the losses but the same was denied and there arose a dispute between the shareholders, which culminated into litigation before the Company Law Board as well as Arbitration in Singapore, as per shareholders agreement. During the pendency of the lis at different levels, minority shareholder i.e. M/s Stesalit Limited decided to sell its shares to JSTT on 27.5.2017 and move out of the joint venture. A settlement agreement was entered into between them on 27.5.2017 to this effect. 2. Case of the petitioner is that upon the exit of the minority shareho....
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....stamp duty is chargeable. Learned counsel for the petitioner argued that this issue is no more res integra and has been decided against the respondent-State by a catena of decisions of this Court. Reliance is placed upon the judgments of this court in M/s Fresenius Kabi Oncology Limited v. H.P. State Industrial Development Corporation Limited, CWP No. 1788 of 2010, decided on 2.8.2018, Reckitt Benckiser (India) Private Limited v. State of H.P. and another, CWP No. 1293 of 2019, decided on 29.2.2020 and M/s Sozin Flora Pharma LLP v. State of Himachal Pradesh and another, decided on 7.1.2021. 5. On the other hand, while opposing the writ petition, Mr. Vikas Rathore, learned Additional Advocate General, submitted that the respondents have rightly ordered to charge the stamp duty and registration fee, as present case is not a case of mere change of name of the company. Originally, the purchase of land was made by M/s JSTI Transformers Pvt. Ltd, which was a joint venture of France based JST Transformers Private Limited and Stesalit Limited, a company incorporated under the Indian Companies Act. Purchase of the land was made on the basis of permission granted by the Government vide orde....
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....ction 391 to 394 no stamp duty shall be payable. Where no such direction has been given by the Court while sanctioning scheme of amalgamation then on such instrument, stamp duty shall be chargeable. 3. In cases where merely the name of the Company is changed with the approval of the Registrar of Companies in terms of Sections 21 and 23 of the Companies Act,1956, no transaction/sale of property takes place and only change in name of the Company is sought to be recorded in the revenue record, no stamp duty is chargeable. 4. For the purpose of this clarification, the change of name of a company will mean that an existing company with name "A" changes its name to "B" which is not the name of a pre-existing company and name "A" ceases to exist consequent to this change. It is also clarified that in case assets are proposed to be transferred to a company or an existing company proposes to change its name to a preexisting company, the it will constitute transfer/merger and will normally constitute a transaction and will required registration after obtaining permission under the provisions of Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972 5. In cases, where....
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.... supplementary transfer deed qua the plot is executed in favour of the petitioner. This Court held that mere acquiring of equity share capital of 'Dabur Pharma Limited' by the petitioner Company does not amount to transfer, assignment or parting with the possession or any other rights of the allottee Company, neither with the plot in question nor structure in existence thereon. The acquiring of equity share capital of the allottee Company by the petitioner also does not contravene the conditions contained in Clause 2(xi) of the conveyance deed. In such circumstances, how a right to claim unearned increase/transfer charges would have arisen in favour of the respondent is not understandable, held this Court. 9. The High Court of Calcutta in a similar dispute pertaining to petitioner herein itself, in Writ Petition No. 24788 (W) of 2010, titled M/s Fresenius Kabi Oncology Limited v. The State of West Bengal and others and its connected matter Writ Petition No. 26049(W) of 2014 titled M/s Fresenius Kabi Oncology Limited and another v. The State of West Bengal and another, held as under: "8. Main case of the petitioners, however, is that change of the name of a company does not const....
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....t judgment negatives the position taken up on behalf of the appellant that a shareholder has got a right in the property of the company. It is true that the shareholders of the company have the sole determining voice in administering the affairs of the company and are entitled, as provided by the Articles of Association to declare that dividends should be distributed out of the profits of the company to the shareholders but the interest of the shareholder either individually or collectively does not amount to more than a right to participate in the profits of the company. The company is a juristic person and is distinct from the shareholders. It is the company which owns the property and not the shareholders. The dividend is a share of the profits declared by the company as liable to be distributed among the shareholders. Reliance is placed on behalf of the appellant on a passage in Buckley's Companies Act, 12th Ed., page 894, where the etymological meaning of dividend is given as dividendum, the total divisible sum but in its ordinary sense it means the sum paid and received as the quotient forming the share of the divisible sum payable to the recipient. This statement does no....
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....t as well as of this Hon'ble Court, this Court has no hesitation to hold that with the transfer of the share by the promoter shareholder to the present shareholder, namely the transferees of such share, the lease hold interest of the company was not transferred from the promoter shareholder to the present shareholder of the said company. The petitioner-company which obtained the said lease from the Government, still remains the lessee of the said plot of land and its leasehold interest in the said plot of land remains unaffected by transfer of share by the promoter shareholders to the present holders. As such, this Court holds that the restrictive clause regarding transfer of the lease hold interest of the lessee in favour of a stranger, sub-lessee or assignee, does not attract in the present case and as a result, the demand for transfer fees for recognizing the alleged transfer of leasehold interest from the erstwhile shareholders of the said company to the present shareholder, is absolutely illegal and unlawful and as such, that part of such demand, which was made by the concerned authority in the impugned order and/or letter as aforesaid, stands quashed." 15. So far as these ....
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....ed the sale of the land and building, while granting permission in favour of the petitioner under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972 vide letter dated 7.12.2005. The change of the name was carried out consequent upon conversion of the petitioner from a public limited company to a private limited company in accordance with the provisions of Section 13 of the Companies Act. Accordingly, the petitioner made an application to the respondents for change of name of the petitioner from "Reckitt Benckiser (India) Limited to "Reckitt Benckiser (India) Private Limited" in the revenue record pertaining to the land in question. The respondents recommended the case of the petitioner for permission to transfer the land alongwith assets in the name of M/s Reckitt Benckiser (India) Private Limited, however, subject to payment of stamp duty and registration fee on its value merely on account of addition of words, "Private" in its name. This Court held that the change in the name of the company was made with the approval of the Registrar of the Companies though even such approval was also not required as per the proviso to Section 13(2) of the Act, where the only ....
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....d as a Company, the said two conditions are not attracted. There is no conveyance of the property executable in favour of the Limited Company. It is no doubt true that all properties of the Firm vests in the Limited Company on the Firm being treated as a Company under Part IX of the Companies Act, but that vesting is not consequent or incidental to a transfer. It is a statutory vesting of properties in the Company as the Firm is treated as a Limited Company. On vesting of all the properties statutorily in the Company, the cloak given to the Firm is replaced by a different cloak and the same Firm is now treated as a Company, after a given date. In the circumstances, in our view, there is no transfer of a capital asset as contemplated by Section 45(1) of the Act. Even assuming for the sake of argument that there is a transfer of a capital asset under Section 45(1) because of the definition of the word "transfer" in Section 2(47)(iii), even then we are of the view that liability to pay capital gains would not arise because Section 45(1) is required to be read with Section 48, which provides for mode of computation................................" 12. Similar issue came up before And....
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....he property of the previous firm in the newly incorporated company without any need for a separate conveyance." 14. The Supreme Court while considering the effect of conversion of partnership firm into a company under Part IX of the Companies Act in Commissioner of Income Tax, Udaipur Versus M/s. Chetak Enterprises Pvt. Ltd., AIR 2020 SC 4305, held that on statutory vesting all properties of the firm, in law, vest in the company and the firm is succeeded by the company. Para 7 of the judgment reads as under:- "7. The question is: what is the effect of conversion of partnership firm into a company under Part IX of the Companies Act? That can be discerned from Section 575 of the Companies Act, which reads thus: "575. Vesting of property on registration. All property, movable and immovable (including actionable claims), belonging to or vested in a company at the date of its registration in pursuance of this Part, shall, on such registration, pass to and vest in the company as incorporated under this Act for all the estate and interest of the company therein." It is manifest that all properties, movable and immovable (including actionable claims) belonging to or vested in a c....