TaxTMI 
TaxTMI 
2023 (9) TMI 529
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....g therein for following main reliefs: "(a) Issue a writ of certiorari or any other appropriate writ, order or direction in the nature of certiorari for quashing and setting aside the Conditions 1 and 2 of Impugned Approval letter No. Rev.B.F.(10)-87/2019 dated 28.03.2019 (Annexure P-2) issued by the Respondent No.2, in relation to the Subject Property i.e. land admeasuring 58 Bigha and 2 Biswas having Khewat/Khatauni No. 317/336 situated in Mohal Malkumajra, Tehsil Baddi, District Solan, State of Himachal Pradesh, as being illegal, arbitrary, unreasonable and ultra vires the provisions of the H.P. Tenancy and Land Reforms Act, 1972, the H.P. Tenancy and Land Reforms Rules, 1975, the Companies Act, 2013 (and Companies Act, 1956), The Indian Stamp Act, 1899 and the Registration Act 1908, (b) Issue a writ of mandamus or any other appropriate writ, order or direction in the nature of mandamus directing the Respondent No.2 to 4 to change the company name in the revenue /Land Records pertaining to the Subject Property from "Maharaja Whiteline Industries Limited" to "Maharaja Whitline Industries Private Limited" and thereafter to "Groupe SEB India Private Limited", as re....
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....from original shareholders of petitioner No.1. 6. On account of aforesaid developments, name of MWIPL came to be changed in the record of Registrar of Companies New Delhi as GSIPL on 28.10.2014, as is evident from Certificate of Incorporation (Annexure P-8). Subsequent to change in the name, as detailed herein above, GSIPL applied for renewal of business licences and for change in its name to be recorded in various records. Various Government concerns such as Employees State Insurance Corporation, Employees Provident Fund Organisation, Departmental of Factories, fire Department, Contract Labour Registration etc. granted renewal of the business licences and recorded the change in the name of petitioner No.1 from MWIPL to GSIPL in their records. However, District Industry Centre, Baddi, called upon the petitioner No.1 to furnish a revised Entrepreneur Memorandum-I (EM-II). 7. Deputy Director of Industries, Department of Industries issued letter dated 31.8.2015 enabling petitioner No.1 to obtain various clearances /permissions from concerned departments. It was intimated vide said letter that name of MWIPL has been changed to GSIPL provisionally by the Department of Industries. ....
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....ed senior counsel duly assisted by Mr. Aman Sood, Advocate, representing the petitioners, vehemently argued that at no point of time, transfer of subject property occurred on account of change in the name of petitioner No.1 from MWIL to MWIPL and thereafter to GSIPL in Register of Companies maintained by Registrar of Companies, as such, neither stamp duty nor registration fee is payable on change of name in revenue record qua the subject property. He further submitted that respondents Nos.1 and 2 have failed to appreciate that change in the name of petitioner No.1 (now known as GSIPL) alongwith issue of Certificate of Incorporation is pursuant to S.13 to Companies Act, 2013 (pari-materia to Ss. 21 and 23 of the Companies Act, 1956) or under S.31 of Companies Act, 1956) or under S.31 of the Companies Act, 1956. He further stated that Certificate of Incorporation for change of name has been issued under Rule 29 of the Companies (Incorporation) Rules, 2014, which provides for "alteration of Memorandum by change of name" of a company. He further stated that Certificate of Incorporation upon change in name of a company issued by Registrar of Companies under the Companies Act, 2013 (or t....
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....by change of name requires submission of application/information in Form-INC-24 along with the fee for change in the name of the company and a new certificate of incorporation in Form No.INC.25 shall be issued to the company consequent upon change of name. He submitted that Certificate of Incorporation issued pursuant to change of name does not imply that no stamp duty and registration fee is chargeable. He submitted that after exit of minority shareholders, logo of erstwhile company MWIL and MWIPL have been changed to GSIPL, as such, while granting approval for change of name in revenue record, they have been rightly imposed condition of payment of stamp duty and registration fee. 13. Having heard learned counsel for the parties, this court finds that precisely, the question which needs determination in the case at hand is that 'whether the change of name of a company with the approval of Registrar of Companies, would amount to transfer of assets of the company attracting imposition of stamp duty and registration fee?' 14. Reply filed by the respondents, if read in its entirety, clearly suggests that the facts as have been noted herein above, are not in dispute, rather, stan....
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....956 that on transfer of property on sanction of scheme of amalgamation under Section 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 ....
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....es and called upon the petitioner to remit the said amount to the Corporation within 30 days, so that the 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, h....
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....r vis-avis the company was explained in the case of Chiranjitlal Chowdhuri v. The Union of India and Others [1950] S.C.R. 869, 904.). That 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 i....
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.... transferred by the promoter shareholder in favour of the stranger purchaser. As such, by following the aforesaid decision of the Hon'ble Supreme Court 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 par....
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....alagarh, District Solan, Himachal Pradesh together with the factory building measuring 46000 square feet vide sale deed dated 24.2.2006. The respondent-State approved 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....
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.... capital asset, two important ingredients are : existence of a party and a counterparty and, secondly, incoming consideration qua the transferor. In our view, when a Firm is treated 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 no....
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....ld that if the constitution of the partnership firm is changed into that of a company by registering it under Part 9 of present Act (Part 8 of previous Act), there shall be statutory vesting of title of all the 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 ....
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....y changes. Such conversion or change in the name does not amount to change in the constitution of partnership firm. 5(e). Stamp duty and registration fee cannot be levied upon conversion of a partnership firm to LLP. Therefore, permission under Section 118 of the H.P. Tenancy and Land Reforms Act for recording such change of name in the revenue documents, i.e. M/s Sozin Flora Pharma to M/s Sozin Flora Pharma LLP cannot be made dependent upon deposit of stamp duty and registration fee. For the foregoing discussion, we allow the instant writ petition. The impugned Annexures P-8, dated 28.08.2017 and P-10 dated 23.08.2019, insofar they direct the petitioner to deposit the stamp duty and registration fee consequent upon change of its name from M/s Sozin Flora Pharma to M/s Sozin Flora Pharma LLP, are quashed and set aside. The respondents are directed to enter the name of the petitioner as 'M/s Sozin Flora Pharma LLP' in the revenue record within a period of four weeks from today." 16. In the case at hand, on 20.9.2011, when name of MWIL was changed to MWIPL in the record of Registrar of Companies on conversion from 'public' to 'private' limited company, total number of sha....
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....e together with a recommendation that the transferee is eligible to carry out the relevant activity. (Annexure P-16, page 158) 22. Undisputedly, in the case at hand, change in the name with the approval of Registrar of Companies came to be effected by Department of Industries, as such, respondents Nos. 1 and 2 had no option but to change the name of petitioner No.1 in the revenue records. Approval for change of name by Registrar of Companies under Ss. 21 and 23 of the 1956 Act corresponding to S.13 of the 2013 Act does not mean transaction or sale as such no stamp duty is chargeable. In the instant case, respondents Nos. 1 and 2 have failed to appreciate that change in name with approval of Registrar of Companies and issuance of Certificate of Incorporation by Registrar of Companies under Companies Act, 2013 does not mean transfer of land under S.118 of the Act. 23. In the aforesaid judgment, as taken note herein above, Division Bench of this Court held that change in revenue record can be carried out without payment of stamp duty and registration fee by applicant/transferee company and as such, this Court has no hesitation to conclude that upon acquisition of entire sharehol....