TaxTMI 
TaxTMI 
2023 (12) TMI 1374
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....any') and Vodafone Idea Telecom Infrastructure Limited (hereinafter referred to as 'the transferee company') and their respective shareholders and creditors was presented for the transfer of the Fibre Infrastructure Undertaking of the transferor company and vesting of the same with the transferee company. The transferee company was to pay to the transferor company consideration equal to the carrying value of net assets transferred, calculated as the difference between the book value of the assets and the book value of the liabilities transferred on the appointed date as stipulated in clause 8.1 of Part B of the Scheme. The consideration amount was determined as Rs. 4639 crores. 2.2 The National Company Law Tribunal at Ahmedabad (for short 'the Tribunal') by an order dated 18.09.2019 sanctioned the scheme. In paragraph 16 of the instrument, the Tribunal directed as follows: "16. The Petitioner Companies are directed to file a copy of this order along with a copy of the Scheme with the concerned Registrar of Companies, electronically, along with INC-28 in addition to physical copy as per relevant provisions of the Act as well as to Stamp Authority, Gujarat within 60 days ....
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.... 32 of the Stamp Act since full stamp duty had been paid. 2.7 The Chief Controlling Revenue Authority, Gujarat by his order dated 29.11.2022 rejected the application under Section 53(1) of the Stamp Act and upholding the order dated 25.10.2021 passed by the Collector and the Additional Superintendent of the State. Vodafone Idea Telecom Infrastructure Limited requested the Authority by way of an application dated 23.01.2023 to draw up a statement of case and refer the same to High Court of Gujarat under Section 54(1A) of the Stamp Act on the questions of law that may arise for consideration. 3. Accordingly, this reference has been made to this Bench and the questions referred to this court for our opinion are as follows: A. Whether the subject instrument being the order of the NCLT Ahmedabad could have been impounded under Section 33 of the Gujarat Stamp Act, 1958 ('Stamp Act') and consequently subjected to duty and penalty under Section 39 thereof, particularly when the said instrument was presented under Section 31 of the Stamp Act for the purpose of the opinion of the Collector, who would have no jurisdiction to impound the same as held by the Hon'ble Supreme Court....
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....e Collector imposing penalty, particularly since the Collector has failed to assign any reasons whatsoever for imposition of the said penalty, and in absence of assignment of reasons by the Collector, whether the CCRA has not erred in supplanting its own reason to justify the imposition of penalty? 4. Mr. Mihir Joshi, learned Senior Advocate appearing with Mr. Sandeep Singhi and Mr. Shamik Bhatt, learned advocates for Singhi & Company would take the court through the scheme of the provisions of the Stamp Act. He would refer to the provisions of Section 3 which provides for chargeability of stamp duty on 'instruments' mentioned in Schedule-I of the Stamp Act. He would also refer to Article 20(d) of the Stamp Act. Reference was also made to the relevant definitions under the Act namely Sections 2(g) - "conveyance", 2(h) - "duly stamped", 2(i) - "executed" and "execution", 2(l) - "instrument", Section 17 of the Stamp Act which provides for stamping of instruments executed in the State of Gujarat, Sections 31, 32, 33(3), 39 and 40 of the Stamp Act etc. 4.1 Mr. Joshi would make the following submissions with respect of questions of law referred to herein above: A. Whether....
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.... In the facts of the present matter, a conundrum has arisen because the Collector never opined as to the chargeability of stamp duty on the said instrument and never decided the application under Section 31 of the Stamp Act. Instead, at the stage of application under Section 31 of the Stamp Act, the Collector impounded the instrument and thereafter passed an order dated 25.10.2021 under Section 39(1)(b) of the Stamp Act. Prior to the order dated 25.10.2021, the Collector has neither determined nor opined on the stamp duty chargeable on the said instrument. B. Whether the provisions of Section 17 of the Stamp Act requiring an order of the National Company Law Tribunal to be stamped within 30 days from the date of such order could at all be made applicable in respect of an instrument presented to the Collector under Section 31 of the Stamp Act and whether any proceedings could have been initiated for a purported breach thereof? 1. Section 17 of the Stamp Act has no application to the procedure contemplated under Section 31 of the Stamp Act. 2. Section 17 prescribes time-limit when the concerned party to the instrument seeks to voluntarily stamp the instrume....
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.... C. Whether Section 32(3) of the Stamp Act disabling the Collector from endorsing any instrument brought to him after the expiration of one month from the date of its execution can be construed as an enabling provision authorizing the Collector to impound the instrument under Section 33 of the Stamp Act? 1. The CCRA has relied upon the proviso to Section 32(3) of the Stamp Act to uphold the Collector's action of impounding the said instrument produced for opinion under Section 31 of the Stamp Act. 2. However, such findings of the CCRA run contrary to its own stand before this Court that an instrument produced only for seeking opinion under Section 31 of the Stamp Act cannot be impounded by the Collector, irrespective of whether the same is produced before or after expiry of period of 1 month from the date of its execution. 3. Merely because the Collector may not be empowered to certify an instrument under Section 32 if the same is produced after 1 month of execution, the Collector cannot impound such instrument when they are produced for seeking opinion under Section 31 of the Stamp Act. 4. In the facts of the present case, the Applicant had p....
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....ion of the proper duty'. • In the aforesaid circumstances, considering the instrument would have been impounded at the time when the Applicant had sought certificate under Section 32 of the Stamp Act i.e., after making payment of stamp duty as per the Collector's opinion, there would be no scope of requiring payment of 'amount required to make up the proper duty' and even penalty of not more than Rs. 5/- could have been charged since there would be no 'deficient portion of the proper duty'. 6. Thus, charging of penalty upto 10 times of deficient portion of stamp duty would arise only in such cases of impounding of instrument, wherein a party has evaded payment of stamp duty and has sought to produce the instrument in evidence or has sought to rely upon the same before a public officer. It would be exceptionally harsh to charge penalty upto 10 times to an applicant who has produced an instrument on his own volition for seeking opinion under Section 31 of the Stamp Act and who after making payment of stamp duty in accordance with Collector's opinion, seeks a certificate under Section 32 of the Stamp Act. 7. Even in cases where there is a suppression of ....
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.... as 'duly stamped', and thereafter upon request of the applicant, the Collector also certifies such NCLT Order under Section 32 of the Stamp Act. Therefore, even though the time of 30 days as stipulated in Section 17 of the Stamp Act is not strictly adhered to, it does not render the NCLT Order 'not duly stamped'. 3. The judgments relied upon the Respondent to contend that 'limitation period' stipulated in a statute is required to be strictly construed would not apply to Section 17 of the Stamp Act in view of the submissions made above. Moreover, time of 30 days referred to in Section 17 of the Stamp Act is not a 'limitation period', in as much as the same is time for payment of stamp duty by a party voluntarily without seeking opinion of the Collector. 4. In the present facts, the said instrument itself prescribes time of 60 days for producing the instrument before the Collector. The said NCLT order dated 18.9.2019 is not challenged and having attained finality, it is binding on all concerned including relevant statutory authorities. NCLT, being a judicial authority, is deemed to be aware of the provision of Section 17 of the Stamp Act. Inspite of the same and up....
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.... 1. It is reiterated that had the Collector followed the procedure of Section 31 of the Stamp Act, then the complexities that have arisen in the present facts would have been avoided. The Collector did not decide the Applicant's application under Section 31 of the Stamp Act and did not provide his opinion. If the Collector would have provided his opinion under Section 31 of the Stamp Act, instead of illegally impounding the said instrument under Section 33 of the Stamp Act and illegally initiating proceedings under Section 39 of the Stamp Act, it would have been open to the Applicant to apply to the Collector under Section 40 of the Stamp Act and pray for stamping of the instrument in accordance with the said provision. 2. A situation has now arisen that if in view of the admission of the Respondent that the Collector had illegally impounded the said instrument, if this Court were to answer only the first question and set aside the Collector's order dated 25.10.2021, the Applicant will still be left with an unstamped instrument inspite of having paid Rs. 25 crores towards stamp duty. In view of passage of 1 year from date of NCLT Order dated 18.9.2019, it is not even o....
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.... Reliance placed by the Respondent on the judgment of the Hon'ble Supreme Court of India in the case of State Of Gujarat and Another vs. Saw Pipes Ltd. reported in 2023 SCC Online 428, is misconceived. The said judgment has been delivered in the context of Section 45(6) of Gujarat Sales Tax Act, 1969, wherein the imposition of penalty is not discretionary. On the other hand, Section 39(1)(b) provides for imposition of penalty of Rs. 5/-, and imposition of penalty of more than Rs. 5/- upto 10 times of the deficient portion of stamp duty is discretionary. 4. Even as per the Scheme of the provisions of the Stamp Act as narrated above, an application to the Collector under Section 31 reflects bona fide on part of an applicant. As submitted in response to Question C above, it is reiterated that if the procedure as per Section 31 of the Stamp Act had been followed by the Collector, then the question of charging penalty would not have arisen. 5. The Collector has neither disclosed reasons nor the basis for arriving at the figure of Rs. 7,64,40,000/- sought to be charged towards penalty in its order dated 25.10.2021. 6. The argument of the Respondent that the qua....
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....aforesaid submissions, it is submitted that the amount of penalty imposed must be commensurate with the gravity of alleged misconduct. Imposition of penalty of an amount of Rs. 7,64,40,000/- in a case where the Applicant has voluntarily approached the Collector for seeking opinion, while being ready and willing to pay the maximum stamp duty of Rs. 25 crores, albeit after an alleged delay of less than 30 days is disproportionate and excessive. 4.2 Mr. Joshi, learned Senior Advocate, in support of his submissions, would refer to the following decisions: (a) Government of Uttar Pradesh & others vs. Raja Mohammed Amir Ahmad Khan (AIR 1961 SC 787); (b) Trustees of H.C. Dhanda Trust v/s State of Madhya Pradesh [(2020) 9 SCC 510 - para.12, 15-17, 20-24]; (c) Hindustan Steel Limited v/s State of Orissa [1969 (2) SCC 627 - para. 8]. 5. Ms. Manisha Lavkumar, learned Government Pleader assisted by Mr. Siddharth Rami and Mr. Raj Tanna, learned AGPs appearing for the State would make the following submissions on the respective questions raised: A. WHETHER THE SUBJECT INSTRUMENT BEING THE ORDER OF THE NCLT AHMEDABAD COULD HAVE BEEN IMPOUNDED UNDER SECTIO....
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....Section 39 of the Act). 2) Before delving on both these above facets, it shall only be fruitful to consider that Section 17 of the Gujarat Stamp Act, 1958 which provides for stamping of a document and stipulates a requirement that all instruments chargeable with duty and executed by any person in this State shall be stamped before or at the time of execution or immediately thereafter on the next working day following the day of execution. 3) The proviso to this section specifies such limitation applicable to a definite specie of instruments, in so far as it/they relate(s) to an order of, i. The National Company Law Tribunal under Section 232 of the Companies Act, 2013 in respect of a scheme for reconstruction of the company or companies involving merger or the amalgamation of any two or more companies; or ii. Order of the Reserve Bank of India under Section 44A of the Banking Regulation Act, 1949 in respect of amalgamation or dissolution of Banking companies, and prescribes that such specie of instruments, shall be stamped within thirty days from the date of such order of the National Company Law tribunal or, as the case may be, the order of the ....
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.... of the Act, if an instrument is presented as a consequence of the opinion received, such presentation if made of an instrument not duly stamped or inadequately stamped and the said presentation comes within the dispensation of official functions of the Collector, the same may constitute a reason to believe for the Collector, to impound the instrument. 2) This question referred herein above is therefore required to be answered accordingly. D. WHETHER THE GENERAL TIME LIMIT PRESCRIBED UNDER SECTION 17 OF THE STAMP ACT PROVIDING FOR STAMPING OF THE ORDER OF THE NCLT WITHIN 30 DAYS FROM THE DATE OF SUCH ORDER CAN BE APPLIED WHEN SUCH ORDER/INSTRUMENT ITSELF PERMITS THE APPLICANT TO PRESENT THE ORDER BEFORE THE COLLECTOR WITHIN 60 DAYS FROM THE DATE OF THE RECEIPT OF THE ORDER? 1) A time period provided for in an instrument/order passed under the provisions of the Companies Act, 2013, cannot over-ride a statutory provision/limitation prescribed under the Act, 1958. 2) It is well settled law that any limitation provided for under a statute cannot be altered and amended or extend by a Court of law. Limitation for presentation as to determination/valida....
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.... 1) For the purposes of determining stamp, it is the market value of the properties (which are the subject of an instrument) on the date of execution which shall be taken into consideration. Such is the mandate of Section 2 (na) of the Act. 'Execution' is defined under Section 2(i) of the Act, and in the context of an order passed under Section 232 of the Companies Act, 2013, the order as an instrument shall be deemed to be executed on the date when it is passed as per Section 17 of the Act, 1958. To this effect the mandate of law is express and clear. 2) In that light of the mandate of the Act, 1958, there shall be no intervention to the free flow of the consequences of the provisions of the Act on account of what the 'effective date' is as per the instrument or for that matter as per the order of the Company Court. 3) In the present case, the judgment and order dated 18.09.2019 passed by the Hon'ble National Company Law Tribunal, Ahmedabad Bench under Section 230- 232 of the Companies Act 2013, is an instrument which is signed in the State of Gujarat. Thus, the instrument is considered to be executed in the State of Gujarat and signed on 18.09.2019. ....
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....ction 17 of the Gujarat Stamp Act, 1958, orders sanctioning amalgamation of companies under the Companies Act, are required to be stamped within 30 days from the date of the order. Therefore, considering the period from the date of execution of the instrument from which the stamp duty was to be paid, and considering the fact, as per section 39(1) of the Act, the penalty can be levied upto ten times the amount of stamp duty, the imposition of penalty, to the tune of Rs. 7,64,40,000/-, as against the stamp duty of amount of Rs. 25,00,00,000/- in the present case, cannot be termed as disproportionate, excessive, unreasonable, illegal, or unjust. 4) This question referred herein above, would therefore be have to be answered accordingly. H. WHETHER THE CCRA OUGHT NOT TO HAVE SET ASIDE THE ORDER OF COLLECTOR IMPOSING PENALTY, PARTICULARLY SINCE THE COLLECTOR HAS FAILED TO ASSIGN ANY REASONS WHATSOEVER FOR IMPOSITION OF THE SAID PENALTY, AND IN ABSENCE OF ASSIGNMENT OF REASONS BY THE COLLECTOR, WHETHER THE CCRA HAS NOT ERRED IN SUPPLANTING ITS OWN REASON TO JUSTIFY THE IMPOSITION OF PENALTY? 1) In view of the facts of the case, the order passed by the Collector ....
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....Trading Corporation Act, 1959 (Bombay XXVI of 1959) or the Gujarat Ownership Flat Act, 1973 (Gujarat 13 of 1973) as the case may be.] by which property, whether movable or immovable, or any estate or interest in any property is transferred to, or vested in, any other person, inter vivos, and which is not otherwise specifically provided for by Schedule I; Explanation. - For the purposes of this clause, an instrument whereby a co-owner of any property transfers his interest to another co-owner of the property and which is not an instrument of partition shall be deemed to be an instrument by which property is transferred inter vivos',] 2(h)"duly stamped" as applied to an instrument means that the instrument bears an adhesive or impressed stamp of not less than the proper amount and that such stamp has been affixed or used in accordance with the law for the time being in force in the State; 2(i) "executed" and "execution" used with reference to instruments means "signed" and "signature"; 2(l) "instrument" includes every document by which any right or liability is or purports to be created transferred limited extended extinguished or reco....
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....s with the requisite amount of stamp duty, within two months from the date of its execution. [Provided further that the instrument, so far as it relates to an order of-, (i) the National Company Law Tribunal under section 232 of the Companies Act, 2013 (18 of 2013) in respect of a scheme for reconstruction of the company or companies involving merger or the amalgamation of any two or more companies; (ii) the Reserve Bank of India under Section 44A of the Banking Regulation Act, 1949 (10 of 1949) in respect of amalgamation or dissolution of Banking companies, shall be stamped within thirty days from the date of such order of the National Company Law tribunal or, as the case may be, the order of the Reserve Bank of India.] 31. Adjudication as to proper stamps. - (1) When any instrument, whether executed or not and whether previously stamped or not, is brought to the Collector, and the person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is chargeable, and pays a fee of such amount [not exceeding one hundred rupees and not less than twenty-five rupees] as the Collector may, in each case direct, the Col....
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....uch instrument is, in his opinion, not chargeable with duty, the Collector shall certify in manner aforesaid that such instrument is not so chargeable. (3) Any instrument upon which an endorsement has been made under this section, shall be deemed to be duly stamped or not chargeable with duty, as the case may be; and, if chargeable with duty, shall be receivable in evidence or otherwise, and may be acted upon and registered as if it has been originally duly stamped: Provided that nothing in this section shall authorise the Collector to endorse- (a) any instrument executed or first executed in the State and brought to him after the expiration of one month from the date of its execution or first execution, as the case may be; (b) any instrument executed or first executed out of the State and brought to him after the expiration of three months after it has been first received in this State; or (c) any instrument chargeable with the duty of twenty naye paise or less when brought to him, after the drawing or execution thereof, on paper not duly stamped. 33. Examination and impounding of instruments. - (1) [Subject to the provision of....
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.... if he thinks fit, remit the whole penalty prescribed by this section. (2) Every certificate under clause (a) of sub- section (1) shall, for the purposes of this Act, be conclusive evidence of the matters stated therein. (3) Where an instrument has been send to the Collector under sub-section (2) of section 37 the Collector shall, when he has dealt with it is a provided by this section, return it to the impounding officer. 40. Instruments unduly stamped by accident.. - If any instrument chargeable with duty and not duly stamped, not being an instrument chargeable with a duty of twenty naye paise or less is produced by any person of his own motion before the Collector within one year from the date of its execution or first execution, and such person brings to the notice of the Collector the fact that such instrument is not duly stamped and offers to pay to the Collector the amount of the proper duty, or the amount required to make up the same, and the Collector is satisfied that the omission to duly stamp such instrument has been occasioned by accident, mistake or urgent necessity he may, instead of proceeding under sections 33 and 39, receive such amount ....
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.... 5. 12.11.2019 Chartered Accountant issued a certificate that consideration to be paid to the Transferor Company was Rs. 4,639 crores, calculated as the difference between the book value of Assets and the book value of the Liabilities transferred as on the Appointed Date i.e., 1.10.2019. 6. 13.11.2019 The Applicant filed an application under Section 31 of the Stamp Act before the Collector thereby seeking his opinion as to the proper stamp duty payable on the said instrument. The said application was filed within a period of 30 days from the Effective Date and within a period of 60 days of the receipt of the said instrument. 7. 2019-2021 The Applicant did not receive any communication from the Collector in respect of its application dated 13.11.2019. However, the Collector claims that it had issued notices, purportedly under Section 39(1)(b) of the Stamp Act on 29.1.2020, 12.3.2020, 20.7.2020, 12.10.2020, 21.12.2020, and 8.2.2021. 8. 16.3.2021 Collector issued a notice under Section 39(1)(b) of the Stamp Act, alleging that the instrument has not been stamped within the time limit prescribed under Section 17 of the Stamp Act, and intimated th....
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....the CCRA seeking reference of the matter to this Hon'ble Court. 7. Now, we proceed to answer the questions referred for the opinion of this court: A. Whether the subject instrument being the order of the NCLT Ahmedabad could have been impounded under Section 33 of the Gujarat Stamp Act, 1958 ('Stamp Act') and consequently subjected to duty and penalty under Section 39 thereof, particularly when the said instrument was presented under Section 31 of the Stamp Act for the purpose of the opinion of the Collector, who would have no jurisdiction to impound the same as held by the Hon'ble Supreme Court of India in Government of Uttar Pradesh & others v/s Raja Mohammed Amir Ahmad Khan (AIR 1961 SC 787)? 7.1 It is an admitted fact that the Tribunal order dated 18.09.2019 is a 'conveyance' and therefore an 'instrument' as defined under Sections 2(g) and 2(l) respectively. The Tribunal order dated 18.09.2019 was presented to have an opinion of the Collector under Section 31 of the Stamp Act on 13.11.2019. The application was only for seeking an opinion to determine with which the instrument is chargeable. Section 33 of the Act provides that subject to the provisions of Section ....
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.... of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom an instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped impound the same. (2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him in order t o ascertain whether it is stamped with a stamp of the value and description required by the law in force in British India when such instrument was executed or first executed: Provided that- (a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898; (b) in the case of a Judge of a High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf. (3)....
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....tamped paper and is executed then different consequences follow. In the latter case it was submitted that under s. 33 the Collector is required to impound the document if he finds that it is not duly stamped. On the other hand it was submitted on behalf of the respondent that on his giving his opinion the Collector becomes functus officio and can take no action under s. 33. It is these two rival contentions of the parties that require to be decided in this case. (5) After an inordinately long delay, the Collector determined the amount of duty payable and impounded the document. Power to impound is given in s. 33 of the Act. Under that section any Person who is a Judge or is in-charge of a public office before whom an instrument chargeable with duty is produced or comes in the performance of his functions is required to impound the instrument if it appears to him not to be duly stamped. The question is does this power of impounding arise in the present case?. The instrument in dispute was not produced as a piece of evidence nor for its being acted upon e.g. registration, nor for endorsement as under s. 32 of the Stamp Act but was merely brought before the Collector for seek....
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....ties and penalties are to be recovered. It would be an extraordinary position if a person seeking the advice of the Collector and not wanting to rely upon an instrument as evidence of any fact to be proved nor wanting to do any further act in regard to the instrument so as to effectuate its operation should also be liable to the penalties which unstamped instruments used as above might involve. The scheme of the Act shows that where a person is simply seeking the opinion of the Collector as to the proper duty in regard to an instrument, he approaches him under s. 31. If it is properly stamped and the person executing the document wants to proceed with effectuating the document or using it for the purposes of evidence, he is to make up the duty and under s. 32 the Collector will then make an endorsement and the instrument will be treated as if it was duly stamped from the very beginning. But if he does not want to proceed any further than seeking the determination of the duty payable then no consequence will follow and an executed document is in the same position as an instrument which is unexecuted and unstamped and after the determination of the duty the Collector becomes functus ....
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....a stand alone provision indicates that all instruments 'chargeable' with duty and executed by any person shall be stamped before or at the time of the execution or immediately thereafter. In the case of an instrument such as an order of the Tribunal, as per the proviso to the Section such instrument in respect of a scheme for reconstruction of a company or companies shall be stamped within 30 days from the date of such order of the Tribunal. This therefore clearly indicates that all instruments chargeable with duty before or at the time of execution such as the order of the Tribunal shall be stamped within 30 days from the date of such order. The mandate of the section therefore is clear that an order of the Tribunal has to be stamped within the prescribed time. The submission therefore of the petitioner companies that as per the scheme they had 60 days to present an instrument, cannot be accepted as they cannot be read to overlook the statutory provision. 8.2 Section 31 of the Stamp Act deals with 'Chapter - III Adjudication as to Stamps'. Under this Section, though for the purpose of seeking an opinion, the limitation of 30 days will not be applicable as the process thereunder....
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....nd having opined that the only fall out for having failed to stamp the instrument within 30 days would be that the Collector will be disabled from endorsing any instrument. The question is answered in the negative inasmuch as there will be no authorization in the Collector in impounding such an instrument under Section 33 of the Stamp Act. D. Whether the general time limit prescribed under Section 17 of the Stamp Act providing for stamping of the order of the National Company Law Tribunal within 30 days from the date of such order can be applied when such order/instrument itself permits the applicant to present the order before the Collector within 60 days from the date of the receipt of the order? 10. At the cost of reiteration, since the provisions of Section 17 have been discussed while answering Question B above, what is evident is that the order of the Tribunal as per the provisions of Section 17 has to be stamped within 30 days from the date of the order. It is the contention of the company that as per the relevant clauses of the scheme, which defined the terms 'appointed date' and 'effective date', it was open for the companies to file the instrument before the s....
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....xecution of Order by this Court. The Respondent no.1-transferee instead of fulfilling the legal obligation cast on it, paid part of the stamp duty in the State of Gujarat on the Order passed by Hon'ble High Court of Gujarat which was passed couple of months after the order passed by this Court. Had the Respondent no.1-transferee fulfilled its obligations in Law, the settling of any question of Law would have never arisen. 19. Section 3 of the said Act is a charging section and provides for charging stamp duties. As quoted above, section 2 of the said Act defines the terms "Conveyance" [2(g)], "Executed and Execution" [2(i)], "Instrument" [2(l)] and "Settlement" [2(t)]. It is the settled position in law that in terms of the scheme of the said Act, stamp duty is charged on 'the instrument' and not on 'the transaction' effected by 'the instrument'. 20. The Order dated 7.6.2002 as stated earlier would be the instrument and that was executed in Mumbai, i.e., in Maharashtra. As per section 3 every instrument executed in State of Maharashtra is chargeable to duty. The Order dated 7.6.2002 whereby assets of Respondent no.2 transferor c....
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....y of the Transferor Company gets transferred to and vests in the Transferee company. Thus, the instrument, which effects transfer, is the Order of the Court issued under Section 394(1) that sanctions the Scheme and not the Scheme of amalgamation itself. The incident of transfer is the second stage referred to in the aforesaid paragraph and not the first stage, as such. 23. Therefore, the contentions of the respondents that the Scheme of Amalgamation would be an instrument within the meaning of Section 2(l) of the said Act, is not legally sustainable. The Scheme of Amalgamation by itself cannot and does not result in transferring the property. It is the Order of the Court that sanctions such a Scheme of Amalgamation results in transferring the property and it is therefore, this Order alone would be an 'instrument', as defined by the said Act, on which stamp duty is chargeable. Therefore, the contentions of the respondents that the parties were liable to pay stamp duty on the sanctioned Scheme (read with the two Orders) is not correct and cannot be accepted. 24. The provisions of Section 391 r/w. Section 394 of the Companies Act require obtaining of an Order....
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.... Registrar of Companies, Maharashtra, Mumbai And upon receipt of the oder sanctioning the Scheme of Amalgamation by the High Court of Gujarat at Ahmedabad and upon receipt of the files and documents in respect of Transferor Company from the Registrar of Companies, Gujarat, the Registrar of Companies, Maharashtra, Mumbai shall place and register with him on the files and documents kept by him in relation to the petitioner company and shall consolidate the files of the Transferor Company and the petitioner company accordingly." That part of the order of this court clearly directs the Transferee Company to deliver to the Registrar of Companies, Maharashtra, Mumbai for registration, the certified copy of the order of this court within 30 days of the sealing of the order, without waiting for the Hon'ble Gujarat High Court to pass appropriate order in regard to sanctioning the Scheme. Thus, the implementation of the order of this court was not made dependent upon passing of an appropriate order sanctioning the Scheme by the Hon'ble Gujarat High Court. This is the step contemplated by the provisions of sub- section 3 of section 394 of the Companies Act." 10.1 The answe....
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....ant clauses of the scheme to seek an extended period of limitation. The instrument i.e. the Tribunal's order was signed on 18.09.2019 and was presented before the Collector on 13.11.2019 approximately after two months from the date of its execution. Even the certified copy of the order was received on 30.09.2019. This was therefore also not within the time limit of 30 days as per the mandate. The CCRA therefore has not erred in holding that the instruments presented were beyond a period of limitation. The answer to the question is therefore No. G. Whether the imposition of penalty is not disproportionate, excessive, unreasonable, illegal, and unjust, in the absence of any mens rea on the part of the Applicant which had itself presented the said instrument for seeking opinion of the Collector under Section 31 of the Act and which was within the time stipulated in the order of NCLT Ahmedabad itself? H. Whether the CCRA ought not to have set aside the order of the Collector imposing penalty, particularly since the Collector has failed to assign any reasons whatsoever for imposition of the said penalty, and in absence of assignment of reasons by the Collector, whether....
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....ach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the Company in failing to register the Company as a dealer acted in the honest and genuine belief that the Company was not a dealer. Granting that they erred, no case for imposing penalty was made out." 13.1 In the case of Trustees of H.C. Dhandha Trust (supra), the Apex Court has observed as under: "12. Only question to be determined in these appeals is as to whether the imposition of ten times penalty by the Collector of Stamps under Section 40 of the Indian Stamp Act, 1899 was validly imposed or not. 15. Section 40 of Indian Stamp Act, 1899 provides for Collectors power to stamp instruments impounded. Section 40(1) which is relevant for the present case which is as follows: "40. Collectors power to stamp instruments impounded. - (1) When the Collector impounds any instrument under section 33, or receives any instrument sent to him under section 38, sub-section (2), not being an instrument chargeable with a duty not exceeding ten naye paise only or a bill o....
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.... ten times is not an amount to be imposed as a matter of force. Neither imposition of penalty of ten times under Section 40(1) (b) is automatic nor can be mechanically imposed. The concept of imposition of penalty of ten times of a sum equal to ten times of the proper duty or deficiency thereof has occurred in other provisions of the Act as well. 20. The legislative intent which is clear from reading of Sections 33,35,38 and 39 indicates that with respect to the instrument not duly stamped, ten times penalty is not always retained and power can be exercised under Section 39 to reduce penalty in regard to that there is a statutory discretion in Collector to refund penalty. 21. Section 39(1)(b) of the Indian Stamp Act, 1899 came for consideration before this Court in Gangtappa and another vs. Fakkirappa, 2019(3) SCC 788 (of which one of us Ashok Bhushan, J. was a member). This Court noticed the legislative scheme and held that the legislature has never contemplated that in all cases penalty to the extent of ten times should be ultimately realized. In paragraph 16 following has been laid down by this Court: "16. Deputy Commissioner under Section 38 is empowe....
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....(b). 23. We may refer to judgment of this Court in Peteti Subba Rao vs. Anumala S. Narendra, 2002 (10) SCC 427. This Court had occasion to consider in the above case provisions of Section 40 of the Indian Stamp Act, 1899. Referring to Section 40 this Court made following observation in paragraph 6: "6.........The Collector has the power to require the person concerned to pay the proper duty together with a penalty amount which the Collector has to fix in consideration of all aspects involved. The restriction imposed on the Collector in imposing the penalty amount is that under no circumstances the penalty amount shall go beyond ten times the duty or the deficient portion thereof. That is the farthest limit which meant only in very extreme situations the penalty need be imposed up to that limit. It is unnecessary for us to say that the Collector is not required by law to impose the maximum rate of penalty as a matter of course whenever an impounded document is sent to him. He has to take into account various aspects including the financial position of the person concerned." 24. This Court in the above case categorically held that it is only in the very ext....