TaxTMI 
TaxTMI 
2026 (2) TMI 1112
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....nai (for short 'NLCT, Chennai') order was lodged for adjudication in Chennai and stamp duty has been accordingly paid in Chennai and the findings of this Court on the said submissions. 3. This Court in earlier round of litigation had supported its findings by taking into consideration that the adjudicating authorities in Maharashtra cannot assess the stamp duty leviable on the NCLT, Chennai order as necessary stamp duty on the sanctioned order of NCLT Chennai Bench had already been paid. Though Mr. Sakhardande would submit that the said paragraphs are severable from the rest of the judgment, after hearing Mr. Sakhardande and learned AGP, this Court thought it fit to recall the order of 20th January, 2026 and hear the matter afresh. Accordingly, the order of 20th January, 2026 was recalled and matter was heard afresh. FACTUAL MATRIX: 4. Briefly stated the facts of the case are that by the impugned orders dated 12th September, 2022 and 25th March, 2019, the Respondent Nos 1 and 2 had assessed the stamp duty of Rs. 50,00,000/- on the instrument lodged for adjudication, which was the order of National Company Law Tribunal, Mumbai Bench (for short "NCLT, Mumbai") dated 8th Octo....
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....t Section 3 of the Stamp Act, 1958 contemplates payment of stamp duty on instrument and not the underlying transaction, which instrument in the present case is the order of NCLT Mumbai and not the scheme of amalgamation. He submits that the order of NCLT, Mumbai sanctioned one composite scheme of amalgamation and while doing so observed about the consideration payable to the share holders of both the transferor companies. He submits that the assessment of stamp duty on two underlying transactions of amalgamation would amount to the scheme of amalgamation being charged with stamp duty and not the instrument. 8. He submits that the issue is no longer res integra and stands decided in Chief Controlling Revenue Authority, Pune And Another vs Reliance Industries Limited, Mumbai And Another 2016 SCC Onl Bom 1428. He submits that the decision holds that the scheme of Stamp Act, 1958 is based on chargeability of instrument and not on transactions and it is immaterial whether it is pertaining to one and same transaction. He submits that applying the principle of law laid down in the said decision to the present case, it is immaterial whether the order of NCLT, Mumbai pertains to one tran....
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.... the implementation of the scheme is in Maharashtra, it would give jurisdiction to the Maharashtra stmap authorities to levy stamp duty on NCLT, Chennai order. 11. In rejoinder, Mr. Sakhardande would submit that Section 232 of the Companies Act, 2013 permits amalgamation of multiple companies and Mumbai authorities would not have jurisdiction to assess stamp duty on NCLT, Chennai order. REASONS AND ANALYSIS: 12. The core issue which arises for consideration is as regards applicability of Section 5 of the Stamp Act, 1958 to the order of NCLT sanctioning the scheme of amalgamation under the statutory provisions of Section 230 to 232 of the Companies Act, 2013. Section 232 of the Companies Act, 2013 governs the merger and amalgamation of company and permits compromise or arrangement which would involve merger or amalgamation of any two or more companies. 13. Section 2(g)(iv) of Stamp Act, 1958 provides that the order of NCLT passed under Section 230 to 234 of the Companies Act, 2013 is conveyance by which property is transferred. Section 3 of the Stamp Act,1958 specifies the instruments chargeable with the amount of duty indicated in Schedule I. Section 2(l) defines instru....
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....India which was situated within the jurisdiction of NCLT, Chennai Bench, there were two petitions filed seeking sanction: one with NCLT, Mumbai which had jurisdiction over INA Bearings and the Petitioner Company and the other application was filed with NCLT, Chennai having jurisdiction over LuK India. The sanction was sought from NCLT, Mumbai and Chennai Bench to the same composite scheme. NCLT, Mumbai noted that similar application was filed with NCLT, Chennai in respect of LuK India which has been sanctioned on 13th June, 2018. NCLT, Mumbai Bench considered the arrangement proposed by the scheme and opined that the scheme of merger by absorption appears to be fair and reasonable. In clause (a) of paragraph 9 of order dated 8th October, 2018, NCLT, Mumbai directed that all assets and liabilities of the 1st Transferor Company i.e. INA Bearing shall be transferred to and become the liabilities and duties of the transferee company. In clause (c) of paragraph 9, NCLT, Mumbai ordered issuance of shares in the transferee company to the share holders of INA Bearings and LuK India. The order of NCLT, Chennai Bench dated 13th June, 2018 notes that under the proposed scheme, the Petition....
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.... Act is based on chargeability on instrument and not on transactions, it is immaterial whether it is pertaining to one and the same transaction. The duty is attracted on the instrument and not on transaction. 31. Therefore the contentions of the respondents that the Scheme of Amalgamation would be an instrument within the meaning of Section 2(l) of ths aid Act id 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." 20. The Hon'ble Full Bench was considering an identical fact situation as the rebate was sought on the ground that the order of Gujarat High Court is to be construed as instrument brought in this State. The Hon'ble High Court negated the contention and held that even if there are two o....
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....ch for ascertaining whether the same was fair and reasonable. In that context, the consideration in respect of the share holders of the second transferrer company i.e LuK India was noted. A similar exercise was carried out by NCLT, Chennai which also noted the consideration of issuance of shares to share holders of LuK India by the Petitioner Company. The observations of NCLT, Mumbai as regards the consideration in respect of amalgamation of LuK India does not constitute a distinct transaction within the meaning of Section 5 of the Stamp Act, 1958 or amounts to bringing the order of NCLT, Chennai in this State. 25. In Ambuja Cements Limited vs Chief Controlling Revenue Authority (supra), the Gujarat High Court was considering the stamp references made by the Chief Controlling Revenue Authority of Gujarat State in respect of stamp duty payable on scheme of amalgamation. One of questions considered was as under: "46. Assuming that an order of the High Court under Section 232 of Companies Act, 1956 sanctioning a single composite scheme of arrangement, albeit between multiple companies, is an instrument comprising or relating to several distinct matters or distinct transact....