1999 (11) TMI 813 - HC - Companies Law

Summary

Issues:
Challenge to orders demanding transfer fees under the Goa, Daman and Diu Excise Duty Act, 1964 due to amalgamation of companies.

Analysis:
1. Transfer of Ownership: The petitioners argue that amalgamation of companies does not constitute transfer of ownership. However, the respondents assert that post-amalgamation, the transferor-company ceases to exist, and assets are merged with the transferee-company, justifying the demand for transfer fees. Legal precedents cited by both parties support their arguments, emphasizing the distinct legal entity of a company from its shareholders.

2. Legality of Transfer Fees: Petitioners challenge the legality of transfer fees under the Act, contending that it does not empower the government to issue such notifications. However, provisions in Section 15 of the Act, along with relevant rules, authorize the imposition of transfer fees for license transfers. Citing the Apex Court's decision in a similar case, the court upholds the government's regulatory powers in levying such fees.

3. Retrospective Application of Notification: The petitioners claim that their application for license transfer was filed before the notification enforcing transfer fees. However, the court rules that the notification, part of a comprehensive excise duty structure, applies to transfers occurring within the financial year, irrespective of the application date. Thus, the petitioners are liable to pay the transfer fees for the relevant financial year.

In conclusion, the court dismisses the petition, finding all grounds of challenge unsubstantiated. The ruling affirms the legality of demanding transfer fees post-company amalgamation, upholding the regulatory authority's power to impose such fees under the Act. The retrospective application of the notification for transfer fees is deemed valid, requiring the petitioners to comply with the prescribed fees for the relevant financial year.