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Issues Involved:
1. Whether remission of stamp duty for registering the document is permissible in the transfer of property between the parent and its subsidiary company. Issue-wise Detailed Analysis: 1. Whether remission of stamp duty for registering the document is permissible in the transfer of property between the parent and its subsidiary company: Arguments by the Petitioner: The petitioner argued that they are exempted from paying the stamp duty based on a notification issued by the State of Tamil Nadu. The petitioner contended that the transfer of property between the parent company and its wholly-owned subsidiary companies should be exempt from stamp duty as per Notification No. 1224. The petitioner's counsel emphasized that the notification allows remission of stamp duty when the transferor holds at least 90% of the issued share capital of the transferee company. The petitioner challenged the demand for stamp duty as illegal and sought to quash the impugned order. Arguments by the Respondent: The respondents argued that the notification is not applicable to the petitioner's transaction. They contended that the transferor company did not hold more than 90% of the issued share capital of the transferee companies, thus making the petitioner ineligible for the stamp duty exemption. The respondents emphasized that the deed of transfer executed by the petitioner did not meet the conditions stipulated in the notification, leading to a significant loss of revenue due to incorrect remission of stamp duty. Court's Analysis: The court examined the relevant facts and the nature of the notification. It noted that the transferor company, M/s. Kothari Industrial Corporation Ltd., transferred its tea estates to its wholly-owned subsidiary companies, M/s. Waterfall Estate (East) (P.) Ltd. and M/s. Waterfall Estate (West) (P.) Ltd. The documents were registered, and the petitioner claimed remission of stamp duty based on the notification. The court analyzed the notification, which states that the remission of stamp duty applies when at least 90% of the issued share capital of the transferee company is in the beneficial ownership of the transferor company. The court emphasized that the notification must be construed strictly as it is a fiscal measure intended to secure revenue for the State. The court referred to various legal principles and precedents, highlighting that the real and true meaning of the instrument must be ascertained to determine the applicability of stamp duty. The court noted that the issued share capital should not be confused with subscribed share capital, and the notification clearly specifies issued share capital as the criterion for exemption. Findings: The court found that the petitioner did not meet the condition of holding at least 90% of the issued share capital of the transferee companies. The Inspector General of Registration, in the impugned order, noted that the transferor company held less than 90% of the issued share capital in both transactions. Therefore, the court concluded that the petitioner was not entitled to stamp duty remission under the notification. Conclusion: The court upheld the impugned order, stating that there was no irregularity or illegality in the decision. The writ petitions were dismissed, and the petitioner was held liable to pay the stamp duty. The court emphasized that the provisions of the Stamp Act and the notification must be interpreted strictly to protect revenue interests, and there was no scope for any interpretation that would favor the petitioner's claim for exemption. The court dismissed the writ petitions with no costs.
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