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2022 (12) TMI 826 - HC - Companies LawLevy of stamp duty - Amalgamation of the company - whether the petitioner company pursuant to order of amalgamation passed by Bombay High Court permitting it to change its name from M/s Inox Air Products Ltd. to M/s Inox Air Products Private Ltd. is liable to pay stamp duty on account of sale purchase transfer if any of the premises owned/possessed by company having amalgamated into another company in view of specific law laid by Division Bench of this Court in JSTI TRANSFORMERS PVT. LTD VERSUS THE STATE OF HIMACHAL PRADESH THROUGH ITS PRINCIPAL SECRETARY-CUM-FINANCIAL CONTROLLER (REVENUE) GOVERNMENT OF HIMACHAL PRADESH GOVERNMENT SECRETARIAT SHIMLA DEPUTY COMMISSIONER SOLAN DISTRICT HIMACHAL PARDESH 2022 (4) TMI 1480 - HIMACHAL PARDESH HIGH COURT ? HELD THAT - In the instant case it is not the case of the respondents that while effecting change in the name of the company sale/purchase if any of the property took place inter se two entities as detailed rather Certificate of Incorporation issued by Registrar of Companies in the name of M/s Inox Air Products Private Limited clearly reveals that there is only change of the name in terms of Ss.21 and 23 of Companies Act. Since no new entity if any has come into existence on account of proposed change in the name of company coupled with the fact that there is no document available on record if any to show that sale-purchase of properties took place between two entities as noticed above action of the respondents demanding stamp duty appears to be highly unjust and unreasonable. While placing reliance on various judgments passed by this Court as well as other Constitutional Courts the Division Bench has categorically held in the judgment supra that upon conversion of a registered partnership firm to an LLP under the provisions of the Limited Liability Partnership Act all movable and immovable properties of erstwhile registered partnership firm automatically vest in the converted LLP by operation of Section 58(4) (b) of the Limited Liability Partnership Act. The Co-ordinate Bench of this Court in Sozin Flora Pharma LLP Vs. State of Himachal Pradesh and another which otherwise has been taken note in JSTI Transformer Pvt. Ltd while dealing with similar facts and circumstances where partnership Firm became a private limited liability partnership categorically held that the stamp duty /registration fee cannot be levied upon conversion of partnership firm to a limited liability partnership firm. If it is so no permission if any under Section 118 of H.P. Tenancy and Land Reforms Act 1972 is required for change of name in the revenue documents from M/s Inox Air Products Ltd. to M/s Inox Air Products Private Ltd. Respondents are directed to consider the request of the petitioner-company to effect change of name of petitioner company as M/s Inox Air Products Private Limited without insisting upon payment of stamp duty - Petition disposed off.
Issues Involved:
1. Change of company name from "Inox Air Products Ltd." to "Inox Air Products Private Limited." 2. Requirement of stamp duty for the name change. 3. Interpretation of Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act. 4. Applicability of instructions dated 16.02.2012 from the Department of Revenue, Government of Himachal Pradesh. 5. Legal precedents regarding statutory vesting of property and name changes in companies. Issue-wise Detailed Analysis: 1. Change of company name from "Inox Air Products Ltd." to "Inox Air Products Private Limited": The petitioner company, originally known as M/s Superior Air Products Limited, was granted permission under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act in 1994. The company underwent several changes, including an amalgamation with Inox Air Products Limited in 2002, and subsequently changed its name to "Inox Air Products Private Limited" with approval from the Central Government and a new Certificate of Incorporation issued on 11.04.2015. 2. Requirement of stamp duty for the name change: The petitioner requested the respondents to update the revenue records to reflect the new name. However, this request was denied on the grounds that the change constituted a transfer of property, which would attract stamp duty under Section 118 of the Act and the Stamp Act, 1899. The petitioner contended that the change was merely a name change with no sale or transfer of property involved, thus not requiring stamp duty. 3. Interpretation of Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act: The respondents argued that the change in the company's name was akin to a transfer of property, necessitating compliance with Section 118 of the Act. However, the petitioner maintained that there was no actual transfer of ownership or management, only a name change approved by the Registrar of Companies. 4. Applicability of instructions dated 16.02.2012 from the Department of Revenue, Government of Himachal Pradesh: The instructions clarified that no stamp duty is chargeable when a company's name is changed with the approval of the Registrar of Companies without any transaction or sale of property. The petitioner's case fell under this category, as there was no sale or purchase of property, only a change in the company's name. 5. Legal precedents regarding statutory vesting of property and name changes in companies: The court referred to several legal precedents, including judgments from the Division Bench of the Himachal Pradesh High Court and other Constitutional Courts, which established that statutory vesting of property in a new entity due to a name change does not constitute a transfer requiring stamp duty. Specifically, the court cited cases such as JSTI Transformers Pvt. Ltd. vs. State of Himachal Pradesh, Reckitt Benckiser (India) Private Limited, and M/s Sozin Flora Pharma LLP, which supported the petitioner's position that no stamp duty was required for the name change. Conclusion: The court found merit in the petitioner's arguments and held that the change of name from "Inox Air Products Ltd." to "Inox Air Products Private Limited" did not constitute a transfer of property requiring stamp duty. The impugned order dated 13.01.2016 was quashed, and the respondents were directed to update the revenue records to reflect the new name without insisting on stamp duty payment. The court emphasized that the petitioner had been embroiled in litigation since 2016 and urged the respondents to comply with the order expeditiously within four weeks. The petition was disposed of along with any pending applications.
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