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TMI Blog2007 (2) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... ing for the respondents is that the notification is not applicable in the case of the petitioner's transaction. Hence, the petitioner cannot claim any exemption under the notification. 6. Thus it is necessary to go into the details of the notification and the nature of notification and its application. 7. Before doing this exercise, the court has to read the relevant facts. Facts: (i)M/s. Kothari Industrial Corporation Ltd., transferred its two tea estates to two of its owned subsidiary companies by name; (1)M/s. Waterfall Estate (East) (P.) Ltd.; (2)M/s. Waterfall Estate (West) (P.) Ltd.; (ii)Both of them are private limited and wholly owned by the petitioner. Two instruments of transfer dated 28-9-2001, and 30-11-2001, under Document Nos. 2558 of 2001 and 2582 of 2001 are executed in favour of the above two private limited companies. The documents were presented before the Sub-Registrar of Annamalai along with the other documents with certified copy of the annual returns, balance-sheet, etc., and claimed the remission of stamp duty relying on the Notification No. 1224 issued by the Government of Tamil Nadu. (iii)In brief the notification says that where the transfer takes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for a consideration amount of Rs. 11 crores and the duty borne by the deed is nil. However, the said sale deed was registered. Then Accountant General's audit noted the incorrect remission of stamp duty was accorded leading to loss of proper stamp duty and it is huge loss of revenue. (iii )The forceful contention of the respondents is that the transferor-company is not holding more than 90 per cent of the issued share capital of the transferee-company. Whereas, under the notification, the transferor-company must hold more than 90 per cent of the issued share capital of the transferee-company. It is stated that the deed in question is not entitled for remission. Parent company is holding 100 per cent in the subscribed and paid up share capital Discussion on point : ( i)Registration.--The law of registration is an important branch of law. The object and purpose of the registration of document is to give information to people regarding legal rights and obligations arising or affecting a particular property, and to, perpetuate document which may afterwards be of legal importance, and also may prevent fraud. Therefore, the object of registering document is to give notice to the wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "9. While considering the provisions of the Indian Stamp Act, it has to be borne in mind that the said Act being a fiscal statute, plain language of the section as per its natural meaning is the true guide. No inferences, analogies or any presumptions can have any place. As the incidence of duty is on the execution of the deed, regard must, therefore, be had only to the terms of the document...." (p. 169) (xi )It is to be borne in mind that this Act with which at present I am concerned is a Act imposing liability for collecting stamp duty. The notification which I am dealing is fiscal in nature. Therefore, it must not only literally construed but must be strictly construed in order to find out whether a liability is fastened or not. The subject is to be taxed or not to be taxed and for that purpose and also that every Act of Parliament or legislation must be read a wording to its natural construction of words. (xii )Justice Rowlatt of England said long time ago, "that in a taxing Act one has to look merely and fairly what is clearly said. There is no room for any intendment. There is no equities about a tax. There is no presumption as to tax. Nothing is to be read in. Nothing is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions and remissions in respect of payment of stamp duty, that the remission will apply only to cases of transfer of properties between two as mentioned in the notification. [Emphasis supplied] (xvii)As the court has already indicated that in a case of fiscal nature true meaning of the statute is to be taken into consideration and there is no scope for any interpretation. (xviii)Shri Sathish Parasaran, learned counsel appearing for the peti-tioner forcefully contended that the notification is to be read for the benefit of the parties and beneficial owner becomes eligible to the rights when the shares get subscribed from out of the issued share capital. Hence, it should be construed that the issued share capital means subscribed share capital. (xix)It is also contended that the issued share capital break up is the amount approved by the shareholders for issue and allotment to the persons subscribing to the said issued capital of the company and it means directors of the company has power to issue and allot shares to the subscribers up to that nominee value of the issued capital and the entire nominal value which is essential requirement to be fulfilled under the notification in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of instrument is to be ascertained to determine whether the stamp duty is to be chargeable and what stamp duty is to be demanded upon instrument. (xxv)The Supreme Court of India in various cases like Madras Refine- ries Ltd. v. Chief Controlling Revenue Authority, Board of Revenue AIR 1977 SC 500, clearly held that in order to determine whether any, and if any what stamp duty is chargeable upon an instrument, the real and true meaning of the instrument is to be ascertained for description of it given in the instrument itself. The Full Bench of the Madras High Court in Chief Controlling Revenue Authority, Board of Revenue v. M. Hamid Sultan AIR 1975 Mad. 161, clearly held that when a question arises whether a document should be chargeable or not, the first thing to be looked into is the document itself in order to determine the character thereof. Therefore, the recitals of the document should not be lost sight and all parts of the document has to be read together and it is a sound canon of construction that all parts of the document are to be read together, no portion can be read disjunctly or in isolation or omitted and the Revenue Authorities cannot ignore recitals and terms ..... 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