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TMI Blog2019 (5) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... sanction granted to the Scheme of Amalgamation. Therefore, stamp duty for a conveyance of an immovable property is not payable by the transferee company. He has submitted that, Article 23A prescribes half per centum of the value of the issued paid up and subscribed share capital of the transferee company as the stamp duty payable by the transferee company. The impugned order is therefore incorrect. He has drawn the attention of the Court to the proviso to Article 23A and submitted that, the main provision cannot be cut down by the proviso. He has relied upon All India Reporter 1963 Supreme Court page 1083 (Hindustan Ideal Insurance Co. Ltd. v. Life Insurance Corporation of India) in support of such contention. Relying upon 2012 Volume 3 Calcutta High Court Notes page 102 (In re: Emami Biotech Limited & Anr.) he has submitted that, stamp duty is payable by the transferee company even in absence of special provision requiring stamp duty to be payable. However, subsequent to the judgments of the Court rendered in 114 Company Cases 1992 (In re: Gemini Silk Ltd.), 130 Company Cases page 510 (Madhu Intra Ltd. v. Registrar of Companies) and 2004 Volume 9 Supreme Court Cases page 438 (Hind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustan Lever (supra). Emami Biotech Limited & Anr. (supra) after noticing Gemini Silk Ltd. (supra), Madhu Intra Ltd. (supra) and Hindustan Lever (supra) has held that, the order sanctioning the scheme of amalgamation is registrable notwithstanding any amendment being made to the Act of 1899. Apparently, the State Legislature introduced Article 23A to the Schedule IA as applicable to the State of West Bengal subsequent to the pronouncements of Gemini Silk Ltd. (supra), Madhu Intra Ltd. (supra) and Hindustan Lever (supra). Article 23A is as follows:- Description of Investments Proper Stamp Duty "23A. Conveyance, in respect of amalgamation, merger, reconstruction, or demerger, of companies, other than amalgamation, merger, reconstruction or demerger, of two banking companies or a banking company with a nonbanking financial company, executed on the basis of decree or final order of any Civil Court or every order made by the Tribunal under section 394 of the Companies Act, 1956 (1 of 1956), as defined by section 2(10), not being a transfer charged or exempted under No. 62, on the market value of the property which is the subject-matter of the conveyance, when the property of the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies can enter into each other. The third type is a combination of the two types noted. Three Companies may enter into a scheme between them whereby and whereunder, the first company may merge with the third company and the second company may demerge one of its units to the third company. Such third type is also exigible to stamp duty. Any order sanctioning a scheme involving transfer of immoveable property was compulsorily registrable even under the unamended provisions of the Act of 1899. The amended Article 23A introduced, recognises and reinforces such obligation. A scheme of amalgamation as well as a scheme of reconstruction is divided into two eventualities. The eventualities are on the basis of the transferor company or companies as the case may be having any immoveable property in the State of West Bengal or not. The two eventualities are for the purpose of calculating the quantum of stamp duty payable. One eventuality is the value of the immoveable property lying in the State of West Bengal and the other is the value of the consideration for the transfer other than the immovable property involved. The transferor company or the sanctioning company is to pay the highest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " used in sub-clause (a) should be read to mean that when, (i) and (ii) of sub-clause (a) are attracted in a fact scenario then, the highest rate of the two prescribed rates would be attracted. For example, where, in a scheme of amalgamation or merger, the transferor company has an immovable property located in the State of West Bengal, then, the two per cent of the true market value of the immovable property and half per cent of the aggregate of the market value of the shares issued or allotted and the amount of consideration paid, have to be considered to find out whichever is higher. In a given case, the true market value of the immovable property of the transferor company located in the State of West Bengal may be Rs. 10 Lakhs only whereas, the aggregate of the market value of the shares issued or allotted, in exchange or otherwise and the amount of consideration paid by the transferor company is, let's say Rs. 100 Crores, then obviously, half per centum of Rs. 100 Crores will be higher than two per centum of Rs. 10 Lakhs. In such a situation, the amount of stamp duty payable would be on the basis of the aggregate of the market value of the shares and the consideration paid and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such an interpretation will render the entirety of Article 23A where it prescribes proper stamp duty as otiose, surplusage and redundant. An interpretation which does not allow such an eventuality to happen should be preferred to that which renders words used in a statute as otiose, surplusage and of no consequence. Hindustan Ideal Insurance Co. Ltd. (supra) has held that, where the impugned provision is clear, it is effect cannot be cut down by the proviso. In the facts of the present case, Article 23A by itself is unambiguous. The quantum of stamp duty payable in the specific scenarios enumerated in Article 23A is not governed by the highest stamp duty payable in respect of Article 23. The authorities have adjudicated the stamp duty payable in respect of the scheme of amalgamation, by the impugned writing dated February 8, 2018, at Rs. 17,65,500/-. The authorities have arrived at a figure, after calculating the value paid by the transferee company to be at Rs. 2,94,25,000/-. The authorities have applied 6 per cent rate on the sum of Rs. 2,94,25,000/- to arrive at the figure of Rs. 17,65,500/-. In view of the discussions above, the rate applicable would be half per cent on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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