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TMI Blog2023 (12) TMI 1374X X X X Extracts X X X X X X X X Extracts X X X X ..... an opinion, when after the Collector would become functus officio, there can be no simultaneous invocation of the process provided for under Section 33 of the Act. Consequentially when we read Section 39 of the Stamp Act, which deals with the Collector s power to stamp instruments impounded and impose penalty, for the reasons of holding that the instrument presented for opinion cannot be impounded would also lead us to hold that no penalty under Section 39 thereof can be imposed. The question is therefore answered in the negative. Whether the provisions of Section 17 of the Stamp Act requiring an order of the National Company Law Tribunal to be stamped within 30 days from the date of such order could at all be made applicable in respect of an instrument presented to the Collector under Section 31 of the Stamp Act and whether any proceedings could have been initiated for a purported breach thereof? - HELD THAT:- Section 31 of the Stamp Act deals with Chapter III Adjudication as to Stamps . Under this Section, though for the purpose of seeking an opinion, the limitation of 30 days will not be applicable as the process thereunder is that of giving an opinion or adjudicating on the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin 30 days from the date of such order can be applied when such order/instrument itself permits the applicant to present the order before the Collector within 60 days from the date of the receipt of the order? - HELD THAT:- Since the provisions of Section 17 have been discussed while answering Question B above, what is evident is that the order of the Tribunal as per the provisions of Section 17 has to be stamped within 30 days from the date of the order. It is the contention of the company that as per the relevant clauses of the scheme, which defined the terms appointed date and effective date , it was open for the companies to file the instrument before the stamp authority within 60 days is contrary to the mandate of Section 17 of the Act. Well settled it is that taxing statutes are required to be strictly interpreted especially when the language used by the legislature is plain and unambiguous. In this context, it is well settled that a limitation period provided under a statute cannot be altered and amended or extended. The procedure must be adhered to in the manner prescribed. The term in section 17 is very clear that the Tribunal s order has to be stamped within 30 days fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by relying on the relevant clauses of the scheme to seek an extended period of limitation. The instrument i.e. the Tribunal s order was signed on 18.09.2019 and was presented before the Collector on 13.11.2019 approximately after two months from the date of its execution. Even the certified copy of the order was received on 30.09.2019. This was therefore also not within the time limit of 30 days as per the mandate. The CCRA therefore has not erred in holding that the instruments presented were beyond a period of limitation. The answer to the question is therefore No. Whether the imposition of penalty is not disproportionate, excessive, unreasonable, illegal, and unjust, in the absence of any mens rea on the part of the Applicant which had itself presented the said instrument for seeking opinion of the Collector under Section 31 of the Act and which was within the time stipulated in the order of NCLT Ahmedabad itself? - Whether the CCRA ought not to have set aside the order of the Collector imposing penalty, particularly since the Collector has failed to assign any reasons whatsoever for imposition of the said penalty, and in absence of assignment of reasons by the Collector, wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce between the book value of the assets and the book value of the liabilities transferred on the appointed date as stipulated in clause 8.1 of Part B of the Scheme. The consideration amount was determined as Rs. 4639 crores. 2.2 The National Company Law Tribunal at Ahmedabad (for short the Tribunal ) by an order dated 18.09.2019 sanctioned the scheme. In paragraph 16 of the instrument, the Tribunal directed as follows: 16. The Petitioner Companies are directed to file a copy of this order along with a copy of the Scheme with the concerned Registrar of Companies, electronically, along with INC-28 in addition to physical copy as per relevant provisions of the Act as well as to Stamp Authority, Gujarat within 60 days of the receipt of the order. 2.3 The certified copy of the order was made available by the Registry on 30.09.2019. The copy was filed by the transferor company before the Registrar of Companies on 15.10.2019. According to the transferor company, since a copy of the order could be filed within 60 days of the receipt of the instrument, the transferee company on 13.11.2019 filed an application under Section 31 of the Stamp Act seeking opinion of the Collector as to the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat under Section 54(1A) of the Stamp Act on the questions of law that may arise for consideration. 3. Accordingly, this reference has been made to this Bench and the questions referred to this court for our opinion are as follows: A. Whether the subject instrument being the order of the NCLT Ahmedabad could have been impounded under Section 33 of the Gujarat Stamp Act, 1958 ( Stamp Act ) and consequently subjected to duty and penalty under Section 39 thereof, particularly when the said instrument was presented under Section 31 of the Stamp Act for the purpose of the opinion of the Collector, who would have no jurisdiction to impound the same as held by the Hon ble Supreme Court of India in Government of Uttar Pradesh others v/s Raja Mohammed Amir Ahmad Khan (AIR 1961 SC 787)? B. Whether the provisions of Section 17 of the Stamp Act requiring an order of the National Company Law Tribunal to be stamped within 30 days from the date of such order could at all be made applicable in respect of an instrument presented to the Collector under Section 31 of the Stamp Act and whether any proceedings could have been initiated for a purported breach thereof? C. Whether Section 32(3) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for chargeability of stamp duty on instruments mentioned in Schedule-I of the Stamp Act. He would also refer to Article 20(d) of the Stamp Act. Reference was also made to the relevant definitions under the Act namely Sections 2(g) conveyance , 2(h) duly stamped , 2(i) executed and execution , 2(l) instrument , Section 17 of the Stamp Act which provides for stamping of instruments executed in the State of Gujarat, Sections 31, 32, 33(3), 39 and 40 of the Stamp Act etc. 4.1 Mr. Joshi would make the following submissions with respect of questions of law referred to herein above: A. Whether the subject instrument being the order of the NCLT Ahmedabad could have been impounded under Section 33 of the Gujarat Stamp Act, 1958 ( Stamp Act ) and consequently subjected to duty and penalty under Section 39 thereof, particularly when the said instrument was presented under Section 31 of the Stamp Act for the purpose of the opinion of the Collector, who would have no jurisdiction to impound the same as held by the Hon ble Supreme Court of India in Government of Uttar Pradesh others v/s Raja Mohammed Amir Ahmad Khan (AIR 1961 SC 787)? 1. An application made to the Collector under Section 31 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Law Tribunal to be stamped within 30 days from the date of such order could at all be made applicable in respect of an instrument presented to the Collector under Section 31 of the Stamp Act and whether any proceedings could have been initiated for a purported breach thereof? 1. Section 17 of the Stamp Act has no application to the procedure contemplated under Section 31 of the Stamp Act. 2. Section 17 prescribes time-limit when the concerned party to the instrument seeks to voluntarily stamp the instrument without seeking opinion of the Collector. On the other hand, under Section 31, an applicant may seek opinion of the Collector as to the chargeability of stamp duty on an instrument. Section 31 of the Stamp Act does not prescribe any time limit for seeking opinion/adjudication of the Collector. 3. If the time-limit prescribed under Section 17 of the Stamp Act were to be applied to procedure under Section 31 of the Stamp Act, then the same would result into an inconsistency. E.g. As per Section 17 of the Stamp Act, a lease deed executed in Gujarat will have to be stamped either prior to or at the time of execution or immediately thereafter on the next working day following the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpiry of period of 1 month from the date of its execution. 3. Merely because the Collector may not be empowered to certify an instrument under Section 32 if the same is produced after 1 month of execution, the Collector cannot impound such instrument when they are produced for seeking opinion under Section 31 of the Stamp Act. 4. In the facts of the present case, the Applicant had produced the said instrument before the Collector under Section 31 of the Stamp Act only for seeking an opinion. By not determining the stamp duty chargeable on the said instrument under Section 31 of the Stamp Act and by impounding the said instrument instead, the Collector robbed the Applicant of availing different avenues available to it under the Stamp Act. 5. If the Collector would have acted in accordance with the provisions of the Stamp Act, then the following scenarios may have arisen: Once the Collector would have provided his opinion, it would be upto the Applicant to take necessary further steps viz., make payment of stamp duty and seek certification under Section 32 of the Stamp Act, or make an application to the Collector under Section 40 of the Stamp Act, or not stamp the said instrument at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s own volition for seeking opinion under Section 31 of the Stamp Act and who after making payment of stamp duty in accordance with Collector s opinion, seeks a certificate under Section 32 of the Stamp Act. 7. Even in cases where there is a suppression of market value of property that is the subject matter of an instrument, as per Section 31(3) of the Stamp Act, the Collector would refer the instrument to the Collector of relevant district to determine the true market value of the property as per the procedure laid down in Section 32A of the Stamp Act. In such a situation, as per Section 32A(3) of the Stamp Act, the applicant would be required to make payment of amount of deficit stamp duty and penalty of not more than Rs. 250/-. D. Whether the general time limit prescribed under Section 17 of the Stamp Act providing for stamping of the order of the National Company Law Tribunal within 30 days from the date of such order can be applied when such order/instrument itself permits the applicant to present the order before the Collector within 60 days from the date of the receipt of the order? 1. In the case of an NCLT Order, in view of the very nature of such instrument, if the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on all concerned including relevant statutory authorities. NCLT, being a judicial authority, is deemed to be aware of the provision of Section 17 of the Stamp Act. Inspite of the same and upon considering the time required for relevant events, viz. effectiveness of the Scheme, determination of Appointed Date, valuation of assets as on Appointed Date, computation of consideration amount, etc., NCLT had permitted the Applicant to produce the said instrument before the Collector within 60 days of its receipt. 5. Further, NCLT had given time of 60 days to the Applicant to file its order dated 18.9.2019 before the Registrar of Companies ( ROC ), whereupon the Scheme would become effective. Only once the Scheme becomes effective, the Appointed Date would be determined, and only once the Appointed Date is determined, the consideration amount could have been computed. Looking to Article 20(d) of Schedule-I to the Stamp Act, the Collector could not have computed the stamp duty chargeable on the said instrument, in absence of the determination of consideration amount. 6. A certified copy of the NCLT Order dated 18.9.2019 was received on 30.9.2019, and thereafter the NCLT Order dated 18.9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pite of having paid Rs. 25 crores towards stamp duty. In view of passage of 1 year from date of NCLT Order dated 18.9.2019, it is not even open to the Applicant to apply to the Collector under Section 40. F. Whether the CCRA has erred in rejecting the Applicant s submission that there was no delay in filing of application under Section 31 of the Stamp Act, the same having been filed within 30 days of the Effective Date under the Scheme, especially when the consideration amount payable under the Scheme could not have been computed unless the Scheme was made effective? 1. The Applicant had produced the instrument before the Collector under Section 31 of the Stamp Act within a period of 30 days of the Effective Date of the Scheme. The Applicant reiterates the submissions made in the earlier paragraphs in response to Question D above. G. Whether the imposition of penalty is not disproportionate, excessive, unreasonable, illegal, and unjust, in the absence of any mens rea on the part of the Applicant which had itself presented the said instrument for seeking opinion of the Collector under Section 31 of the Act and which was within the time stipulated in the order of NCLT Ahmedabad itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21. 6. The argument of the Respondent that the quantum of penalty has been calculated on the basis of interest that would have been levied under Section 46 of the Stamp Act, is an afterthought, and the same has been made for the first time during the course of oral arguments before this Court. In his order dated 25.10.2021, the Collector himself has stated that interest would be chargeable if the stamp duty and penalty amount demanded is not paid within 90 days from the date of the said order dated 25.10.2021. This is so because as per Section 46 of the Stamp Act, interest can be levied only in cases where the amount of stamp duty and/or penalty has been crystallized and the Collector has required its payment. Therefore, when the Collector could not have charged interest as per Section 46 of the Stamp Act, it would not be open for the Collector to recover interest in the form of penalty. If the Collector would have been entitled to levy interest, he could have levied the same in addition to penalty. In any case, interest and penalty cannot be equated. 7. Even otherwise, the argument that the quantum of penalty is being determined on the basis of interest amounts to taking advantage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACT, 1958 AND CONSEQUENTLY SUBJECTED TO DUTY AND PENALTY UNDER SECTION 39 THEREOF, PARTICULARLY WHEN THE SAID INSTRUMENT WAS PRESENTED UNDER SECTION 31 OF THE STAMP ACT FOR THE PURPOSE OF THE OPINION OF THE COLLECTOR, WHO WOULD HAVE NO JURISDICTION TO IMPOUND THE SAME AS HELD BY THE HON BLE SUPREME COURT OF INDIA IN GOVERNMENT OF UTTAR PRADESH OTHERS V/S. RAJA MOHAMMED AMIR AHMAD KHAN (AIR 1961 SC 787)? 1) With the decision of the Hon ble Apex Court rendered in case of Government of Uttar Pradesh Ors. Versus Raja Mohammad Amir Ahmad Khand reported in AIR 1961 SC 787, having identified powers under Section 31 of the Act, as having a distinct and an independent domain whilst remaining confined to the administrative exercise of granting an opinion, when after the Collector would become functus officio, there can be no simultaneous invocation of the process provided for under Section 33 of the Act. 2) However, the said decision of the Hon ble Apex Court cannot be read to foreclose the right of respondent authorities for all times to come to invoke consequences which would entail in case of an inadequately stamped and/or not stamped instrument. As a matter of fact, any instrument that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above scheme of Section 17 of the Act, the following deserves to be considered: 4.1 In accordance with the mandate of Section 17 of the Act if an order of the National Company Law Tribunal passed under Section 232 of the Companies Act, 2013 sanctioning a scheme for reconstruction of the company or companies involving merger or the amalgamation of any two or more companies executed in terms of the Act (in accordance with Section 2(g)(iv) read with Section 2(l) and Schedule- I of the Act) is brought before the Collector (a) Under Section 31, in which case, the limitation provided for under section 17 of the Act would have no applicability, since instruments that can be presented under Section 17 of the Act could be stamped/ unstamped and/or executed/unexecuted. (b) not under Section 31 of the Act but in the course of his/her functional dispensation (under the Act) and such instrument is found to be unstamped or inadequately stamped, all consequences relatable to such instrument as provided for under the Act can be invoked. For instance, if an order to obtain a certificate by endorsement under Section 32 of the Act, to an order of NCLT is sought for, and it is found that, the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NG THE SAID INSTRUMENT AND SUBJECTING IT TO IMPOSITION OF PENALTY IS NOT CONTRARY TO THE SCHEME AND PROVISIONS OF THE STAMP ACT AND MORE PARTICULARLY SECTION 40 THEREOF, WHICH VESTS A DISCRETION WITH THE COLLECTOR OF NOT IMPOUNDING SUCH INSTRUMENT EVEN IF PRESENTED BEYOND THE PERIOD OF 30 DAYS BUT BEFORE THE PERIOD OF 1 YEARS FROM THE DATE OF SUCH INSTRUMENT? 1) As per the provision of Section 40 of the Gujarat Stamp Act 1958, a person who has paid deficit stamp duty shall present the Instrument to the Collector within one year from the date of its execution and offer to pay the amount of insufficient stamp duty when the omission to duly stamp such instrument has been occasioned by accident, mistake or urgent necessity. 2) Thus, a consideration of the scheme of the above provision requires the following eventualities to occasion: (a) The person must present an instrument not duly stamped within 1 year from the date of its execution on his/her own volition. (b) The omission to pay the due amount of stamp must be owing to either (i) accident (ii) mistake or (iii) urgent necessity. 3) If the above determinants for the exercise of power under Section 40 of the Act are fulfilled, the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Applicant before the Collector on 13.11.2019 i.e. approximately in about 2 months from the date of its execution. The certified copy of the said order has also been received by the Applicant on 30.09.2019 and therefore, the instrument has not been submitted by the Applicant before the Collector within one month from the date of execution i.e. before 29.10.2019. 6) The necessary corollary to the above events therefore must be to hold that the CCRA has not erred in holding that the instrument presented was beyond the period of limitation. 7) This question referred hereinabove is therefore required to be answered accordingly. G. WHETHER THE IMPOSITION OF PENALTY IS NOT DISPROPORTIONATE, EXCESSIVE, UNREASONABLE, ILLEGAL AND UNJUST IN ABSENCE OF ANY MENSREA ON THE PART OF THE APPLICANT WHICH HAD ITSELF PRESENTED THE SAID INSTRUMENT FOR SEEKING OPINION OF THE COLLECTOR UNDER SECTION 31 OF THE ACT AND WHICH WAS WITHIN THE TIME STIPULATED IN THE ORDER OF NCLT AHMEDABAD ITSELF? 1) Imposition of penalty is a consequence flowing from the invocation of Section 33 followed by the process prescribed under Section 39 of the Act. 2) Determination of the quantum of penalty to be imposed if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Petitioner, has given specific findings on the submissions of the Petitioner and therefore there is no error in the order passed by CCRA. 3) The question referred herein above, may be answered accordingly. 5.1 Ms. Lavkumar, learned Government Pleader in support of her submissions would rely on the following decisions: (a) Hindustan Lever And Another vs. State of Maharashtra And Another [(2004) 9 SCC 438]; (b) Inter State Amalgamation Scheme or Arrangement Between Two Companies : Determination of Payable Stamp Duty [2016 (3) Mh.L.J 436]; (c) State Of Gujarat and Another vs. Saw Pipes Ltd. [2023 SCC OnLine SC 428] 6. Having considered the submissions made by learned counsels for the respective parties, before we answer the questions raised for consideration and opinion of this court, it would be in the fitness of things to reproduce the relevant provisions of the Stamp Act and the chronology of events which are as under: 2(g) Conveyance includes,- (i) a conveyance on sale, (ii) every instrument, (iii) every decree or final order of any civil Court; [(iv) every order made by National Company Law Tribunal under section 232 of the Companies Act, 2013 (18 of 2013) in respect of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very instrument mentioned in Schedule I, which not having been previously executed by or on behalf of or in favour of the Government or any local authority, is executed by or on behalf or in favour of the Government or any local authority] (b) every instrument mentioned in Schedule I, which, not having been previously executed by any person, is executed out of the State on or after the said date, relates to any property situate, or to any matter or thing done or to be done in this State and is received in this State: Provided that no duty shall be chargeable in respect of- (1) any instrument executed by or on behalf of, or in favour of, the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument; (2) any instrument for the sale, transfer or other disposition, either absolutely or by way of mortgage or otherwise of any ship or vessel, or any part, interest, share or property of or in ship or vessel registered under the Bombay Coasting Vessels Act, 1838 (XIX of 1938), or the Indian Registration of Ships Act, 1841 (X of 1941). 17. Instruments executed in State. - All instruments chargeable with duty and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with which the instrument to which it relates is chargeable; and (b) every person by whom any such evidence is furnished shall, on payment of the full duty with which the instrument to which it relates is chargeable, be relived from any penalty which he may have incurred under this Act by reason of the omission to state truly in such instrument any of the facts or circumstances aforesaid. [(3) Where an officer appointed as a Collector under clause (f) of section 2 has reason to believe that the market value of the property, which is the subject matter of the instrument, received by him for adjudication, has not been truly set forth therein, he shall, before assessing the stamp duty under this section, refer the instrument to the Collector of such district in which either the whole or any part of the property is situate, for determining, in accordance with the procedure laid down in section 32A, the true market value of such property and the proper duty payable on the instrument.] 32. Certificate by Collector. - (1) When an instrument brought to the Collector under section 31, is in his opinion, one of a description chargeable with duty, and- (a) the Collector determines that it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898 (V of 1898); (b) in the case of a Judge of High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court may appoint in this behalf. 39. Collector's power to stamp instruments impounded. - (1) When the Collector impounds any instrument under section 33, or receives any instrument send to him under sub-section (2) section 37, not being an instrument chargeable with a duty of twenty naye paise, or less, he shall adopt the following procedure :- (a) if he is of opinion that such instrument is duly stamped or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be; (b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees; or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vesting of the same with the Applicant, the Applicant was to pay to the Transferor Company consideration equal to the carrying value of net assets transferred, calculated as the difference between the book value of Assets and the book value of the Liabilities transferred on the Appointed Date (as defined in the Scheme) as stipulated in Clause 8.1 of Part B of the Scheme. 2. 18.9.2019 National Company Law Tribunal, Ahmedabad Bench, at Ahmedabad ( NCLT Ahmedabad ) passed an order ( said instrument ) sanctioning the Scheme. In paragraph 16 of the said instrument, NCLT Ahmedabad directed as follows: The Petitioner Companies are directed to file a copy of this order along with a copy of the Scheme with the concerned Registrar of Companies, electronically, alongwith INC-28 in addition to physical copy as per relevant provisions of the Act as well as to Stamp Authority, Gujarat within 60 days of the receipt of the order. 3. 30.9.2021 Certified copy of the said instrument was made available by the Registry of NCLT Ahmedabad 4. 15.10.2019 Certified copy of the said instrument was filed by the Applicant/Transferor Company before the Registrar of Companies on 15.10.2019. Therefore, Effective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2021 and requested for fixing hearing on another date. 15. 21.8.2021 Collector issued another notice under Section 39(1)(b) of the Stamp Act, and intimated about the hearing fixed on 20.9.2021. 16. 25.10.2021 Collector passed an order demanding stamp duty of Rs. 25 crores and penalty of Rs. 7,64,40,000/-, without assigning any reasons or basis for the said penalty amount. 17. 10.1.2022 The Applicant made payment of stamp duty of Rs. 25 crores. 18. 19.1.2022 The Applicant filed an application under Section 53(1) of the Stamp Act before the CCRA, challenging the Collector s order dated 25.10.2021. 19. 24.6.2022 Following the hearing before CCRA on 16.6.2022, the Applicant filed written submissions. 20. 28.11.2022 CCRA passed the impugned order, confirming the Collector s demand of penalty of Rs. 7,64,40,000/-. Although no reasons for imposing the said penalty amount were assigned by the Collector, the CCRA observed that the said amount of penalty was justified in view of the lapse of time between the date of instrument and actual date of payment. 21. 20.1.2023 The Applicant filed an application under Section 54(1A) of the Stamp Act before the CCRA seeking reference of the matter to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not less than eight annas) as the Collector may in each case direct, the Collector shall determine the duty (if any) with which, in his judgment, the instrument is chargeable. It is admitted that the document in dispute was submitted to the Collector for his opinion under a. 31 and the opinion of the Collector was sought as to what the duty should be. Under s. 32 of the Act when such an instrument is brought to the Collector, under a. 31 and he determines that it was already fully stamped or he determines the duty which is payable on such a document and that duty is paid, the Collector shall certify by endorsement on the instrument presented that full duty with which it is chargeable has been paid and upon such endorsement being made, the instrument shall be deemed to be fully stamped or not chargeable to duty as the case may be' Under the proviso to s. 32, the Collector is not authorised to make the endorsement if an instrument is brought to him a month after the date of its execution. Then follows s. 33 which is as follows: S. 33 Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and s. 9(12) which defines executed . He then referred to s. 3 which lays down what chargeable means and then to s. 17 which provides that all instruments chargeable with duty and executed by any person in British India shall be stamped before or at the time of the execution. Certain other sections i.e. ss. 35 and 38(1) were also referred to and so also ss. 40(1)(a), 41, 42 and 48 but in our opinion it is not necessary to refer to these sections. What has to be seen is what is the consequence of a person applying to a Collector for his determination as to the proper duty on an instrument. The submission on behalf of the State (appellant) was that if an instrument whether 'stamped or not is submitted for the opinion of the Collector before it is executed, i.e., it is signed, then the Collector is required to give his determination of the duty chargeable and return the document to the person seeking his opinion but if the document is scribed on a stamped paper or unstamped paper and is executed then different consequences follow. In the latter case it was submitted that under s. 33 the Collector is required to impound the document if he finds that it is not duly stamped. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in regard to that matter end. Then follows s. 32. Under that section the Collector has to certify by endorsement on the instrument brought to him under s. 31 that full duty has been paid, if the instrument is duly stamped, or it is unstamped and the duty is made up, or it is not chargeable to duty. Under that section the endorsement can be made only if the instrument is presented within a month of its execution. But what happens when the instrument has been executed more than a month before its being brought before the Collector? Section 31 places no limitation in regard to the time and there is no reason why any time limit should be imposed in regard to seeking of opinion as to the duty payable. (6) Chapter IV of the Act which deals with instruments not duly stamped and which contains as. 33 to 48, provides for impounding of documents, how the impounded documents are to be dealt with, Collector's powers to stamp instruments impounded and how the duties and penalties are to be recovered. It would be an extraordinary position if a person seeking the advice of the Collector and not wanting to rely upon an instrument as evidence of any fact to be proved nor wanting to do any furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that since the order of the Tribunal dated 18.09.2019 was presented under Section 31 to the Collector on 13.11.2019, the application seeking such opinion was time barred. It is the case of the company that the certified copy of the instrument i.e. the order of the Tribunal was delivered on 30.09.2019 and the copy was filed before the Registrar of Companies on 15.10.2019. Recourse was sought to the relevant clauses of the scheme to suggest that in accordance with para 16 of the order it was open for the petitioner companies to file a copy before the stamp authority within 60 days from the receipt of the order. 8.1 The question therefore that is posed for opinion is whether the provisions of Section 17 of the Stamp Act may be made applicable to the order in question in the facts of this case. Section 17 of the Stamp Act begins with the heading (C) Of the Time of Stamping Instruments . Reading Section 17 of the Act which in itself is a stand alone provision indicates that all instruments chargeable with duty and executed by any person shall be stamped before or at the time of the execution or immediately thereafter. In the case of an instrument such as an order of the Tribunal, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Section 17 requiring an order of the Tribunal to be stamped within 30 days is answered in the affirmative and so far as whether any proceedings could have been initiated for a purported breach thereof the answer is in the negative. C. Whether Section 32(3) of the Stamp Act disabling the Collector from endorsing any instrument brought to him after the expiration of one month from the date of its execution can be construed as an enabling provision authorizing the Collector to impound the instrument under Section 33 of the Stamp Act? 9. Section 32(3) of the Stamp Act disables the Collector from endorsing any instrument brought to him after the expiration of one month from the date of its execution. In light of the fact of having answered Question A in the negative holding that a document presented under Section 31 for the opinion of the Collector cannot be impounded under Section 33 of the Stamp Act and having opined that the only fall out for having failed to stamp the instrument within 30 days would be that the Collector will be disabled from endorsing any instrument. The question is answered in the negative inasmuch as there will be no authorization in the Collector in impou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruments executed in the State. This section makes it clear that any instrument chargeable with duty executed in the State is required to be stamped before or at the time of execution or immediately thereafter or on the next working day following the day of execution. Considering all the provisions above, the transferee- respondent no.1 in any event was bound to pay the necessary duty as it stood on the date of execution, i.e., 07/06/2002, the date of passing of Order by this Court. Here it is pertinent to note that the words executed and execution represent signed and signature under the stamp Law. These words, however, do not represent completion of an act, task, things or compliance of any nature, to be done as per contents of the document. Therefore it was obligatory on the part of the Respondent no.1-transferee to approach stamp Authority and pay the stamp duty on execution of Order by this Court. The Respondent no.1-transferee instead of fulfilling the legal obligation cast on it, paid part of the stamp duty in the State of Gujarat on the Order passed by Hon'ble High Court of Gujarat which was passed couple of months after the order passed by this Court. Had the Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies is concerned, section 391 r/w. Section 394 of The Companies Act, 1956, contemplates following steps:- (i) Formation of a Scheme mutually agreed by the Transferor and the Transferee company ; (ii) Holding of meeting for approval of the Scheme ; (iii) The Order of the Court sanctioning the Scheme ; (iv) Filing of a Certified copy of the Order sanctioning the Scheme with the Registrar of Companies for registration ; The transfer of any property or any interest in any property on account of such amalgamation, takes place pursuant to the Order passed by the Court sanctioning the Scheme of amalgamation. This aspect is clear in view of sub-section 2 of section 394 of the Companies Act, which specifically states that, by virtue of an Order issued under Section 394(1), the property of the Transferor Company gets transferred to and vests in the Transferee company. Thus, the instrument, which effects transfer, is the Order of the Court issued under Section 394(1) that sanctions the Scheme and not the Scheme of amalgamation itself. The incident of transfer is the second stage referred to in the aforesaid paragraph and not the first stage, as such. 23. Therefore, the contentions of the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of this Court is the 'order made by the High Court under Section 394 of the Companies Act 1956.............. as contemplated by Section 2(g) (iv) of the said Act. For the same reason the order dated 7.6.2002 of this Court is the 'instrument', as contemplated by the provisions of the said Act. However, it may also be mentioned that this court in its order dated 7th June, 2002 has further ordered as under :- AND THIS COURT DOTH FURTHER ORDER that the petitioner company do within 30 days of the sealing of this order, cause a certified copy of this order to be delivered to the Registrar of Companies, Maharashtra, Mumbai for registration And upon such certified copy of order being so delivered to the Registrar of Companies, Maharashtra, Mumbai And upon receipt of the oder sanctioning the Scheme of Amalgamation by the High Court of Gujarat at Ahmedabad and upon receipt of the files and documents in respect of Transferor Company from the Registrar of Companies, Gujarat, the Registrar of Companies, Maharashtra, Mumbai shall place and register with him on the files and documents kept by him in relation to the petitioner company and shall consolidate the files of the Transferor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e having been filed within 30 days of the Effective Date under the Scheme, especially when the consideration amount payable under the Scheme could not have been computed unless the Scheme was made effective? 12. We have while answering question D opined that under the scheme of the Act though there may be no limitation prescribed for filing an application for presenting a document for adjudication or opinion, Section 17 mandates that the assessee has to present an instrument executed within the State within 30 days from the date of the order. 12.1 There was therefore no question of interpreting the provision otherwise as suggested by the company by relying on the relevant clauses of the scheme to seek an extended period of limitation. The instrument i.e. the Tribunal s order was signed on 18.09.2019 and was presented before the Collector on 13.11.2019 approximately after two months from the date of its execution. Even the certified copy of the order was received on 30.09.2019. This was therefore also not within the time limit of 30 days as per the mandate. The CCRA therefore has not erred in holding that the instruments presented were beyond a period of limitation. The answer to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the Company in failing to register the Company as a dealer acted in the honest and genuine belief that the Company was not a dealer. Granting that they erred, no case for imposing penalty was made out. 13.1 In the case of Trustees of H.C. Dhandha Trust (supra), the Apex Court has observed as under: 12. Only question to be determined in these appeals is as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n amount not exceeding ten times. The expression an amount not exceeding ten times is preceded by expression if he thinks fit . The statutory scheme, thus, vest the discretion to the Collector to impose the penalty amount not exceeding ten times. Whenever statute transfers discretion to an authority the discretion is to be exercised in furtherance of objects of the enactment. The discretion is to be exercised not on whims or fancies rather the discretion is to be exercised on rational basis in a fair manner. The amount of penalty not exceeding ten times is not an amount to be imposed as a matter of force. Neither imposition of penalty of ten times under Section 40(1) (b) is automatic nor can be mechanically imposed. The concept of imposition of penalty of ten times of a sum equal to ten times of the proper duty or deficiency thereof has occurred in other provisions of the Act as well. 20. The legislative intent which is clear from reading of Sections 33,35,38 and 39 indicates that with respect to the instrument not duly stamped, ten times penalty is not always retained and power can be exercised under Section 39 to reduce penalty in regard to that there is a statutory discretion in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppressive manner. The responsibility to exercise the discretion in reasonable manner lies more in cases where discretion vested by the statute is unfettered. Imposition of the extreme penalty i.e. ten times of the duty or deficient portion thereof cannot be based on the mere factum of evasion of duty. The reason such as fraud or deceit in order to deprive the Revenue or undue enrichment are relevant factors to arrive at a decision as to what should be the extent of penalty under Section 40(1)(b). 23. We may refer to judgment of this Court in Peteti Subba Rao vs. Anumala S. Narendra, 2002 (10) SCC 427. This Court had occasion to consider in the above case provisions of Section 40 of the Indian Stamp Act, 1899. Referring to Section 40 this Court made following observation in paragraph 6: 6 The Collector has the power to require the person concerned to pay the proper duty together with a penalty amount which the Collector has to fix in consideration of all aspects involved. The restriction imposed on the Collector in imposing the penalty amount is that under no circumstances the penalty amount shall go beyond ten times the duty or the deficient portion thereof. That is the farthest li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for stamping of the order of the National Company Law Tribunal within 30 days from the date of such order can be applied when such order/instrument itself permits the applicant to present the order before the Collector within 60 days from the date of the receipt of the order? YES E Whether the action of impounding the said instrument and subjecting it to imposition of penalty is not contrary to the scheme and provisions of the Stamp Act and more particularly thereof, which vests a discretion with the Collector of not impounding such instrument even if presented beyond the period of 30 days but before the period of 1 year from the date of such instrument? Section 40 NO F Whether the CCRA has erred in rejecting the Applicant s submission that there was no delay in filing of application under Section 31 of the Stamp Act, the same having been filed within 30 days of the Effective Date under the Scheme, especially when the consideration amount payable under the Scheme could not have been computed unless the Scheme was made effective? NO G Whether the imposition of penalty is not disproportionate, excessive, unreasonable, illegal, and unjust, in the absence of any mens rea on the part o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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