9911796707
TMI Blog2023 (12) TMI 1374X X X X Extracts X X X X X X X X Extracts X X X X ..... re Limited (hereinafter referred to as 'the transferee company') and their respective shareholders and creditors was presented for the transfer of the Fibre Infrastructure Undertaking of the transferor company and vesting of the same with the transferee company. The transferee company 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 The Chief Controlling Revenue Authority, Gujarat by his order dated 29.11.2022 rejected the application under Section 53(1) of the Stamp Act and upholding the order dated 25.10.2021 passed by the Collector and the Additional Superintendent of the State. Vodafone Idea Telecom Infrastructure Limited requested the Authority by way of an application dated 23.01.2023 to draw up a statement of case and refer the same to High Court of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition of the said penalty, and in absence of assignment of reasons by the Collector, whether the CCRA has not erred in supplanting its own reason to justify the imposition of penalty? 4. Mr. Mihir Joshi, learned Senior Advocate appearing with Mr. Sandeep Singhi and Mr. Shamik Bhatt, learned advocates for Singhi & Company would take the court through the scheme of the provisions of the Stamp Act. He would refer to the provisions of Section 3 which provides 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 Stam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided the application under Section 31 of the Stamp Act. Instead, at the stage of application under Section 31 of the Stamp Act, the Collector impounded the instrument and thereafter passed an order dated 25.10.2021 under Section 39(1)(b) of the Stamp Act. Prior to the order dated 25.10.2021, the Collector has neither determined nor opined on the stamp duty chargeable on the said instrument. 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? 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pound the instrument under Section 33 of the Stamp Act? 1. The CCRA has relied upon the proviso to Section 32(3) of the Stamp Act to uphold the Collector's action of impounding the said instrument produced for opinion under Section 31 of the Stamp Act. 2. However, such findings of the CCRA run contrary to its own stand before this Court that an instrument produced only for seeking opinion under Section 31 of the Stamp Act cannot be impounded by the Collector, irrespective of whether the same is produced before or after expiry 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 robbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make up the proper duty' and even penalty of not more than Rs. 5/- could have been charged since there would be no 'deficient portion of the proper duty'. 6. Thus, charging of penalty upto 10 times of deficient portion of stamp duty would arise only in such cases of impounding of instrument, wherein a party has evaded payment of stamp duty and has sought to produce the instrument in evidence or has sought to rely upon the same before a public officer. It would be exceptionally harsh to charge penalty upto 10 times to an applicant who has produced an instrument on his 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od' stipulated in a statute is required to be strictly construed would not apply to Section 17 of the Stamp Act in view of the submissions made above. Moreover, time of 30 days referred to in Section 17 of the Stamp Act is not a 'limitation period', in as much as the same is time for payment of stamp duty by a party voluntarily without seeking opinion of the Collector. 4. In the present facts, the said instrument itself prescribes time of 60 days for producing the instrument before the Collector. The said NCLT order dated 18.9.2019 is not challenged and having attained finality, it is binding 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument under Section 33 of the Stamp Act and illegally initiating proceedings under Section 39 of the Stamp Act, it would have been open to the Applicant to apply to the Collector under Section 40 of the Stamp Act and pray for stamping of the instrument in accordance with the said provision. 2. A situation has now arisen that if in view of the admission of the Respondent that the Collector had illegally impounded the said instrument, if this Court were to answer only the first question and set aside the Collector's order dated 25.10.2021, the Applicant will still be left with an unstamped instrument inspite 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 App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 times of the deficient portion of stamp duty is discretionary. 4. Even as per the Scheme of the provisions of the Stamp Act as narrated above, an application to the Collector under Section 31 reflects bona fide on part of an applicant. As submitted in response to Question C above, it is reiterated that if the procedure as per Section 31 of the Stamp Act had been followed by the Collector, then the question of charging penalty would not have arisen. 5. The Collector has neither disclosed reasons nor the basis for arriving at the figure of Rs. 7,64,40,000/- sought to be charged towards penalty in its order dated 25.10.2021. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following decisions: (a) Government of Uttar Pradesh & others vs. Raja Mohammed Amir Ahmad Khan (AIR 1961 SC 787); (b) Trustees of H.C. Dhanda Trust v/s State of Madhya Pradesh [(2020) 9 SCC 510 - para.12, 15-17, 20-24]; (c) Hindustan Steel Limited v/s State of Orissa [1969 (2) SCC 627 - para. 8]. 5. Ms. Manisha Lavkumar, learned Government Pleader assisted by Mr. Siddharth Rami and Mr. Raj Tanna, learned AGPs appearing for the State would make the following submissions on the respective questions raised: 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 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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. The National Company Law Tribunal under Section 232 of the Companies Act, 2013 in respect of a scheme for reconstruction of the company or companies involving merger or the amalgamation of any two or more companies; or ii. Order of the Reserve Bank of India under Section 44A of the Banking Regulation Act, 1949 in respect of amalgamation or dissolution of Banking companies, and prescribes that such specie of instruments, shall be stamped within thirty days from the date of such order of the National Company Law tribunal or, as the case may be, the order of the Reserve Bank of India. 4) Now considering the two facets (distinguished above in para 1) in the backdrop of the 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER BEFORE THE COLLECTOR WITHIN 60 DAYS FROM THE DATE OF THE RECEIPT OF THE ORDER? 1) A time period provided for in an instrument/order passed under the provisions of the Companies Act, 2013, cannot over-ride a statutory provision/limitation prescribed under the Act, 1958. 2) It is well settled law that any limitation provided for under a statute cannot be altered and amended or extend by a Court of law. Limitation for presentation as to determination/validation of stamps being the mandate of a procedure, must be adhered to and the law shall operate in the manner provided for. 3) This question referred herein above is therefore required to be answered accordingly. 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 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the Company Court. 3) In the present case, the judgment and order dated 18.09.2019 passed by the Hon'ble National Company Law Tribunal, Ahmedabad Bench under Section 230- 232 of the Companies Act 2013, is an instrument which is signed in the State of Gujarat. Thus, the instrument is considered to be executed in the State of Gujarat and signed on 18.09.2019. 4) Section 17 of the Act specifically provides for a period of 30 days for stamping of order of the National Company Law Tribunal. When the statute specifically prescribes period within which the instrument is to be stamped, the applicant company is duty bound to comply with the statutory period of limitation. 5) The instrument signed on 18.09.2019 has been presented 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AILED TO ASSIGN ANY REASONS WHATSOEVER FOR IMPOSITION OF THE SAID PENALTY, AND IN ABSENCE OF ASSIGNMENT OF REASONS BY THE COLLECTOR, WHETHER THE CCRA HAS NOT ERRED IN SUPPLANTING ITS OWN REASON TO JUSTIFY THE IMPOSITION OF PENALTY? 1) In view of the facts of the case, the order passed by the Collector and Additional Superintendent of Stamps, is in consonance with the provisions of law, as the instrument was not duly stamped within the statutory time prescribed under the Act. Therefore, the Petitioner, having not complied with the mandatory requirement of law, the order passed by the Collector and Additional Superintendent of Stamps and confirmed by the CCRA is just and proper and in accordance with law. 2) Further, the CCRA, while considering the submissions 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents means "signed" and "signature"; 2(l) "instrument" includes every document by which any right or liability is or purports to be created transferred limited extended extinguished or recorded but does not include a bill of exchange cheque promissory note bill of lading letter of credit policy of insurance transfer of share debenture proxy and receipt; 3. Instruments chargeable with duty. - Subject to the provisions of this Act and the exemptions contained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated in Schedule I as the proper duty therefore respectively, that is to say- (a) every instruments mentioned in Schedule I, which, not having been previously executed by any person, is executed in the State on or after the date of commencement of this Act; [(aa) every 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dred rupees and not less than twenty-five rupees] as the Collector may, in each case direct, the Collector shall determine the duty (if any) with which in his judgement, the instrument is chargeable. (2) For this purpose the Collector may require to be furnished with an abstract of the instrument, and also with such affidavit or other evidence as he may deem necessary to prove all the facts and circumstances affecting the chargeability of the instrument with duty, or the amount of the duty with which it is chargeable, are fully and truly set forth therein, and may refuse to proceed upon any such application until such abstract and evidence have been furnished accordingly: Provided that- (a) no evidence furnished in pursuance of this section shall be used against any person in any civil proceeding, except in an inquiry as to the duty 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 of police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions shall if it appears to him that such instrument is not duly stamped, impound the same. (2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him in order to ascertain whether it is stamped with a stamp of the value and description required by the law for the time being in force in the State when such instrument was executed or first executed: Provided that- (a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do any instrument 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EYANCE, [so far as it relates to scheme for reconstruction of the company or companies involving merger or the amalgamation of any two or more companies by an order of the National Company Law Tribunal under section 232 of the Companies Act, 2013 (18 of 2013) or for amalgamation or dissolution of Banking Companies by an order of the Reserve Bank of India under Section 44A of the Banking Regulation Act 1949 (10 of 1949)] CHRONOLOGY Sr. No. Date Particulars 1. 2019 A Scheme of Arrangement between Vodafone Idea Limited ('Transferor Company') and the Applicant and their respective shareholders and creditors ('Scheme') was presented, inter alia, for the transfer of the Fiber Infrastructure Undertaking of the Transferor Company and vesting of the same with the Applicant on a going concern basis. In consideration of the transfer of the Fiber Infrastructure Undertaking of the Transferor Company and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the status of the application dated 13.11.2019. 10. 19.4.2021 In view of personal difficulty of Applicant's Advocate, time was sought from the Collector. 11. 3.6.2021 Collector issued another notice under Section 39(1)(b) of the Stamp Act, and intimating about the hearing fixed on 1.7.2021. 12. 1.7.2021 A reply was filed on behalf of the Applicant before the Collector. The Applicant showed its readiness and willingness to pay the stamp duty of Rs. 25 crores, but raised objections in respect of the proposed levy of penalty. However, the Collector was not available on 1.7.2021. 13. 29.7.2021 Collector issued another notice under Section 39(1)(b) of the Stamp Act, and intimating about the hearing fixed on 9.8.2021. The said notice was delivered to the Applicant's Advocates only on 12.8.2021. 14. 13.8.2021 The Applicant's Advocates addressed a letter to the Collector informing that they had received the notice of hearing only on 12.8.2021 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same. In the facts of the present case, the instrument was only presented for an opinion of the Collector as is evident from the letter dated 13.11.2019. 7.2 Perusal of the submissions of the State also indicate that the State concedes to the fact that in light of the decision in the case of Raja Mohammed Amir Ahmad Khan (supra) on an instrument presented for opinion under Section 31 of the Act, there is no power to impound the same. The relevant paragraphs of the decision in the case of Raja Mohammed Amir Ahmad Khan (supra) are as under: "2. The decision of this appeal depends upon the interpretation of ss, 31, 32 and 33 of the Stamp Act. The relevant portion of s. 31 provides:-, S. 31(1) "When any instrument,, whether executed or not and whether previously stamped or not,, is brought to the Collector and. the person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is chargeable, and pays a fee of such amount (not exceeding five rupees and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be put upon the words "before whom any instrument chargeable........................ is produced or comes in the performance of his functions". Dealing with these words the High Court held:- "With all respect, therefore, we agree that the learned Judges deciding Chuni Lal Burman VS. Board Of Revenue, U.P. AIR 1951 All 851, took a correct view of the words " is produced or comes in the performance of his functions" used in Section 33 of the Act to mean "that production of the instrument concerned in evidence or for the purpose of placing reliance upon it by one party or the other." The High Court was also of the opinion that the object of paying the whole stamp duty was to get the instrument admitted into evidence or its being acted upon or registered or authenticated as provided in ss. 32(3), 35, 38(1) and 48(1) of the Stamp Act. (4) Counsel for the State referred to the various sections of the Act; first to the definition section; Section 2(11) which defines what is "duly stamped"; s. 2(14) which defines "instrument" 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 instrume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... function in regard to those instruments when they come before them e.g. registration. They do not extend to the determination of the question as to what the duty payable is. They do not cover the acts which fall within the scope of s. 31, because that section is complete by itself and it ends by saying that the Collector shall determine the duty with which, in his judgment, the instrument is chargeable, if it is chargeable at all. Section 31 does not postulate anything further to be done by the Collector. It was conceded that if the instrument is unexecuted i.e. not signed, and the opinion of the Collector is sought, he has to give his opinion and return it with his opinion to the person seeking his opinion. The language in regard to exe- cuted and unstamped documents is no different and the powers and duties of the Collector in regard to those instruments are the same, that is, when he is asked to give his opinion, he has to determine the duty with which, in his judgment, the instrument is chargeable and there his duties and powers 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. 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. 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? 8. Reading the impugned orders would indicate that the Collector and in turn the Chief Controlling Revenue Authority have held 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. In other words, irrespective of an adjudication or an opinion, an instrument has to be stamped either fully or as perceived by the holder within 30 days in case of an order of the Tribunal and therefore the provisions of Section 17 of the Stamp Act requiring an order to be stamped within 30 days would be applicable to an instrument presented to the Collector under Section 31 of the Act. 8.3 At this stage it may also be relevant to consider the provisions of Section 32(3) of the Stamp Act which suggests that on a failure to get an instrument stamped within 30 days would suggest that there will be no certification. Therefore, the only fall out of breach of Section 17 timeline would be non certification of an instrument. 8.4 The scheme of adjudication is a separate mechanism prescribed under Section 31 and consequences thereof under Sections 32 and 33 of the Stamp Act. For failure to adhere to the timeline no proceedings for breach as impounding can be exercised. The question therefore is answered accordingly i.e. so far as the applicability of provision of Section 17 requiring an order of the Tribunal to be stamped within 30 days is answered in the affirmative and so far as whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r prescribed. The term in section 17 is very clear that the Tribunal's order has to be stamped within 30 days from the date of the order. The Full Bench of the Bombay High Court in the case of Reliance Industries (supra) has unequivocally held that the scheme of arrangement or amalgamation and the order sanctioning the scheme would be an instrument under section 2(l) of the Stamp Act. What is chargeable to duty is the instrument and not the transaction. Relevant paragraphs of the Full Bench decision read as under: "18. Section 3(a) of the Bombay Stamp Act, 1958 provides for chargeability of the instruments covered under Schedule-I appended to the said Act, when first executed in the State. As per section 2(i) the words "executed" and "execution" means signed and signature. In this context the Order of the Hon'ble High Court, Bombay was executed on 07/06/2002. As per section 2(d) an instrument becomes chargeable on execution or first execution after the commencement of the Bombay Stamp Act, 1958. Section 17 of the Bombay Stamp Act, 1958 provides for stamping of the instruments executed in the State. This section makes it clear that any instrument chargeable with duty executed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es provided in Schedule I. As per the Scheme of the Act, the taxable event is the execution of the instrument and not the transactions. If a transaction is not supported by execution of an instrument, there can not be a liability to pay duty. Therefore, essentially the duty is leviable on the instrument and not the transactions. Although the Scheme may be same, the Order dated 7.6.2002 being conveyance and it being an instrument signed in State of Maharashtra, the same is chargeable to duty so far as State of Maharashtra is concerned. 21. Although the two orders of two different high courts are pertaining to same scheme they are independently different instruments and can not be said to be same document especially when the two orders of different high courts are upon two different petitions by two different companies. When the scheme of the said Act is based on chargeability on instrument and not on transactions, it is immaterial whether it is pertaining to one and the same transaction. The duty is attracted on the instrument and not on transaction. 22. As regards the amalgamation of Companies is concerned, section 391 r/w. Section 394 of The Companies Act, 1956, contemplates f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, as a matter of fact, in as much as the present case is concerned, the chronology of events separately submitted by the applicants when considered demonstrates that the first Order sanctioning the Scheme, was issued by this Court on 7th June 2002 and the order states as under :- "AND THIS COURT DOTH ORDER that with effect from the Appointed Date, the Assets/Undertakings of the Transferor Company (as defined in the Scheme of Amalgamation being Exhibit "E" to the petition and in the Schedule hereto) shall without any further act, instrument or deed stand transferred to and vested in or deemed to have been transferred to and vested in the petitioner company pursuant to the provisions of Section 391 to 394 of the Companies Act, 1956 so as to become the properties and assets of the petitioner company." Therefore, the order of this court sanctioning the Scheme was not a conditional order, which was to operate after the scheme was also sanctioned by the Hon'ble Gujarat High Court. By this Order dated 7.6.2002 of this Court itself, it could be considered that the transfer was effected and therefore the said Order of this Court is the 'order made by the High Court under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the date of such instrument? 11. Reading Section 40 of the Act which has also been reproduced in the course of written submissions by the State Government indicates that from the title itself it is applicable to instruments which are unstamped by accident. The circumstances to invoke Section 40 of the Act and get the benefit of the extended period of a year is only available when the omission to duly stamp such instrument has been occasioned by accident, mistake or urgent necessity. Reading the section would indicate that as per the scheme in order to undertake the benefit thereof the instrument not duly stamped must be within one year from the date of its execution and such presentation and omission to pay the duty must be owing to the three circumstances narrated hereinabove. In the facts of the present case, there are no eventualities or circumstances to suggest any of the three ingredients for invoking Section 40. The question therefore is answered in the negative. 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 Effecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a perception of the company as well as the authority and therefore it cannot be inferred that there was an intention to evade payment of stamp duty. Section 39 indicates that it deals with the power of the Collector to stamp instruments impounded. As we have answered Question A holding that instruments presented under Section 31 cannot be impounded, Section 39 cannot also be invoked. The bonafides of the companies was apparent when on the order passed by the Collector it willingly deposited an amount of Rs. 25 crores worked out on a consideration of Rs. 4639 crores. There was no intention to avoid/evade payment. Once having held thus, the penalty clause of Section 39 could not be invoked. In the case of M/s. Hindustan Steel Ltd. (supra), the Hon'ble Apex Court has held as under: "8. Under the Act penalty may be imposed for failure to register as a dealer: s. 9(1) read with s. 25(1)(a) of the Act. But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasicriminal proceeding, and penalty will not ordinarily be imposed unless the party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficient portion thereof, whether such amount exceeds or falls short of five rupees: Provided that, when such instrument has been impounded only because it has been written in contravention of section 13 or section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section." 16. According to Section 40(1)(b) if the Collector is of opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the of the proper duty or the amount required to make up the same, together with a penalty of the five rupees; or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof. The statutory scheme of Section 40(1)(b) as noticed above indicates that when the Collector is satisfied that instrument is not duly stamped, he shall require the payment of proper duty together with a penalty of the five rupees. The relevant part of Section 40(1)(b) which falls for consideration in these appeals is: "or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or deficient portion thereof." 17. The amount of penalty thus can be an amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 33 for imposing any lesser penalty than 10 times, however, when provision of Section 38 is read, the discretion given to Deputy Commissioner to refund the penalty is akin to exercise of the jurisdiction Under Section 39 where while determining the penalty he can impose the penalty lesser than 10 times." The expression "if he thinks fit" also occurs in Section 40 sub-clause (b). The same legislative scheme as occurring in Section 39 is also discernible in Section 40(b), there is no legislative intentment that in all cases penalty to the extent of ten times the amount of proper stamp duty or deficient portion should be realised. The discretion given to Collector by use of expression "if he thinks fit" gives ample latitude to Collector to apply his mind on the relevant factors to determine the extent of penalty to be imposed for a case where instrument is not duly stamped. Unavoidable circumstances including the conduct of the party, his intent are the relevant factors to come to a decision. 22. The purpose of penalty generally is a deterrence and not retribution. When a discretion is given to a public authority, such public authority should exercise such discretion reasonably ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Uttar Pradesh & others v/s Raja Mohammed Amir Ahmad Khan (AIR 1961 SC 787)? NO 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? So far as the applicability of provision 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? There will be no authorization in the Collector in impounding such an instrument under Section 33 of the Stamp Act. D Whether the general time limit presc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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