75th Founding Day Lecture Meeting on “India@2030” Know More

July 2016

Bombay Stamp Act – Amalgamation – Scheme of amalgamation is not chargeable to stamp duty. It is the order of court sanctioning the scheme that is chargeable. [ Bombay Stamp Act,1958, Section 3,2(1)]

By Dr. K. Shivaram
Senior Advocate; Rahul K. Hakani
Advocate
Reading Time 1 mins
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The Chief Controlling Revenue Authority, Maharashtra vs. Reliance Industries Ltd AIR 2016 BOMBAY 108 Full Bench.

The Reliance Industries Limited and Reliance Petroleum Limited, Jamnagar Gujarat entered into a scheme of amalgamation u/ss. 391 & 394 of the Companies Act 1956. Company petitions were filed by the transferor company in Gujarat High Court and the transferee company in Bombay High court. The Scheme was sanctioned by both the High Courts. Accordingly, stamp duty was paid in Gujarat of Rs 10 crore. When the order sanctioning the Scheme of amalgamation was presented for stamp duty adjudication in Maharashtra, the Company claimed set off of the stamp duty paid in Gujarat which was refused.

The full bench of the Bombay High court held that as the scheme of arrangement or amalgamation has no effect or force unless or until it was sanctioned by the court, it is the order sanctioning the scheme that would be an instrument u/s. 2(l) and not the scheme of amalgamation. Hence, the Company was not entitled for rebate of stamp duty paid in Gujarat.

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