The Himachal Pradesh High Court has recently held that stamp duty or registration fee cannot be levied upon conversion from a Public Limited Company to a Private Limited Company for changing the name in the revenue records.
Being aggrieved and dissatisfied with a communication whereby request made by petitioner seeking change in the name of the Company from “INOX AIR PRODUCTS LTD” to “INOX AIR PRODUCTS PRIVATE LIMITED” came to be rejected, petitioner-Company approached the Court in a writ petition.
The petitioner requested to change the name of the company in its records and issue a fresh fard, consequent to change of petitioner from a “public limited” to “private limited” company. It was informed by the petitioner that since neither there was sale nor purchase of land of the company nor there was any change in the ownership and management as such, LR-XIV form was not required.
The petitioner was informed by a letter that a partnership firm and a company are two separate legal entities an in such a situation if a company applies for change in its name, then it is clear cut case of transfer of property, which will attract provisions of S.118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972 as also the Stamp Act, 1899.
The respondent-state contended that a company and a proprietorship firm are two separate legal entities, as such are liable to pay stamp duty before change of its name in the revenue records.
Additional Advocate General Narender Guleria submitted for the revenue that, when a company is changed with the approval of Registrar of the Companies and no transaction/sale of property takes place, in that case, company is not liable to pay any stamp duty, but in case proprietorship is changed to a partnership Firm then party seeking change in the name of the company, is liable to pay the stamp duty. Since in the case at hand, the name of the company has been changed from M/s Inox Air Products Limited to M/s Inox Air Products Private Limited, it is liable to pay stamp duty.
The petitioner represented by Manish Jain and Sunil Mohan Goel submitted that, when only name of a company is changed with the approval of Registrar of Companies, in terms of Ss.20 and 23 of the Companies Act, and no sale/transaction of property takes place, then the company seeking change in name is not required to pay any stamp duty.
The Single Bench of Justice Sandeep Sharma directed the revenue to consider the name change request of the petitioner without insisting on payment of stamp duty.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
