As per the scheme of arrangement and amalgamation, the assets and The Rajasthan High Court (HC) held that stamp duty is leviable on market value of property situated in the state of Rajasthan and required to be assessed by the statutory scheme of the Stamp Act of 1998.
Mr Bishwajit Bhattachharya Senior Advocate & Mr Anuroop Singhi Advocate with Mr Devansh Sharma appeared for the appellant and Major R.P. Singh, Additional Advocate General assisted by Mr Jaivardhan Singh Shekhawat appeared for the respondent.
The appellant, Himachal Futuristic Communications Limited challenged the order dated 07.06.2019 passed by the learned Single Judge.
The appellant engaged in the business of manufacturing telecom equipment, optical fibre cables and also providing telecom turnkey services, entered into an arrangement and amalgamation of another company namely, Sunvision Engineering Company Private Limited. The High Court of Himachal Pradesh sanctioned the scheme of arrangement and amalgamation of Sunvision Engineering Company Private Limited with the appellant company.
properties of Sunvision Engineering Company Private Limited were registered with the appellant company and equity shares were also allotted to the shareholders of Sunvision Engineering Company Private Limited. Sunvision Engineering Company Private Limited also owned 14 parcels of land situated in the State of Rajasthan.
It was observed that the entire proceedings of arrangement and amalgamation and its sanction took place outside the State of Rajasthan and to that extent stamp duty under the Stamp Act of 1998 would not be leviable.
It was viewed that Section 3(b) of the Stamp Act of 1998 reveals that every instrument mentioned in the Schedule appended to the Stamp Act of 1998, which is executed out of the State, is chargeable with stamp duty under the Stamp Act of 1998, a State legislation when it relates to any property The taxing event must bear connection like territorial nexus if the instrument happens to be an instrument executed out of the State.
Justice Manindra Mohan Shrivastava and Justice Birendra Kumar observed that the demand for payment of stamp duty over such liability is more than authority under the Stamp Act of 1998.
The Tribunal set aside the order passed by the Single Judge being unsustainable in law and allowed the Writ petition.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
