Stamp Act | Deed Transferring Company's Name Not Conveyance Deed, No Stamp Duty Can Be Levied: Chhattisgarh High Court

The Chhattisgarh High Court observed that no stamp duty could be levied on the transfer of a company's name under Section 23 of the Companies Act, 1956 upon the amalgamation of the companies.

The bench comprising Justice Ravindra Kumar Agrawal observed that a deed of amendment of the company's name cannot be called a conveyance deed for levy of the stamp duty because the deed of amendment had only transferred the name of the company and does not have effect on the transfer of property.

“In determining the question whether instrument is liable to be stamp duty as conveyance, the substance of transaction alone is to be looked at. From bare perusal of the said deed of amendment, only the name of company has been transferred under Section 23(1) of the Companies Act, 1956 and all the assets and liabilities of the company would remain the same. In the opinion of this Court, the deed of amendment does not come under the definition of conveyance.”, the court observed.

The question that appeared for the Court's consideration was whether the amendment deed to transfer the company's name under the Companies Act would be categorized as a conveyance to attract a levy of stamp duty under the Indian Stamp Act, 1899.

Answering in negative, the court observed that the amendment deed to transfer the company's name could not be termed as conveyance, therefore the stamp duty under Article 23 of Schedule I-A of the Indian Stamp Act, 1899 can't be levied.

The Court added that since the possession of the subject property remained with the company and the possession was not handed over by the said deed of amendment it cannot be considered to be as conveyance as contemplated in explanation to Article 23 of the Schedule I-A of the Indian Stamp Act, 1899.

Accordingly, the State's appeal was dismissed, and the impugned order passed by the Chhattisgarh Board of Revenue was affirmed.

Appearance:

For Petitioners : Mr. Vinay Pandey, Deputy Advocate General.

For Respondent No.1 : Mr. Rahul Pandey and Mr. Ashish Surana, Advocates.

Case Title: State of Chhattisgarh & Anr. vs. M/s Jayaswal Neco Industries Ltd. & Anr., WPC No. 1863 of 2016

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