Order of Court/NCLT sanctioning an Arrangement/scheme of Amalgamation is an Instrument of Conveyance and is liable to Stamp duty and is chargeable as per Article 23 of Schedule-I of Indian Stamp Act, 1899 – The State of Tamil Nadu Vs. Serene Estate Pvt. Ltd. – Madras High Court
In this important judgment on stamp duty on amalgamation / restructuring, Division Bench of Hon’ble Madras High Court held that:
(i) The Order of Court/Tribunal sanctioning an arrangement/scheme of amalgamation appended thereto is an instrument.
(ii) The order sanctioning amalgamation / restructuring appended by the scheme as such is an instrument of conveyance liable to duty under Article -23 of the Act and no further legislative action is necessary to bring the same within the ambit of duty.
(iii) The State of Tamil Nadu is well within its powers to reduce or remit the duty chargeable under the Act.
(iv) To the last sentence of the notification contained in the impugned Government Order, in G.O.(Ms.) No.29 dated 01.03.2019, i.e., “or 0.6 percent of the aggregate of the market value of the shares, whichever is higher” alone is struck down and rest of the notification shall stand
(v) The instrument of amalgamation is already liable to duty under the existing provisions and the impugned circular is only clarificatory in nature. Therefore any clarification would automatically be retrospective.
(vi) If the duty paid in any other State is higher than the State of Tamil Nadu, then the same has to be taken into consideration and no duty shall be payable. If the duty paid is lesser than what is payable in the State of Tamil Nadu, then whatever amount paid is to be set off and the balance duty is to be paid on the instrument of amalgamation.
