KUSUM AGROTECH LTD. Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) THE petitioner has challenged the order dated 8 -11 -2004, passed by Deputy Inspector General (Stamps) and Collector Stamps, Kota whereby the learned Collector held that an order passed by a High Court under Section 394 of the Companies Act, 1959, ('the Companies Act' for short) permitting amalgamation of two companies is covered under the definition of word 'conveyance', contained in Section 2(xi) of Rajasthan Stamps Act,1998 ('the Act' for short). Therefore, the petitioner company is liable to pay the stamp duty. The Learned Collector had also directed the Sub -Registrar (Stamps) to calculate the extent of stamp duty payable. He further directed the Sub -Registrar to recover the stamp duty in case the petitioner company does not deposit the requisite stamp duty. The petitioner company has also challenged the order dated 21 -6 -2006, passed by Rajasthan Tax Board, Ajmer ('the Board' for short), whereby the learned Board has upheld the order dated 8 -11 -2004.

(2.) THE factual matrix of the case in a short compass is that the petitioner company wanted to amalgamate with its sister concern, M/s. Kusum Products Ltd. Therefore, the petitioner company moved an application before the Hon'ble Calcutta High Court under Section 391(2) read with Section 394 of the Companies Act. Vide order dated 16 -6 -1999 the Hon'ble Calcutta High Court approved the scheme for amalgamation. Therefore, the assets and liabilities of the transferring company i.e. the petitioner company stood transferred to M/s. Kusum Product Ltd. The petitioner company owned certain land in Khasra Nos. 217 and 235 in village Tather, Tehsil Ladpura, admeasuring 4.96 hectare, where the petitioner company had established its factory. Since the said immovable assets was also being transferred to M/s. Kusum Product Ltd., on 12 -10 -1999 the petitioner company informed the Additional District Magistrate City Kota ('the ADM' for short) about the merger of two companies. It further informed the ADM that, henceforth, the petitioner company will be known as M/s. Kusum Product Ltd.

(3.) ON the other hand, Mr. S. N. Kumawat, the learned Additional Advocate General for the State, has opposed the contentions raised by the learned Counsel for the petitioner. He claims that the amendment dated 27 -5 -2004 was merely clarificatory in nature. According to him even the original definition of word 'conveyance' included an order passed by a Hon'ble High Court under Section 394 of the Companies Act. For, according to him the original definition dealt with transfer of properties 'inter -vivos' i.e. the transfer of property between two living persons. Since, the Company is deemed to be a juristic person, therefore, the transfer of property from one company to another is, ipso facto, covered within the definition of word 'conveyance'. Moreover, Section 2 (xix) of the Act defines the word 'instrument' meaning as 'every document by which any right is purported to be transferred'. Since, the order passed by the Hon'ble Calcutta High Court under Section 394 of the Companies Act transferred the property from one company to another, the said order falls within the definition of the word 'instrument'. Therefore, according to the learned Counsel, both, the learned Collector Stamps as well as the learned Board were justified in holding that an order passed by a High Court under Section 394 of the Companies Act does fall within the definition of word 'conveyance'. Hence, the petitioner is liable to pay the stamp duty. Secondly, relying on the case of Ruby Sales and Service Pvt Ltd. (supra), the learned Counsel has contended that the order passed by Hon'ble Calcutta High Court was a 'consent decree'.