Additional stamp duty under Section 3B of the Karnataka Stamp Act is chargeable beyond the maximum duty limit of ₹25 crores, as specified by Article 20(4), affirming independent statutory levies.

JUDGMENT :

VIBHU BAKHRU, CJ.

1. The appellant has filed the present intra-court appeal, impugning an order dated 27.01.2025 [impugned order] passed by a learned Single Judge of this Court in W.P.No.5031/2023 (GM-ST/RN).

2. The appellant had filed the said petition captioned 'Prestige Exora Business Parks Limited v. State of Karnataka & Others', inter alia, assailing an order dated 03.12.2022 passed by respondent No.3 [District Registrar of Stamps and Registration], to the limited extent that the said order imposed cess/additional stamp duty amounting to ₹2.5 crores, being 10% of the maximum stamp duty of ₹25 crores. The appellant had discharged the levy of the said additional stamp duty/cess and accordingly claimed refund of the same along with interest at the rate of 12% per month, from date of payment – that is, from 01.02.2023 – till the date of repayment.

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3. The learned counsel for the appellant contended that the maximum stamp duty payable under the KARNATAKA STAMP ACT , 1957 [Act] on the Scheme of Arrangement under Sections 230 -232 of the COMPANIES ACT , 2013, is ₹25 crores. Therefore, the demand of additional stamp duty over and above the maximum amount, was contrary to law. The learned Single Judge had not accepted the said contention and had found that additional duties as imposed under Section 3 B of the Act, are in addition to the stamp duties as specified under the schedule to the Act.

Prefatory facts

4. The appellant is a Company incorporated under the COMPANIES ACT , 2013. It is inter alia engaged in the business of planning, setting-up, developing, building, owning, constructing, operating, maintaining business parks, industrial parks, software technology parks complete with all facilities.

5. The appellant Company and a company named 'Pluto Cessna Business Parks Private Limited', had proposed a Scheme of Arrangement for demerger of Exora Business Park along with the CAM Business, on a going concern basis. The said Scheme of Arrangement between the appellant [Demerged/Transferor Company], and Pluto Cessna Business Parks Private Limited [Resulting/Transferee Company], as well as their shareholders and creditors, was approved by National Company Law Tribunal [NCLT] in terms of the order dated 22.04.2022.

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6. In terms of the said scheme, Exora Business Park along with the CAM Business, was demerged from Prestige Exora Business Park Limited and vested with Pluto Cessna Business Parks Private Limited as a going concern basis.

7. It is the appellant's case that the order of approval passed by the NCLT is a "Conveyance" within the meaning of Section 2(d) of the Act. There is no cavil that the stamp duty as stipulated under Article 20(4) of the Schedule to the Act, is payable on the said instrument of conveyance.

8. The appellant filed an affidavit of stamp duty along with Schedule of Assets transferred under the said Scheme before the NCLT on 07.10.2022. It also filed the said affidavit along with Schedule of Assets and the order passed by the NCLT before respondent No.3, for adjudication, on 08.10.2022.

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9. Thereafter, on 10.10.2022, respondent No.3 directed the appellant to obtain a valuation of movable properties from Technical Consultancy Services Organisation Karnataka [TECSOK]. According to the appellant, the maximum stamp duty payable was ₹25 crores, which was attracted in this case. Thus, the appellant filed a representation seeking exemption from valuation of movable assets, from TECSOK.

10. In the meanwhile the valuation report from TECSOK was received by the appellant on 01.12.2022. The same was also forwarded by TECSOK to respondent No.3. Thereafter, the proceedings for adjudication of the stamp duty, culminated in respondent No.3 passing an order dated 03.12.2022 adjudicating the stamp duty payable at ₹25 crores, and 10% additional cess / stamp duty under Section 3 B of the Act, at ₹2.5 crores. Thus, respondent No.3 adjudicated the aggregate duty payable at ₹27.50 crores (stamp duty ₹25 crores plus Additional duty