JUDGMENT - Chagla, C.J.

1. A rather interesting question arises as to the liability of a company to pay stamp duty in respect of a transfer of shares not duly stamped, and the question arises in the following way. The Jagdish Mills Ltd. is a public limited company which was incorporated in Baroda under the Baroda State Companies Act of Samvat year 1975. It appears that between 1942 and April 1, 1949, various transfer deeds were sent to the company duly executed from outside the Baroda State, and inasmuch as the transferor or the transferee did not have the necessary Baroda stamps they used to send moneys to the company and the practice was that the company used to buy the requisite Baroda stamps, affix them to the transfer deeds and get them registered. It was found subsequently that two employees of the company had misappropriated these moneys and had not stamped the transfer deeds as required by law. The company coming to know of this, very honestly and properly drew the attention of the revenue authorities on May 3, 1950, to the position then obtaining and pointed out that a large number of transfer deeds had not been duly stamped. The revenue authorities took the view that in re

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