The applicability of the relevant provisions of the Indian Stamp Act, 1899 (as per West Bengal amendment) to the calculation of stamp duty on a demerger transaction involving companies where none of the immovable properties were located in the State of West Bengal.

JUDGMENT :

The Court:- 1. The moot question which has arisen in the present writ petition is whether the respondent-Authorities were justified in imposing stamp duty payable at the rate of 7 per cent instead of 0.5 per cent under the Indian Stamp Act, 1899 (as per West Bengal amendment). A cardinal feature here is that the transaction-in-question is a demerger of companies, in which none of the immovable properties of the transferor company are located in the State of West Bengal.

2. As per learned senior counsel for the petitioner, the calculation of stamp duty ought to have been under Clause (b)(ii) of the Proper Stamp-Duty column, stipulated under Article 23A of Schedule IA of the West Bengal amendment.

3. The learned Advocate General, appearing for the respondents-Authorities, on the other hand, argues that the general provision of the right-hand (“Proper Stamp-Duty”) column of Article 23A, and not the proviso, would be applicable, in view of none of the properties involved being situated in West Bengal.

4. The respondents have cited several judgments. In the first of such judgments, reported at LXXI Indian Appeals 113 [Madras and Southern Mahratta Railway Company Limited Vs. Bezwada Municipality], it was observed that the proper function of a proviso is to except and deal with a case which would otherwise fall within the general language of the main enactment, and its effect is confined to that case.

5. The Learned Advocate General, appearing for the respondent-Authorities, also cites Rohitash Kumar and others Vs. Om Prakash Sharma and others, reported at (2013) 11 SCC 451, where it was held by the Supreme Court that the normal function of a proviso is generally to provide an exception of something that is outside the ambit of usual intention of the enactment, or qualify something enacted therein, which, but for the proviso, would be within the purview of such enactment. Thus, its purpose is to exclude something which would otherwise fall squarely within the general language of the main enactment. Usually, it was held, a proviso cannot be interpreted as a general rule, nor can it be interpreted in the manner that would nullify the enactment, or take away entirely, a right that has been conferred by the statute. The proviso to a particular provision of a statute, it was held, only embraces the field which is covered by the main provision, by carving out an exception to the said main provision. In a normal course, the Supreme Court held that a proviso can be extinguished from an exception for the reason that exception is intended to restrain the enacting clause to a particular class of cases while the proviso is used to remove special cases from the general enactment provided for them specially.

6. The principles laid down in the said judgments are well-settled and there cannot be any quarrel in that regard. However, in the present case, the inter-play of inclusions and exclusions contemplated in the provisions of the Act, are to be interpreted in proper perspective.

7. The relevant provisions are Articles 23, 23A and 62 of Schedule IA, whereas, Section 2(10) of the Act itself is also tangentially relevant.

8. It has virtually been argued by both sides that Article 23A of Schedule IA is applicable in the present case. The dispute is, whether Clause (b) (ii) or the main provision of the stamp duty stipulated in the right-hand column against the said Article is applicable.

9. However, the said controversy loses relevance in the present perspective, in view of the description of instruments given in Article 23A.

10. In this context, Articles 23, 23A and 62 of Schedule IA (West Bengal Amendment) of the Stamp Act are required to be looked into and set forth below: