The court ruled that impounding under the Stamp Act is invalid if the instrument is presented for opinion, and penalties cannot be levied without intention to evade duty.

JUDGMENT :

BIREN VAISHNAV, J.

1. This Stamp Reference is made under Section 54(1A) of the GUJARAT STAMP ACT , 1958 (hereinafter referred to as ‘the STAMP ACT ’) by the Chief Controlling Revenue Authority, Gandhinagar for the opinion of this court.

2. Facts in brief are as under:

2.1 A scheme of arrangement between Vodafone Idea Limited (hereinafter referred to as ‘the transferor company’) and Vodafone Idea Telecom Infrastructure Limited (hereinafter referred to as ‘the transferee company’) and their respective shareholders and creditors was presented for the transfer of the Fibre Infrastructure Undertaking of the transferor company and vesting of the same with the transferee company. The transferee company was to pay to the transferor company consideration equal to the carrying value of net assets transferred, calculated as the difference between the book value of the assets and the book value of the liabilities transferred on the appointed date as stipulated in clause 8.1 of Part B of the Scheme. The consideration amount was determined as Rs.4639 crores.

2.2 The National Company Law Tribunal at Ahmedabad (for short ‘the Tribunal’) by an order dated 18.09.2019 sanctioned the scheme. In paragraph 16 of the instrument, the Tribunal directed as follows:

“16. The Petitioner Companies are directed to file a copy of this order along with a copy of the Scheme with the concerned Registrar of Companies, electronically, along with INC-28 in addition to physical copy as per relevant provisions of the Act as well as to Stamp Authority, Gujarat within 60 days of the receipt of the order.”

2.3 The certified copy of the order was made available by the Registry on 30.09.2019. The copy was filed by the transferor company before the Registrar of Companies on 15.10.2019. According to the transferor company, since a copy of the order could be filed within 60 days of the receipt of the instrument, the transferee company on 13.11.2019 filed an application under Section 31 of the STAMP ACT seeking opinion of the Collector as to the proper stamp duty payable on the said instrument. In the application, it was the case of the transferee company that as per Article 20(d) of Schedule-I of the STAMP ACT , the duty could be Rs.25 crores. It is the case of the companies that despite repeated requests no opinion was given.

2.4 The transferee company on 16.03.2021 received a notice under Section 39(1)(b) of the STAMP ACT . According to the notice, it was the case of the Collector that since the order dated 18.09.2019 of the Tribunal was an ‘instrument’ and therefore included in the definition of ‘conveyance’ under Section 2(g) of the STAMP ACT , the same ought to have been stamped within 30 days in accordance with the provisions of Section 17 of the STAMP ACT and hence the application made on 30.11.2019 was time barred and therefore the transferee company was asked to show cause as to why penalty be not levied under the provisions of the STAMP ACT .

2.5 A detailed reply was submitted explaining that the application dated 30.11.2019 was not time barred and that the proceedings initiated by the Collector under Section 39(1)(b) of the STAMP ACT was without jurisdiction and that it was an undisputed fact that there was neither any malafide intention nor an attempt on behalf of the companies to evade payment of stamp duties and therefore no penalty could be imposed. After a personal hearing in the matter, the Collector by an order dated 25.10.2021, directed the transferee company to pay Rs.25 crores towards stamp duty and furt