Stamp duty on amalgamation is applicable only if immovable property is transferred within the state; otherwise, it should be based on the market value of shares issued.

ORDER :

Vivek Rusia, J.

The petitioner has filed the present Writ Petition being aggrieved by the order dated 21.09.2016 passed by the Collector and the order dated 22.08.2018 passed by the Board of Revenue, Gwalior, and the collector of stamps.

2. The Petitioner is a company incorporated under the Companies Act, 1956 (Now 2013) having its registered office at Plot No.9,10,11, Sector 3 Industrial Area, Kheda, Pithampur, District Dhar. Vide resolution dated 01.07.2019 passed by the Board of Directors, Mr. Syed Mohammad Aun has been authorized to file this Writ Petition.

3. The petitioner (hereinafter referred to as the Transferee company) along with its other group company MAHLE IPL Limited (hereinafter referred to as 'the Transferor Company'') having its registered office within the State of Tamil Nadu decided to carry out a restructuring of the group for simplification of their structure and control and prepared Scheme of Amalgamation with the petitioner (hereinafter referred to as 'Transferee Company'). In this regard, Company Petition No.22/2014 under Section 391 to 394 of the Companies Act, 1956 was filed by the Transferee company for approval of the Scheme of Amalgamation. Vide order dated 28.11.2014 final order was passed by the Company Judge. Similarly, the Transferor Company has also filed Company Petition No.301 of 2014 before the Court of Judicature at Madras under Section 391 to 394 of the Companies Act. Vide order dated 11.12.2014, approval was granted for the Scheme of Amalgamation.

4. According to the Transferee company under the Scheme of Amalgamation as part of the consideration, one fully paid up equity share of Rs.10 each of the Transferee company is to be issued and allotted against every 3.0116 fully paid equity shares of Rs. 10 each to Directors of Transferor Company. As per the valuation report dated 10.03.2014 submitted by MZSK & Associates, the market value of the Transferee company share was estimated at Rs.266.40. Accordingly, 34,60,349 number of shares having a value of Rs.92,18,36,973.60 were issued by the Transferee company to the shareholders of the Transferor Company. It is further submitted by the Transferee company that the Transferor Company did not own any immovable property located within the State of Madhya Pradesh, thus no immovable property located within the State of Madhya Pradesh was transferred to the Transferee company under the Scheme of Amalgamation. After the order passed by this Court as well as the High Court of Madras, the petitioner submitted an application on 15.01.2015 before the Collector seeking adjudication about the payment of the stamp duty Deed of Amalgamation. Vide order dated 21.09.2016, the Collector of Stamp directed the petitioner to pay the stamp duty of Rs.6,98,32,399/-alongwith penalty of Rs.1,00,000/- as 5% of the total value of the immovable property of the Transferor company located in the State of Tamilnadu.

5. Being aggrieved by the aforesaid order, the petitioner/ the Transferee company filed an application for review on 22.11.2016, thereafter when no order was passed, a Revision was preferred under Section 56 of the Stamp Act before the Board of Revenue. Vide impugned order dated 02.08.2021, the Revenue Board dismissed the Revision and upheld the order of Collector, hence, this Writ Petition before this Court.

6. Shri Akshay Sapre, learned counsel for the Transferee company submits that the Collector, as well as the Board of Revenue, have failed to consider the provision of proviso (a) of Article 25 of Stamp Act which says that 5% of the market value of the immovable property transferred under the Scheme of Amalgamation which is located within the State of Madhya Pradesh or 0.5% of the aggregate of the market value of the shares issued or allotted in exchange or otherwise and the amount of consideration paid for such transfer whichever is higher, hence, under the Scheme of Amalgamation when no immovable property located within the State of Madhya Pradesh was t