The court ruled that a Business Transfer and Share Subscription Agreement constitutes a conveyance on sale under the Stamp Act, thus attracting ad valorem duty, not nominal duty.

Amarjeet Singh Serjit Singh J:

Introduction

[1] In this judgment, the sections or schedules mentioned refer to the Stamp Act 1949 .

[2] On 25 November 2024, I dismissed the appeal which was brought by way of a case stated wherein the plaintiff, Petronas Dagangan Berhad ("PDB" or "Vendor") sought, in the main, a declaration that the assessment of stamp duty under Item 32(a) of the First Schedule appearing in the Notice of Stamp Duty Assessment dated 15 September 2022 ("the assessment" or "the said Notice") made by the Collector of Stamp Duty ("the Collector") is null and void.

[3] A further declaration was sought to the affect that the stamp duty reflected in the said Notice on the Business Transfer and Share Subscription Agreement dated 9 March 2022 ("the Agreement") between the plaintiff and Petrosniaga Sdn Bhd ("Pertosniaga" or "Purchaser") and Petroleum Sarawak Berhad should be charged with RM10.00 under Item 4 and not under Item 32 of the First Schedule.

[4] The issues framed by the Collector in the case stated (at para 16) prepared under s 39(1) for determination by this Court are as follows:

16.1 Whether the Notice of Assessment issued by the Defendant is wrong, null, and void;

16.2 Whether the Agreement dated 9 March 2022 has to be assessed with nominal duty under Item 4 First Schedule of the Stamp Act 1949 or ad valorem duty under Item 32(a) First Schedule ; and

16.3 Whether Notice of Assessment issued by the Defendant who rejected the Plaintiffs appeal under s 38A Stamp Act 1949 can be set aside.

[5] In my view, the issues can be condensed into one: whether the stamp duty on the Agreement should be assessed with the nominal RM10.00 duty under Item 4 or the ad valorem duty under Item 32(a) of the First Schedule. There is no confusion as paragraph (a) of Item 32 is specifically referred to in the question framed in the case stated.

[6] The law in respect of a case stated under the Stamp Duty Act 1949 is trite and it suffices to refer to the recent case of Pemungut Duit Setem v. Lee Koy Eng & Another Appeal 2022 MarsdenLR 1428 ; [2022] 6 MLJ 45; [2022] 8 CLJ 863; [2022] 6 AMR 100 where the Federal Court said the following in light of s 39 which governs a case stated:

(i) the only purpose of the case stated is to facilitate the Court to answer the stated questions on the basis of facts as stated;

(ii) the High Court is not tasked with fact-finding;

(iii) the High Court is required to assess the duty chargeable in the event it forms the opinion that the instrument in question is chargeable with duty; and

(iv) where the Court opines that the assessment or additional assessment by the Collector is erroneous, any excess paid shall be ordered to be repaid to the appellant.

The Law On Stamp Duty

[7] It is settled law that stamp duty under the Stamp Duty Act 1949 is imposed on the instrument, and not the transaction. The charging provision for stamp duty is s 4(1), which provides as follows:

Subject to this Act and subject to the exemptions contained in this Act and in any written law for the time being in force, the several instruments specified in the First Schedule shall, from and after the commencement of this Act, be chargeable with the several duties specified in such Schedule.

[8] The items in the First Schedule that concern this appeal are Items 4 and 32(a). Item 4 of the First Schedule provides as follows:

AGREEMENT OR MEMORANDUM OF AGREEMENT

made under hand only, and not otherwise specially charged with any duty, whether the same is only evidence of a contract or obligatory on the parties from its being a written instrument.

while Item 32(a) provide as follows:

CONVEYANCE, ASSIGNMENT, TRANSFER, OR ABSOLUTE BILL OF SALE:

(a) On sale of any property (except stock, shares, marketable securities, and accounts receivables or book debts of the kind mentioned in paragraph

(c))

[9] The words "conveyance on sale" in issue in the instant appeal is described in s 2 to include every instrument (ie written document) whereby any property, or