The Asset Purchase Agreement constituted a conveyance on sale under the Stamp Act 1949, making it subject to ad valorem duty as per item 32(a) of the First Schedule.

Introduction

[1] The respondent plaintiff, HAVI Logistics (M) Sdn Bhd, entered into an Asset Purchase Agreement with Martin Brower Sdn Bhd to purchase certain assets and liabilities. The purchase price under the Asset Purchase Agreement for the assets that were acquired under the agreement (defined in the agreement as "Acquired Assets") was USD2,491,491.55. The terms of the purchase specifically excluded goodwill.

[2] The Asset Purchase Agreement was assessed by the Collector of Stamp Duty with ad valorem duty in the amount of RM399,196.00 based on item 32 of the First Schedule to the Stamp Act 1949 . The respondent appealed to the High Court by way of a case stated pursuant to s 39 of the .

At The High Court

[3] The respondent was of the view that the Asset Purchase Agreement ought to have been assessed as an agreement under item 4 of the First Schedule to the Stamp Act 1949 , under the terms of which duty of only RM10.00 was payable.

[4] The learned High Court Judge hearing the matter agreed with Counsel for the respondent, holding that the stamp duty on the Asset Purchase Agreement ought to have been assessed under item 4 of the First Schedule. The relevant portion of the grounds of judgment of the Court below stated as follows:

[48] On a plain reading of Item 4, First Schedule of the SA , this Court finds that the Plaintiff has fulfilled all the requirements stipulated thereunder. The Agreement clearly fell within the ambit of item 4, First Schedule of the . Therefore, the stamp duty on the Agreement should be assessed under the same Item.

Conclusion

[49] Premised on the reasons alluded to in the above, the Plaintiff's application was allowed with costs.

This Appeal

[5] The Collector of Stamp Duty appealed to this Court against the determination of the High Court. The decision of the Court below was assailed on the grounds that the applicable provision ought to have been s 21(1) of the Stamp Act 1949 , read together with item 32 of the First Schedule.

[6] We allowed the appeal, but for different grounds than that advanced by revenue Counsel. Our reasons are set out here.

The Material Provisions Of The Asset Purchase Agreement

[7] It will be necessary for the purposes of this judgment that the material provisions of the Asset Purchase Agreement be borne in mind. These are set out in the following paragraphs.

[8] The principal operative clauses in the Asset Purchase Agreements are cls 2.1(a) to (c), which provides for the specific assets to be acquired and liabilities to be assumed. They read as follows:

2.1 Acquired Assets and Assumed Liabilities.

(a) Subject to and in accordance with the terms of this Agreement, the Seller hereby sells, transfers, conveys, assigns and delivers to the Purchaser, and the Purchaser