An Asset Purchase Agreement not involving the transfer of goodwill does not attract ad valorem stamp duty under the Stamp Act, 1949.

JUDGMENT

Noorin Badaruddin J:

[1] This is an appeal by way of Case Stated filed by the Plaintiff under s 39 of the Stamp Act 1949 (" SA ") for a declaration that the Notice of Stamp Duty Assessment dated 15 March 2020 ("the Assessment") issued by the Respondent is erroneous, null and void.

Facts

[2] On 6 February 2020, the Plaintiff entered into an Asset Purchase Agreement ("the Agreement") with Martin-Brower Malaysia Co Sdn Bhd ("MB Malaysia") where the Plaintiff agreed to acquire the business assets and liabilities of MB Malaysia. The details of the assets and liabilities acquired are set out in Schedule 1 and Schedule 3 of the Agreement. Among others, the assets and liabilities acquired are MB Malaysia's fixed assets such as computer software, computer hardware, fittings, renovation, plant, machinery and equipment as well as liabilities under business contracts.

[3] The purchase price for the acquisition stated in Schedule 1 of the Agreement amounts to USD2,491,491.55, equivalent to RM10,378,806.35 at the material time.

[4] The list of excluded assets are listed under Schedule 2 of the Agreement. Among others, the assets excluded in the transaction is the "goodwill of the Malaysia Business" of MB Malaysia.

[5] The Plaintiff through it's solicitors made an application for adjudication of the Agreement through e-stamps on 5 March 2020.

[6] The Respondent adjudicated the Agreement with ad valorem duty amounted to RM399,196.00 with the view that the Agreement falls within the ambit of s 21(1) of the SA and Item 32 (a), First Schedule of the which forms the basis of the impugned Assessment.

[7] The Plaintiff made the payment of RM399,196.00 and via letter of 10 April 2020, the Plaintiff's solicitor informed the Respondent that the payment was made under objection based on s 38A of the SA .

[8] On 11 April 2020, the Plaintiff made an application to appeal against the Assessment raised by the Respondent with the view that the Agreement should be assessed based on Item 4, First Schedule of the SA .

[9] The Respondent rejected the Plaintiff's appeal and maintained its decision via letter dated 13 April 2020.

[10] Aggrieved with the Respondent's decision, the present appeal was filed by the Plaintiff.

The Issue

[11] The sole issue to be determined herein is whether the Agreement is to be assessed under Item 4 or Item 32, First Schedule of the SA .

Findings

[12] Items 4 and 32, First Schedule of the SA read as follows:

FIRST SCHEDULE

[Section 4]

INSTRUMENTS CHARGEABLE WITH STAMP DUTY

"4 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.

"32 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))

b. On sale of any stock, shares or marketable securities, to be computed on the price or value thereof on the date of transfer, whichever is the greater:-

For every RM1,000.00 or fractional part of RM1,000.00

c. On the absolute sale of any accounts receivables or book debts to a bank, merchant bank, or finance company licensed under the Banking and Financial Institutions Act 1989 or under the Islamic Banking Act 1983 or a scheduled institution as defined under s 2 of the Banking and Financial Institutions Act 1989, pursuant to a factoring agreement

d. Of any property by way of security or any security other than a marketable security

e. Of any property as above where the transaction is between trustees and where:

i. the beneficial interest in the property passes

ii. the beneficial interest in the property does not pass

f. Of any property, for the purpose of effectuating the appointment of a new trustee or the retirement of a trustee although no new trustee is appointed

g. Of any property by way of settlement

h. Of any property by way of gift (whether by