THORNE ACTING CJ - This is an appeal from the judgment of Mr. Justice Prichard delivered on the 30th day of December, 1931, upon a question which arose under the Stamp Enactment No. 6 of 1930.In order to a proper consideration of the matter, the facts may be reviewed briefly.

By an agreement in writing which bears date the 15th day of June, 1931, a company called Standard-Waygood Limited, incorporated in New South Wales, of the one part, and a company named Stanway Limited, registered under the Companies Enactment, 1917, of the Federated Malay States, of the other part, it was agreed that Standard-Waygood Limited (which I will hereafter refer to as the vendors) and the Stanway Ltd. (to which I will refer as the purchasers) agreed together for the sale and purchase of the assets described in the schedule to that agreement, of which the following are the material terms.

As consideration for the said sale the purchasers agreed to pay to the vendors the sum of 61,636-13-4 which was to be paid and satisfied by the allotment to the vendors of shares in the capital of the purchasers.The sale was to be completed when the consideration was to be paid and satisfied, and the vendors were to execute and do all such assurances and things as should be reasonably required by the purchasers for the vesting in them of the said premises so sold.The said premises were sold as on the 1st day of January, 1931, on and from which date the purchasers were to be entitled to the profits received in respect thereof, and all property into which the said premises may have been converted, exchanged or substituted.

Upon the presentation of that agreement for stamping the Collector of Stamp Duty was of the opinion that under the provisions of the Stamp Enactment, and ad valorem duty was payable on the total consideration; and he assessed the amount of that duty at $3,171.

Correspondence thereafter took place between the solicitors for the purchasers and the Collector of Stamp Duty, and by a later communication dated the 28th September, 1931, the Collector of Stamp Duty pointed out that a miscalculation had been made in the earlier assessment, and he assessed the duty at a total sum of $1,772.70, that being ad valorem stamp duty as set out in that communication.

The purchasers were still not satisfied and the matter was referred, under the provisions of the same Enactment, to the chief Revenue Authority in the Federated Malay States.By a communication dated the 27th July, 1931, the ruling of the Collector of Stamp Duty was confirmed, it being held that stamp duty was chargeable on those instruments under article 28 (i). Schedule A to the Stamp Enactment, i.e., as if it were a conveyance of sale for purposes of stamp duty ad valorem.

This ruling is earlier in date than that of the Collector but was treated apparently as a ruling upon a reference by the Collector.

From that ruling the purchasers preferred an appeal to Mr. Justice Prichard, who, by his judgment of the 31st December, affirmed the ruling of the Chief Revenue Authority.From that judgment the purchasers prefer an appeal to this Court.

Mr. Rix for the appellants took two points.The first was that the assessment was wrong, for the reason that the instrument was an agreement within Article 5 of Schedule A to the Enactment, and not a conveyance on sale within Article 28, and if an agreement, it was either exempt from stamp duty or bore the duty of 25 cents.

It must be observed as Lord Esher, M.R., said in Commissioners of Inland Revenue v. Angus 23 QBD 579, at page 589, to which I shall refer later,

"that when the legislature assume to impose a tax on the subject, they must do so in clear and distinct terms, if the matter remains in doubt, the subject, they must do so in clear and distinct terms, if the matter remains in doubt, the subject is entitled to judgment."

It must also be remembered that the "instrument" is liable to tax and not the "transaction" between the parties [see the judgment of Lord Esher