| Headnote |
Bombay Stamp Act, 1958 – s.2(l), Article 10 of Schedule-I – “instrument” – Companies Act, 1956 – ss. 97, 31(2) – Articles of Association, an instrument within the meaning of s.2(l), Stamp Act and mentioned in Article 10 of Schedule-I, where stamp duty is to be charged on increase in the share capital of a company subject to the maximum cap – Respondent increased its share capital to Rs.600 crores and paid stamp duty as per Article 10 of Schedule-I, Stamp Act – Article 10 was amended and a maximum cap of Rs.25 lakhs on stamp duty was introduced – Respondent subsequently increased its share capital to Rs.1200 crores and paid Rs.25 lakhs as stamp duty when it filed Notice in Form No.5, pursuant to s.97, Companies Act – However, later it sought refund of the same – Denial by appellant no.2 – High Court directed appellants to refund Stamp Duty of Rs.25 lakhs with interest – Correctness: Held: Filing of Form No. 5 is only a method prescribed, whereby “notice” of increase in share capital or of members of a company has to be sent to the Registrar, within 30 days of passing of such resolution – Registrar then has to record such increase in share capital or members, and carry out the necessary alterations in the articles – Stamp Duty is affixed on Form No. 5 as a matter of practical convenience because a company itself cannot carry out the alterations and record the increase in share capital in its Articles of Association – It is only the articles which are an instrument within the meaning of s.2(l) of the Stamp Act and accordingly mentioned in Article 10 of Schedule-I of the Stamp Act – Legislature has specifically mentioned Articles of Association in Article 10 of Schedule-I of the Stamp Act, where stamp duty is to be charged inter alia on increase in the share capital of a company – Thus, in spite of s.31(2) of the Companies Act, stamp duty will be payable on increased share capital – This is however subject to the maximum, i.e., Rs. 25 lakhs – If there is no specific provision for charging the increase, then no stamp duty is payable for any increase in the share capital of a company – Ceiling of Rs. 25 lakhs is applicable on Articles of Association and the increased share capital therein, not on every increase individually – In case stamp duty equivalent to or more than the cap has already been paid, no further stamp duty can be levied – Further, argument of the appellant that stamp duty paid before the 2015 amendment cannot be taken into account, not agreed with – It is true that the amendment does not have retrospective effect, however since the instrument ‘Articles of Association’ remained the same and the increase was initiated by the respondent after the cap was introduced, the duty already paid on the same very instrument will have to be considered – It is not a fresh instrument which had been brought to be stamped, but only the increase in share capital in the original document, which was specifically made chargeable by the Legislation – Impugned order upheld – Maharashtra Stamp (Amendment) Act, 2015. [Paras 9, 13, 15, 18, 19] Bombay Stamp Act, 1958 – s.14A – Companies Act, 1956 – s.31(2) – Relying on s.14A of the Stamp Act, the appellant contended that any material or substantial alteration in the character of an instrument requires a fresh stamp duty according to its altered character:Held: s.31(2) was introduced with the intention to confer validity on any alterations to the articles as if they were originally contained therein – Therefore, any increase in the share capital of the company also shall be valid as if it were originally there when the Articles of Association were first stamped – There is no concept of a company having new Articles of Association – Thus, s. 14A of the Stamp Act would not be of any help to the appellants. [Para 12]Interpretation of Statutes – Conflict between general law and special law – Bombay Stamp Act, 1958 – Companies Act, 1956: Held: In case of conflict between two laws, the general law must give way to the special law – A conjoined reading of the Stamp Act and the Companies Act shows that while the former governs the payment of stamp duty for all manner of instruments, the latter deals with all aspects relating to companies and other similar associations – Present case concerns with an instrument which is chargeable to Stamp Duty and finds its origin in the Companies Act – Various provisions of the Companies Act provide the purpose and scope of the instrument – Thus, the Companies Act is the special law and the Stamp Act is the general law with regards to Articles of Association, and the special will override the general. [Para 11] |
