CHENNAI: The Madras High Court has ruled that the state government can charge stamp duty on registration of merger of companies which has been approved by courts or tribunals. However, the first bench of Chief Justice SV Gangapurwala and Justice D Bharatha Chakravarthy said that if the duty has been paid in other states, it will have to be adjusted against the value calculated here.
The bench issued the order recently on a batch of appeals and petitions filed by Tamil Nadu government and few companies.
Upholding a 2020 G.O. in this regard, the bench said, “The authorities will be entitled to collect the stamp duty by calculating 2% of the market value of the immoveable property and excess duty, if any collected, shall stand refunded to the writ petitioners.”
“The stamp duty, if any paid, while presenting the order/scheme relating to amalgamation in other states shall be taken into account, while calculating the stamp duty payable in Tamil Nadu and after setting off the amount already paid. Only the balance amount, if any, alone can be demanded,” it said in the order.
Companies including Serene Estate Private Limited challenged the executive orders issued by the state government demanding payment of stamp duty for registration of scheme of amalgamation or restructuring of a company as per orders of a court or tribunal.
The companies challenged the powers of the state government to fix the stamp duty through executive orders without amending the original Act on levy of such duty.