Implications For Stamp Duty On Scheme Approved By Different High Courts

INTRODUCTION

It is a settled position in law that stamp duty is charged on 'the instrument' and not on 'the transaction' effected by 'the instrument'. Further, the Hon'ble Bombay High Court (the "BHC") in one of the landmark cases (Li Taka Pharmaceuticals Ltd. vs. State of Maharashtra and other 1996(4)BomCR100) held that "the amalgamation Scheme sanctioned by the Court would be an instrument within the meaning of Sec 2(l) of the Bombay Stamp Act".

Considering the fact that the stamp duty in India is a state subject, it has always been interesting to understand the implications of stamp duty on the order sanctioning a Scheme of Arrangement/ Amalgamation where such order has been passed by different courts, based on the registered office of the companies involved as part of the scheme.