The full bench of the Bombay High Court has held that two orders of two different High Courts pertaining to the same scheme of amalgamation are independently different instruments, since the said orders of the High Courts are upon two different petitions by two different companies. In this regard, the Court has observed that the scheme of the legislation is based on chargeability on instrument and not on transactions. The Court hence found it immaterial to examine whether the document pertained to one and the same transaction. It was held that what is relevant for purposes of payment of stamp duty is the court order, which represents the ‘instrument’, and not the scheme.
The Court also considered the question whether the orders of the court by virtue of being related to a common scheme of amalgamation are incidental in nature and whether it is sufficient to stamp the ‘principal instrument’, being the order of the Gujarat High Court. The said argument was not accepted by the Court on account of the fact that Section 4 of the Bombay Stamp Act which deals with incidental instruments is specific only to some types of agreements such as development agreement, sale, mortgage or settlement.
Another question that came up for discussion was whether in terms of Section 19 of the Bombay Stamp Act, 1958 wherein a document executed outside a State is subsequently brought into the State, stamp duty would have to be paid on that instrument after giving appropriate credit to duty that has already been paid in another state. Since the Court had already concluded that an amalgamation comprises two court orders, it was held that what was relevant for purposes of considering the stamp duty liability in Maharashtra was the order of the Bombay High Court. The Court in this regard held that since the order of court was signed in Maharashtra, it was ‘executed’ within the State, due to which the provisions of Section 19 would not apply.