New Delhi, Nov 8 (UNI) The Delhi High Court ruled in favour of Ambuja Cement Limited and overturned a show cause notice and an order of Collector of Stamps, Delhi that demanded ₹218.87 crores in stamp duty and Rs 69 crore as penalty.
The court quashed the stamp duty charges and penalty against Ambuja Cement.
Justice Sudhir Kumar Jain quashed an order of the Collector of Stamps, Delhi, demanding payment of INR 218,87,81,917.26 towards stamp duty and INR 69 crores as penalty from Ambuja Cements Ltd., in a case related to a scheme of arrangement involving Holcim (India) Pvt. Ltd.
The High Court said that the petitioner and ACIPL were wholly owned subsidiaries of a common parent company – Holderind and therefore, the scheme of amalgamation and the merger order are squarely covered under the Notification of December 25, 1937, which exempts the said instruments from payment of stamp duty.
The Court said, “ present petition is allowed and the show-cause notice issued on March 20, 2014, and by order passed on August 07, 2014, issued by the respondent are quashed and set aside along with all consequential proceedings.
The Court said, that the present petition stands disposed of along with the pending application.
The High Court said that it had earlier in the case of Delhi Towers Ltd. observed that the Notification of December 25, 1937, issued by the Central Government is applicable and binding.
Accordingly, the argument advanced by the Standing Counsel for the respondent that the Notification of December 25, 1937, has been repealed and is not applicable, does not have any legal force and was rejected.
The Court noted that the petitioner and ACIPL were wholly owned subsidiaries of a common parent company – Holderind and therefore, the scheme of amalgamation and the merger order are squarely covered under the Notification issued on December 25, 1937, which exempts the said instruments from payment of stamp duty.
The present petition is allowed because of the above discussion and accordingly, the show-cause notice dated March 20, 2014, and the order passed August 07, 2014 issued by the respondent is
quashed and set aside along with all consequential proceedings.
The present petition stands disposed of along with pending Application, the High Court said.
Senior Advocate Sudhanshu Batra, with Advocates Vijay Kumar Singh, Adhip Ray, Shashwat Singh, Simran Sakunia and Simran Jeet appeared on behalf of Ambuja Cement Ltd.
Standing Counsel Santosh Kumar Tripathi, with Advocates Divyam Nandrajog, Ms Surbhi Soni and Rishabh Srivastava for collector of stamps of Delhi.
The matter pertains to the case that Holcim (India) Private Limited incorporated under the Companies Act,1956 and is a wholly owned subsidiary of Holderind Investments Ltd., Mauritius.
Ambuja Cements India Private Limited (ACIPL) was incorporated under the Companies Act as an investment Company and did not undertake any business. ACIPL was a 100% Subsidiary of Holderind which held 55% shares of ACIPL directly and the remaining 45% shares were held by the petitioner.
The Boards of Directors of the petitioner and ACIPL approved a scheme of amalgamation between these two companies on April 03, 2009, and September 04, 2009, ACIPL was proposed to be merged into the petitioner.
Thereafter an application under sections 391 to 394 of the Companies Act, 1956 was filed for sanction of the scheme of amalgamation.
ACIPL did not have any immovable property at that time and the only movable property held by ACIPL was its shareholding in ACC Limited (hereinafter referred to as “ACC”) and Ambuja Cements Limited (ACL) in dematerialized form.
A Coordinate Bench of the Delhi High Court approved the merger of ACIPL into the petitioner on November 14, 2011, as “the merger order”.
The merger order was filed with the Registrar of Companies, Delhi and Haryana on February 07, 2011 and the merger came into effect on January 06, 2012.
The petitioner in a meeting held on November 30, 2012, issued 353,84,08,355equity shares to the shareholders of ACIPL under the share exchange ratio and ACIPL was dissolved without winding up.
The Board of Directors also authorized the issuance of a share certificate to Holderind under the common seal of the petitioner which was issued under the common seal of the petitioner and signed by two Directors and the Company Secretary of the petitioner in Haryana.
The requisite stamp duty as per the Indian Stamp Act, 1899 as applicable to the State of Haryana was also affixed to the share certificate at Haryana.
The present petition was filed on behalf of the petitioner under Articles 226 and 227 of the Constitution for quashing the order on August 07, 2014, by the respondent along with consequential proceedings and for restraining the respondent from taking any coercive action against the petitioner.
The petitioner prayed that the order issued should be struck down and the Respondent should be directed not to take any coercive steps against the Petitioner, its Directors, officials, representatives etc.
The petitioner requested to restrain the Respondent from taking any further coercive action(s) or initiating any proceedings according to, the Order against the Petitioner, its Directors,officials, representatives etc and to grant costs.
