JUDGMENT : A Scheme of Amalgamation of one M/s. Usman Paper Mills with the petitioner company was sanctioned under Sections 391 and 394 of the Companies Act, 1956 by the Company Court by common order dated 29th October, 2004 passed in Company Petition No.04 of 2004 and Company Petition No.05 of 2004. In view of definition of “conveyance” in Section 2(g)(iv) of the Bombay Stamp Act, 1958 (now the Gujarat Stamp Act, 1958), the order was liable to payment of stamp duty, in respect of the properties and assets of transferor company conveyed to and in the name of transferee company, as per Article 20(c) of the Schedule I to the Act. Copy of order was presented before the stamp authority for payment of stamp duty. The stamp authorities took view that the same was presented after period of one year contemplated under Section 40 of the Stamp Act. 2. The Collector and Superintendent of Stamps by his order dated 03rd July, 2008 required the petitioner to pay deficit stamp duty amount of Rs.05,89,340/- under Article 20(d) and Rs.01,00,000/- towards penalty under Section 39(1)(b) of the Act. Petitioner's Revision thereagainst filed under Section 53(1) of the Act was also dismissed. 2.1 The petitioner company has thus impugned by filing the present petition, the aforementioned order dated 16th June, 2010 passed in Revision Application No.41 of 2008 by the Chief Controlling Revenue Authority-respondent herein, together with aforesaid order dated 03rd July, 2008 of Collector and Superintendent of Stamps. 3. The relevant facts shall be in a nutshell. The aforesaid order of amalgamation dated 29th October, 2004 in the Company Petitions was made subject to the requisite orders by the Board of Industrial & Financial Reconstruction (BIFR). The certified copy was received on 11th January, 2005. The BIFR granted sanction on 07th June, 2005. The order was presented for stamp duty on 17/23rd February, 2006. 3.1 The relevant paras from the aforesaid order dated 29th October, 2004 sanctioning the Scheme of Arrangement in the nature of Amalgamation under Section 301 with Section 394 of the Companies Act are reproduced with relevance. “.... learned Addl. Central Government Standing Counsel appearing on behalf of the Central Government and Mr. Pranav. G. Desai, learned Advocate appearing on behalf of Dena Bank. 3. Both the Transferor and the Transferee Companies belong to the same group of management. Both are Private Limited Companies. “.... learned Addl. Central Government Standing Counsel appearing on behalf of the Central Government and Mr. Pranav. G. Desai, learned Advocate appearing on behalf of Dena Bank. 3. Both the Transferor and the Transferee Companies belong to the same group of management. Both are Private Limited Companies. The meetings of the Shareholders of both the Companies and the Creditors of the Transferor Company were dispensed with in view of the consent letters obtained from the Shareholders and the Secured and Unsecured Creditors, approving the Scheme, having been placed on record vide order dated 26/12/2003 in Company Application Nos. 599 & 600 of 2003. 4. After the petitions were admitted the same were duly advertised in Newspapers "Indian Express" (English Daily)-Vadodara Edition and "Gujarat Mitra" (Gujarati Daily)-Surat Edition, on 24/03/2004. The publication in Government Gazette was dispensed with as directed in order dated 11/3/2004. No one has come forward with any objections to the petitions even after publication of the advertisement. 5. Notice of admission of petition of Transferor Company was served on Official Liquidator attached to the High Court of Gujarat. He has placed on record report dated 13/09/2004 along with report of Auditors appointed for the purpose of scrutiny and investigation. The report states that the affairs of the Transferor Company have not been conducted in any manner prejudicial to the interest of Members of the Company or the public interest. 6. Notice of admission of petition of the Transferee Company has also been served on the Central Government and Smt. P.J. Davawala, learned Addl. Central Government Standing Counsel appears for the Central Government. She has placed on record letter dated 20/09/2004 received from the Registrar of Companies, Gujarat along with communication dated 08/09/2004 from the Regional Director indicating that the Transferor Company is a sick Company, registered with Board For Industrial & Financial Reconstruction under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 on 12/06/2002 and hence, permission of BIFR may be necessary for proposing above amalgamation. It is further submitted that the Central Government has decided that after bringing the aforesaid fact to the notice of the Hon'ble High Court the matter may be left to the Hon'ble High Court to be decided on merits” (Para 6) “As can be seen from the Minutes of The Joint Meeting the Transferor Company submitted Draft Rehabilitation Scheme in terms of the orders passed by the Bench of BIFR on 16/09/2003 and at the meeting the Secured Creditors viz. Dena Bank, Regional Office, Surat, GSFC, Gandhinagar and GIIC, Surat were represented. As recorded in the Minutes the Transferor Company has entered into one time settlement with all the three Secured Creditors for the amounts mentioned in the Minutes. Furthermore, in the same Minutes it is recorded that the revised DRS, whereunder the Transferor Company is to amalgamate with Transferee Company, has been consented to by the Secured Creditors. It is further recorded in the Minutes that the advantages that would flow on the Scheme of Amalgamation being sanctioned are: "(a) Once the amalgamation takes place, the applicant unit will become part of the Bio-deal Laboratories Pvt. Ltd. which is growing and profitable company. Thus, the applicant company will have immense benefits and can go for future up-gradation and expansion. This will result in to increase in production which will expedite the turnaround of the company make the unit viable at much early stage than envisaged in the scheme. (b) Bio-deal Laboratories Pvt. Ltd., consumes large quantity of corrugated boxes, which amounts to forward integration for USMPL and thus, has a strong synergy for both the companies. (c) Bio-deal Laboratories Pvt. Ltd. will be able to get the benefits of carry forward loss of the applicant company and thus it will be able to save sizeable amount by way of tax which will in turn further help in revival of the applicant unit. (d) Once Usman Paper Mills Pvt. Ltd. is taken over as going concern by way of amalgamation, the paper mill will be operated for three shifts which will also assure additional turnover and it will also contribute by way of higher excise duties and sales-tax to the ex-chequer of the Govt. of India/Gujarat". (d) Once Usman Paper Mills Pvt. Ltd. is taken over as going concern by way of amalgamation, the paper mill will be operated for three shifts which will also assure additional turnover and it will also contribute by way of higher excise duties and sales-tax to the ex-chequer of the Govt. of India/Gujarat". The minutes further record that "it was decided to submit the minutes of the meeting to BIFR with due recommendation for acceptance of DRS as submitted by the Company".” (Para 8) (emphasis for the present case) “No other objections are raised by anybody. In view of the aforesaid fact situation it is apparent that the amalgamation would be in the interest of the Companies, their Members and their Creditors. There is no reason to withhold sanction to the Scheme of Amalgamation. Prayers in terms of paragraph No.15.(a) of Company Petition No.5 of 2004 and Company Petition No.4 of 2004 are hereby granted to the effect that arrangement embodied in the Scheme (Annexure-C) is hereby sanctioned so as to be binding on all Members, Shareholders and other persons concerned under the Scheme of Compromise with effect from the appointed date.” (Para 9) “As already recorded in the Minutes of the Meeting held on 10/09/2004, the petitioner Company shall submit the Minutes of the said Meeting through the lead institution and this order shall be subject to the requisite orders of sanction by BIFR.” (Para 10) (emphasis for the present case) 4. Heard learned advocate Mr. Gaurang Bhatt and learned Assistant Government Pleader Ms. Jyoti Bhatt. 5. Having a useful glance over the statutory provisions relevant to the issue, Section 2(g)(iv) of the Act is as under. “2. Definitions (g) "Conveyance" includes.- (iv) every order made by the High Court under Section 394 of the Companies Act, 1956 in respect of reconstruction or amalgamation of companies, or by which property, whether movable or immovable, or any estate or interest in any property is transferred to, or vested in, any other person, inter vivos, and which is not otherwise specifically provided for by Schedule I; Explanation:- For the purposes of this clause, an instrument whereby a co-owner of any property transfers his interest to another co-owner of the property and which is not an instrument of partition, shall be deemed to be an instrument by which the property is transferred inter vivos.” 5.1 Section 39(1)(b) is extracted hereinbelow. “39. “39. Collector's power to stamp instruments impounded (1) … … … (b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees; or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion therefore, whether such amount exceeds or falls short of five rupees : Provided that, when such instrument has been impounded only because it has been written in contravention of section 13 or section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section.” 5.2 Section 40 relied on by the stamp authorities for contending period of one year reads as under. “40. Instruments unduly stamped by accident - If any instrument chargeable with duty and not duly stamped, not being an instrument chargeable with a duty of twenty naye paise or less is produced by any person of his own motion before the Collector within one year from the date of its execution or first execution, and such person brings to the notice of the Collector the fact that such instrument is not duly stamped and offers to pay to the Collector the amount of the proper duty, or the amount required to make up the same, and the Collector is satisfied that the omission to duly stamp such instrument has been occasioned by accident, mistake or urgent necessity he may instead of proceeding under section 33 and 39, receive such amount and proceed as next hereinafter prescribed.” 6. Recapitulating the facts and the dates, the order of amalgamation by the Company Court came to be passed on 29th October, 2004. The same was, as noted above, subject to the requisite orders of sanction to be passed by the BIFR. Certified copy became available to the petitioner on 11th January, 2005, however since the implementation of the order was conditional on the approval of BIFR, the same was presented before the said authority. BIFR accorded sanction to the Scheme of Amalgamation in BIFR Case No.264 of 2002 on 07th June, 2005. Certified copy became available to the petitioner on 11th January, 2005, however since the implementation of the order was conditional on the approval of BIFR, the same was presented before the said authority. BIFR accorded sanction to the Scheme of Amalgamation in BIFR Case No.264 of 2002 on 07th June, 2005. The petitioner submitted the order of this Court along with copy of the Scheme of Amalgamation and other requisite documents before the Superintendent of Stamps for the purpose of payment of stamp duty on 17/23rd February, 2006. The said presentation was within one year from the date of order of BIFR. The stamp authorities took a stand that one year was to be counted from the date of Company Court's order, and proceeded to pass the impugned orders. 6.1 It was impermissible for the stamp authorities to issue notice under Section 39(1)(b) of the Act and ultimately passing order directing the petitioner to make payment of deficit stamp duty and penalty on the ground that the aforesaid order dated 29th October, 2004 in Company Petition No.04 of 2004 and Company Petition No.05 of 2004 was not presented for the purpose of stamp duty within one year therefrom. The period of one year for the purpose of applying the said time limit under Section 40 was counted erroneously, especially when the order of sanctioning the Scheme of Amalgamation was subject to the approval to be granted by the BIFR. The order and the Scheme sanctioned thereunder was to come into force at a later date only upon sanction being accorded by the BIFR which was accorded on 07th June, 2005. Period of one year shall have to be reckoned from the said date of sanction by BIFR. 6.2 When the order under Section 394 of the Companies Act sanctioning the Scheme of Amalgamation is made chargeable to duty, levy of duty is not on the order as such, but it is on the effect of the order, that is transfer of properties and assets of the transferor company to the transferee company envisaged under the Scheme. The said transfer took effect only upon sanction granted by the BIFR which was a condition mentioned in the order of the Company Court. In other words, the properties/assets can be said to have been “transferred” or “conveyed” when BIFR granted sanction. The said transfer took effect only upon sanction granted by the BIFR which was a condition mentioned in the order of the Company Court. In other words, the properties/assets can be said to have been “transferred” or “conveyed” when BIFR granted sanction. The “conveyance” within the meaning of Section 2(g)(iv) can be said to have been created at such point of time when the BIFR granted sanction. Therefore it is the said date and not the date of the order of the Company Court. In the facts and circumstances of the case, would bring the subject matter within the ambit of Section 2(g)(iv) to become the conveyance. Such “conveyance” was presented within one year as above for the purpose of stamp duty, the same was therefore regularly presented. 7. The impugned orders taking view that stamp duty and penalty was payable as presentation was not within one year from the date of the order of the Company Court are not liable to be sustained. They are therefore hereby quashed and set aside. 8. It appears from order dated 28th January, 2011 in the petition that petitioner had paid 25% of the total amount at the time of preferring Appeal before the Chief Controlling Revenue Authority and had also paid remaining 75% subsequently under protest. As the impugned orders are set aside, consequences including refund of the said amount to the petitioner, shall follow. 9. Rule is made absolute accordingly.