Maharashtra Stamp Authorities Have No Jurisdiction Over NCLT Chennai Order: Bombay High Court

The Bombay High Court on 18 February held that Maharashtra stamp authorities have no jurisdiction to assess stamp duty on an order passed by the NCLT, Chennai Bench, merely because the same scheme was also sanctioned by the NCLT, Mumbai Bench.

A Single-Judge Bench of Justice Sharmila U. Deshmukh clarified that even if stamp duty had not been paid on the Chennai order, that question falls within the domain of authorities in Tamil Nadu and is irrelevant to the assessment of the Mumbai order.

The Court observed:

“Even accepting that the order of sanction of scheme of NCLT Chennai bench has not been lodged for adjudication in Chennai and there is no payment of stamp duty, the stamp authorities in Mumbai would not have the jurisdiction to assess the stamp duty on the NCLT, Chennai order as it is not an order which is originating in Maharashtra.”

The dispute arose from a composite scheme under Section 230 of the Companies Act involving the amalgamation of INA Bearings India Pvt. Ltd. and LuK India Pvt. Ltd. with Schaeffler India Ltd.

The Chennai Bench of the NCLT had sanctioned the scheme on 13 June 2018 in respect of LuK India, while the Mumbai Bench sanctioned the same scheme on 8 October 2018 concerning INA Bearings and the petitioner. The Mumbai order was lodged for adjudication on 27 November 2018.

By orders on 25 March 2019 and 12 September 2022, the stamp authorities assessed duty separately on both mergers. The state revenue authority argued that since stamp duty had not been paid on the Chennai order, Maharashtra could levy duty, treating the scheme as comprising distinct matters.

Rejecting this contention, the High Court held that even assuming duty had not been paid in Chennai, Maharashtra authorities had no jurisdiction to assess stamp duty on the NCLT, Chennai order, as it did not originate in the State.

Justice Deshmukh stated that Section 19 of the Stamp Act would apply only if an instrument executed outside Maharashtra was received within the State, and mere reference to the Chennai order in the Mumbai order did not amount to its receipt. She wrote:

“As the order of the NCLT, Chennai bench has not been received in Maharashtra, the mere reference to the same in the NCLT Mumbai order would not amount to that instrument of NCLT Chennai being brought in the State of Maharashtra.”

Accordingly, the Court quashed the impugned orders and directed refund of Rs. 25 crores excess stamp duty to the petitioner.

For Petitioner: Advocates Nikhil Sakhardande, Dhaval Shethia, Nafisa Khandeparkar, Mrudula Dixit i/b AZB & Partners