COMPANY LAW
| Companies not to pay stamp duty on increased capital: HC Sun, 24 Apr 2011 13:45:12 +0530 |
| The Delhi High Court has held that a company is not required to pay the stamp duty on the increased amount of its authorised share capital. A bench headed by Justice S Muralidhar said this while allowing the plea of S E Investments Ltd, which challenged the direction of the Registrar of Companies (ROC) seeking stamp duty on increased amount in authorised share capital. "In the absence of a specific provision that permits the levy of stamp duty on the increase in authorised share capital, it would not be open to the Respondents (ROC) to insist upon the S E Investments having to pay stamp duty for the increased authorised share capital," the court said. The court, however, made it clear that the company would not be entitled to refund of the amount which it had already paid as stamp duty. "This will however not enable the Petitioner to claim refund of any stamp duty paid earlier by it for increase in authorised share capital," the court added. S E Investments, a public limited company, was incorporated on March 5, 1992 with an authorised share capital of Rs 3.5 crore. In 2010, it increased its capital to Rs 125 crore. The company sought the opinion of ROC and contended that there is no provision in the Delhi Stamp Act to pay the duty on increase in the authorised share capital. However, the ROC directed the company to pay Rs 25 lakh as stamp duty, prompting S E Investments to move the court. "It is directed that the ROC will now proceed to accept the Petitioner's Form 5 and record the increased authorised share capital without insisting on the Petitioner paying stamp duty thereon," the court further added. |
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