Additional stamp duty not payable on increase in authorized share capital in Delhi

Additional stamp duty on increase in authorized share capital not payable in accordance with Article 10 of the Schedule IA of the Indian Stamp (Delhi Amendment) Act, 2007

S E Investments Limited Vs Union of India and Others -The Delhi High Court held that there is no provision for charging stamp duty on the increase in authorized stamp duty in Stamp Act. A statute authorising the levy of stamp duty is in the nature of a fiscal statute, hence stamp duty cannot be levied except by the authority of law. The High Court placed reliance on the Supreme Court of India judgment in the case of AV Fernandez vs. State of Kerala (AIR 1957 SC 657) and Commissioner of Wealth Tax, Gujarat-III, Ahmedabad vs. Ellis Bridge Gymkhana [(1998) 1 SCC 384, wherein the Supreme Court held that no one can be charged by implication or inference or analogy or by trying to probe into the intentions of the legislature and if a person has not been brought within the ambit of the charging section by clear words, he cannot be taxed at all.

The fact that the Petitioner earlier paid stamp duty when the authorised share capital was increased cannot act as an estoppel against the Petitioner. However, Court has clarified that the decision will not enable the Petitioner to claim refund of any stamp duty earlier paid by it for increase in authorised share capital.

IN THE HIGH COURT OF DELHI AT NEW DELHI

SUBJECT : INDIAN STAMP (DELHI AMENDMENT) ACT, 2007

W. P. (C) 2393/2010 & CM APPL 4794/2010 (for stay)

Reserved on: March 26, 2011

Decision on: April 21, 2011

S. E. INVESTMENTS LTD. versus UNION OF INDIA & ORS        

CORAM: JUSTICE S. MURALIDHAR