The principle that stamp duty is chargeable on Court order is once again affirmed and also extended in the case of inter-state amalgamations. However, separate stamp duty payments on both Court orders and the disallowance of set-off of stamp duty will have huge cost implications involving inter-state amalgamations. This judgment should have been progressive, clarifying that although there are two court orders, the scheme is one and the same. However, unless the scheme is approved by both the High Courts, it does not transfer and vest the property in the transferee company.
Therefore, the scheme should comprise orders of both the Courts. In the scenario of a scheme not meeting the approval of another High Court, there is uncertainty about the payment of stamp duty on the unilateral order passed by the other High Court. There is a need to bring in an amendment to stamp laws for providing set-off of duty paid in the larger interest of the economy. If not, such disallowances would burden parties with needless constraints of costs in merger activities.