Aparajita Srivastava
In a significant decision in SE Investments v Union of India, the Delhi High Court has held that in the absence of a specific provision in the Indian Stamp Act (Delhi amendment) providing for charging of stamp duty on increase in the authorized share capital of a company, no stamp duty can be levied on such increase.The Court has drawn a distinction between the Delhi amendment and other state amendments to the Indian Stamp Act,1899. Whereas the state amendments to the Indian Stamp Act, 1899, for states other than Delhi (such as Rajasthan, Madhaya Pradesh and Andhra Pradesh) specifically provide for levy of stamp duty in case of increase in authorized share capital of a company, Article 10 of Schedule 1A of the Indian Stamp Act (Delhi Amendment) only provides for levy of stamp duty (a) where the authorized share capital of the company does not exceed Rs. 1 lac (b) in other cases. Here, the phrase “in other cases” cannot be interpreted to include increase in authorised share capital of a company.Thus, the Court has held that as per the Delhi amendment of the Indian Stamp Act,1899 no stamp duty can be charged on increase in authorized share capital for a company registered in Delhi.The Court also points out an important feature of the stamp legislation, which is often ignored. The Stamp Act(s) is a fiscal legislation and must necessarily construed strictly and what is not covered cannot be included.
PXV Law Partners 