- (1.)THE petitioners challenge the orders dated 28-7-1994, 15-5-1990 and 14-5-1995, passed by the respondents calling upon the petitioners to pay transfer fees in terms of the provisions of the Goa, Daman and Diu Excise Duty Act, 1964 ('the Act'), on account of amalgamation of Kesarval Breweries Ltd. with the petitioners' company. While the petitioners contend that the demand of transfer fees is arbitrary and illegal, it is the case of the respondents that pursuant to the amalgamation of Kesarval Breweries Ltd. with the petitioners' company there is a change of entity resulting in transfer of ownership.
(2.)THE challenge of the petitioners is three-fold: firstly, that the amalgamation of Kesarval Breweries Ltd. into the petitioners' company does not amount of transfer of ownership. Secondly, that the said Act does not empower the Government to issue the notification for payment of transfer fees and thirdly that the application for substitution of the name of the petitioner in place of that of Kesarval Breweries Ltd. was filed prior to the coming into force of the notification dated 9-3-1994, and, hence, the same cannot be enforced retrospectively. As regards the first ground of challenge, S. G. Dessai, the learned senior advocate arguing on behalf of the petitioners has submitted that the amalgamation of two companies into one company does not amount to transfer of shareholding considering the fact that the shareholding of the petitioners and that of the amalgamated company Kesarval Breweries Ltd. belonged to the same persons and, therefore, by virtue of amalgamation of the said company with the petitioner-company there has been no transfer of ownership of shareholding. It does not constitute a transfer of ownership from one owner to another. In support of this submission reliance is sought to be placed upon the decision of the Allahabad High Court in the matter of Delhi Cloth and General Mills Co. Ltd v. Union of India [1988] 36 ELT 486. On the other hand, M. S. Usgaonkar, the learned Advocate-General appearing for the respondents, has submitted that pursuant to the amalgamation of Kesarval Breweries Ltd. , with the petitioners' company, the transferor-company has ceased to exist and all its assets have been merged with the transferee-company. The transferee-company in the case in hand is the petitioners' company and, therefore, the respondents are lawfully entitled to demand the transfer fees consequent to the amalgamation. In support of his submissions reliance is placed upon the judgments of the Apex Court in the matter of Bacha F. Guzdarv, CIT[1955] 25 Comp. Cas. 1; AIR 1955 SC 74, Life Insurance Corpn. of India v. Escorts Ltd, AIR 1986 SC 1370, General Radio and Appliances Co. Ltd. v. M. A. Khader (Deed.) by Legal Representatives AIR 1986 SC 1218 and Saraswati Industrial Syndicate Ltd. v. CIT[l99l] 70 Comp. Cas. 184 (SC ).
(3.)THE Apex Court in Bacha F. Guzdar s case (supra) has held that the right of the shareholder to participate in the profits of the company may be readily conceded but it is not possible to accept the contention that the shareholder acquires interest in the assets of the company. It has been further held that the company is a juristic person and is distinct from the shareholders.