1951 (2) TMI 14 - HC - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of the Commercial Tax Officer to requisition books of accounts for sales tax assessment.
2. Interpretation of the term "transferee" under Section 17 of the Bengal Sales Tax Act.
3. Liability of a transferee for unpaid taxes of the transferor.
4. Effect of the repeal of Section 18 of the Sales Tax Act, 1941 on assessment of taxes.
5. Availability of remedies under the Act for registration, appeals, revision, and review.

Detailed Analysis:

1. The petitioner challenged the jurisdiction of the Commercial Tax Officer to requisition books of accounts for sales tax assessment. The petitioner argued that it was not a transferee as the assets and liabilities of the business had not been transferred to it. However, the court held that the petitioner had acquired the full rights in the business, including stock-in-trade, machinery, furniture, and goodwill, making it a transferee within the meaning of Section 17 of the Act. The court rejected the contention that the requisition acts were without jurisdiction and ultra vires.

2. The court interpreted the term "transferee" under Section 17 of the Act, stating that when the full rights in a business are transferred to another person, the latter becomes a transferee. The court emphasized that the petitioner had acquired all aspects of the business, making it a transferee and a "dealer" under the Act. The court dismissed the petitioner's argument that it was not a transferee due to certain assets and liabilities not being transferred.

3. The court addressed the petitioner's argument regarding the liability for unpaid taxes of the transferor. The petitioner contended that the tax payable should be assessed and outstanding at the time of transfer. However, the court held that once the liability to pay tax exists, the transferee is responsible for paying the tax, regardless of whether the amount has been ascertained or not. The court emphasized that the petitioner's registration as a transferee and dealer remained valid, imposing the liability to pay taxes.

4. Regarding the repeal of Section 18 of the Sales Tax Act, 1941, the court explained that the Commissioner could delegate powers under Section 15 of the Act, including functions previously under Section 18. The court highlighted that provisions for registration, appeals, revision, and review were available under the Act, ensuring an adequate remedy despite the repeal of Section 18. The court dismissed the petitioner's argument that the repeal left them without a remedy.

5. The court concluded that the petitioner had described itself as a transferee and was registered as a dealer, with no refusal to exercise jurisdiction or excess of jurisdiction. The court deemed the application as misconceived, leading to the dismissal of the petition with costs. The court discharged the Rule, emphasizing the availability of remedies under the Act for registration, appeals, revision, and review.