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2017 (9) TMI 1047 - HC - VAT and Sales TaxJurisdiction - sale of a going concern - exemption u/s 2(41) of the TNVAT Act, 2006 and the CST Act, 1956 - Held that - The effect of the slump sale agreement dated 05 October, 2009, and the question relating to the acceptance of the unregistered slump sale agreement by the Income Tax Department are all matters to be considered on facts. The appellant miserably failed to plead and prove that the issue revolves on the jurisdictional matter alone and the same does not require adjudication by the appellate authority. There are no grounds made out by the appellant to bypass the statutory remedy available - petition dismissed being not maintainable.
Issues:
1. Interpretation of tax liability on the sale of a going concern under relevant tax acts. 2. Jurisdictional challenge regarding the liability for tax under the Tamil Nadu Value Added Tax Act, 2006. 3. Applicability of exemption provisions under the Income Tax Act, 1961 and the Tamil Nadu Value Added Tax Act, 2006. 4. Assessment of tax on the disposal of Wind Mill division as a whole. 5. Proper forum for adjudication of the dispute - Writ Court or appellate authority. Analysis: 1. The appellant contended that the sale of the Wind Mill division as a going concern should be exempt from tax liability under relevant tax acts. The respondent issued a notice proposing tax on the income generated from the disposal. The appellant challenged the assessment order before the Writ Court, arguing for exemption under Section 2(41) of the Tamil Nadu Value Added Tax Act, 2006 and the Central Sales Tax Act, 1956. 2. The jurisdictional challenge raised by the appellant regarding the liability for tax under the Tamil Nadu Value Added Tax Act, 2006 was dismissed by the learned Single Judge. The Judge emphasized that the nature of the transaction and the acceptance of the slump sale agreement by the Income Tax Department needed consideration. The appellant failed to prove that the issue was solely jurisdictional, warranting bypassing the statutory remedy available. 3. The appellant also claimed exemption under Section 2(42C) of the Income Tax Act, 1961 and Explanation III to Section 2(41) of the Tamil Nadu Value Added Tax Act, 2006. The appellant's argument centered on whether the closure of the Wind Mill division constituted a transfer of the business as a whole eligible for deduction, posing a question of law for the Writ Court's consideration. 4. The assessment order determining tax and penalty on the disposal of the Wind Mill division as a whole was challenged in the intra-Court appeal. The appellant's failure to raise jurisdictional issues before submitting to the assessing authority was highlighted. The Court emphasized that the proper forum for adjudication of facts was the appellate authority, not the Writ Court. 5. The learned Single Judge concluded that the issue required factual adjudication and dismissed the Writ Petition, noting that the appellant did not establish grounds to bypass the statutory remedy available. The appeal was subsequently dismissed by the High Court, affirming the Single Judge's decision. The Court found no reason to deviate from the judgment and closed the matter without costs.
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