2021 (3) TMI 182 - HC - VAT and Sales Tax

Transfer of the assets of a firm on dissolution or a sale or not - HELD THAT - In the instant case, the Assessing Officer noted that at the time of check of accounts, there was no mention of any dissolution agreement and taking up the goods worth ₹ 32,45,350/- by one partner and even during the existence of the firm M/s.S.S.Fabs, one of the partner Thiru B.Salam has obtained a Registration Certificate under the TNGST Act and under the CST Act and the Assessing Officer also noted that he has been doing business in the same commodity in the same address and the Registration Certificate is valid from 20.07.2000. Further, the Assessing Officer has also recorded the statement of the assessee, which was during the course of enquiry and it has been candidly admitted that there has been no transfer of stock. The Tribunal, without examining the factual issue, dismissed the Revenue's appeal, which is not sustainable - the Appellate Tribunal committed an error in dismissing the Revenue's appeal without examining the factual position. Tax Case Revision is allowed.

Summary

Issues:
Challenging order of Tamil Nadu Sales Tax Appellate Tribunal under Section 38 of Tamil Nadu General Sales Tax Act, 1959.

Analysis:
1. The Department filed a Tax Case Revision against the Tribunal's order, raising substantial questions of law regarding the nature of the transaction in question.
2. The Tribunal dismissed the Revenue's appeal, ruling that the transaction was a transfer of assets on dissolution, not a sale in the regular course of business.
3. The Assessing Officer's findings contradicted the Tribunal's decision, highlighting discrepancies in the assessee's claims and actions.
4. The Tribunal failed to examine the factual issues adequately before dismissing the appeal, leading to an error in judgment.
5. The High Court allowed the Tax Case Revision, emphasizing the importance of factual examination in such cases and citing relevant precedents to support its decision.

This detailed analysis covers the issues involved in the legal judgment, the arguments presented by both parties, the Tribunal's decision, the Assessing Officer's findings, and the High Court's ultimate ruling, providing a comprehensive overview of the case.