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TMI Blog1962 (4) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... the said partnership firm to the applicant. On 23rd October, 1955, the said partnership firm entered into an agreement with the applicant, wherein in satisfaction of the aforesaid loan of Rs. 32.000 and odd, the partnership sold the goodwill of its aforesaid business and the right to use its 10 bidi label marks. The partners further agreed that they would not in future use the 10 bidi label marks in their business, or do any business or start any work at Sholapur. Prior to the date of transfer, the Sales Tax Officer had assessed the partnership firm to sales tax for the period 1st April, 1953 to 31st March, 1954, and 1st April, 1954, to 31st March, 1955, by his orders dated 30th September, 1955, and 27th June, 1955, respectively. The tax l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid partnership firm. This contention failed before the Tribunal. The Tribunal, however, modified the order of the Sales Tax Officer by substituting the following sentence for the last sentence in the order of the Sales Tax Officer reproduced above: "Therefore the liability to pay all the dues payable in respect of the business and remaining unpaid at the time of the transfer." On an application made by the applicant under section 34(1), the Tribunal has drawn up a statement of the case and referred to us the following question: "Whether on the facts and in the circumstances of the case the applicants are liable as transferees under section 26(1) of the Bombay Sales Tax Act, 1953?" Mr. Pandit, appearing for the applicant, contends tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivision Bench of this Court on 6th February, 1952. The answer to the question referred to us, in our opinion, would turn on the determination of the question whether transfer of a goodwill of a business along with the right to use certain unregistered trade marks in the business would by itself tantamount to transfer of the entire business. It is not in dispute that to hold the transferee of a business liable to pay tax payable by the transferor at the date of the transfer, it must be established that the transfer of a business owned by a dealer was in its entirety. A dealer has been defined in sub-section (6) of section 2 of the Act, and it means "any person who carries on the business of selling goods in the State of Bombay". It has the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... These observations have been cited with approval by their Lordships of the Supreme Court in M/s. S.C. Cambatta Co. Private Ltd., Bombay v. Commissioner of Excess Profits Tax, Bombay[1961] 41 I.T.R. 500; [1961] 2 S.C.R. 805 at p. 809. It would thus be seen that the goodwill is a totality of advantage attached to a business. It necessarily follows that goodwill cannot be equated with the business itself. Similar appears to be the position in respect of a right in trade mark also. In Appeal No. 95 of 1951. decided on 6th February, 1952, the learned Chief Justice, delivering the judgment of the Court, observed: "In India, as in England, an unregistered trade mark was not transferable, and therefore the view was taken in England that a trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been transferred or that that the trade marks alone are transferred; but both the goodwill and the trade marks have been transferred. But even then, both these things taken together cannot amount to the entire business of a trader, and the transfer of these two things, namely, goodwill and the trade marks, by themselves, without there being any other evidence, would not amount to the transfer of the entire business. In the case before us, no evidence has been tendered to show that there was any other factor in the agreement between the said partnership and the applicant which would lead to an inference that the entire business had been transferred. The judgment of the Sales Tax Tribunal would show that one of the contentions raised on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling goods in the State of Maharashtra. A person carrying on the business of selling goods would naturally be in possession of goods which he sells in course of business. A party desirous of establishing something which is contrary to the normal state of affairs of a business would naturally be expected to establish those facts. The Tribunal, therefore. in our view, was not justified in inferring that there were no other assets except goodwill and the rights in unregistered trade marks. The learned Advocate-General argued that the fact that there is no stock-in-trade would not be sufficient to hold that the business did not exist. There may be business at a given point of time though there be no stock-in-trade. For instance, he stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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