9911796707
TMI Blog1965 (1) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Tax. 2.. The material facts are that one Mohanlal Sodhani and his son Harprasad Sodhani, used to carry on business as paper merchants under the name and style of "M/s. Rajasthan Paper Mart, Jabalpur". The Mart used to purchase from time to time stationery goods, paper etc. from the petitioner who also carries on business of selling stationery and allied materials under the name and style of "M/s. Bharat Paper Mart, Jabalpur". On 9th April, 1960, there was a settlement of accounts between the petitioner and the Mart as a result of which it was found that an amount of Rs. 3,101-71 nP. was due to the petitioner from the Mart. The petitioner also claimed interest on this sum amounting to Rs. 1,348-29 nP. On 9th April, 1960, the Mart had also to pay Rs. 90 as rent for the premises in which it had stocked its goods, as also a sum of Rs. 768 to M/s. Jupiter Traders for the paper purchased from them. In order to discharge these liabilities Mohanlal Sodhani and Harprasad Sodhani decided to sell the goods in stock they had for Rs. 6,100 to the petitioner. This consideration of Rs. 6,100 was made up of Rs. 3,101-71 nP., and Rs. 1,348-29 nP. as interest thereon, due to the petitioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime of the transfer effected on 9th April, 1960, he "had full knowledge" of the fact that sales tax amount was outstanding against the Mart. The Sales Tax Officer proceeded to say that the question whether the Mart did or did not transfer its goodwill was immaterial and that the intention of the transferor, the Sodhanis, to defraud their creditors was evident from the fact that they had absconded and that a warrant for their arrest had been issued by a civil court. He then referred to the facts of a prosecution launched by one Narmada Bai against the petitioner which had no bearing whatsoever in the assessment proceedings before him. Ultimately the Sales Tax Officer reached the conclusion that the petitioner was a transferee of the business of the Mart and liable to pay tax amount and penalty imposed on it in respect of the assessment period from 23rd October, 1958, to 9th April, 1960. 4.. In upholding the conclusion of the Sales Tax Officer, the Additional Commissioner of Sales Tax laid stress on the fact that the petitioner did not adduce any evidence before the Sales Tax Officer to show that he was not a transferee of the business of the Mart, and on the circumstance that whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or registration unless he already holds a certificate of registration." It will be seen that one of the essential conditions that must be fulfilled before liability for payment of tax can be fastened under the said provision is that the ownership of the business of a dealer liable to pay tax must have been entirely transferred. "Business" means an adventure or concern in the nature of trade, and for the purposes of section 33(1) there must be a transfer of the ownership of "business" as such and not of the goods or material with which the business is carried on. A person may carry on a business and yet may not at a point of time possess stock-in-trade at all or sufficient stock-in-trade. Again, a person carrying on a business may sell at one point of time his entire stock and yet continue the business thereafter by acquiring some new stock later on. Or, he may after selling the stock-in-trade decide to close his business. The transfer of a business implies the transfer of a running business together with all its rights, liabilities, stock-in-trade and goodwill. The "goodwill" of a business is not the business, but is one result springing out of it. "It is considered a subject of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e liabilities were not passed on to the petitioner. There is no evidence whatsoever to show that after 9th April, 1960, the petitioner fulfilled certain contracts and commitments made by the Mart during the course of its business. If the petitioner, himself being a dealer in stationery and allied material, sold during the course of his own business the stock purchased from the Mart, then that circumstance cannot be regarded as decisive of the fact that he carried on the business of the Mart. The Additional Commissioner of Sales Tax clearly erred when he said that as the petitioner himself "was also carrying on the same line of business", therefore, it was clear that the ownership of the business of the Mart was entirely transferred to him. Again, if after purchasing the stock-in-trade the petitioner continued to use the premises which were formerly used by the Mart as a godown, that user by itself can have no significance, when there is no evidence whatsoever to indicate whether after 9th April, 1960, the landlord continued the old tenancy in favour of the Mart or created a new one in favour of the petitioner. 8.. The conclusion of both the Sales Tax Officer and the Additional Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
