9911796707
TMI Blog1970 (7) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... It is not in dispute that after the Reliable Engineering Works took over the business of Azad Moulding Works, an application was made on behalf of the former to the sales tax department to treat it as the transferee of the latter and to issue sales tax certificate accordingly. This request was granted by the department. The case of the petitioner is that thereafter from 1st January, 1963, there was a reconstitution of their firm as the above-said Ishwerlal Sankalchand and Chandrakant Chimanlal Shah retired. After their retirement, the firm was, according to the petitioners, run by the joint Hindu family of Maganlal Ambalal Patel, the father of the petitioners Nos. 1, 2 and 3. It is further pointed out by the petitioners that thereafter on 4th November, 1963, there was a partition in the family of Maganlal Ambalal Patel, as a result of which, the business under the name of Reliable Engineering Works was carried in partnership between the petitioners Nos. 1, 2 and 3 from 4th November, 1963. It is said that thereafter petitioner No. 4, Narandas Somnath Patel, was admitted to this partnership as from 25th October, 1965. It is an admitted position that when the above referred transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention was that the above-referred history of the transfer of business from Azad Moulding Works to the Reliable Engineering Works and the change in the constitution of the firm 'Reliable Engineering Works" at different times, show that the petitioners are transferees of original transferees and hence they would not be liable for the tax dues of the original transferor M/s. Azad Moulding Works. So far as the second contention is concerned, we find that it is not necessary to go into the merits of the same as, in our opinion, this petition can be disposed of on the first contention which is raised on behalf of the petitioners. Before touching the relevant pleas raised by both the parties with regard to the validity of the impugned notice, it would be necessary to refer to some of the relevant provisions of the Bombay Sales Tax Act, 1959 (hereinafter referred to as "the Act"). One thing which is clear is that the business of Azad Moulding Works was taken over by the Reliable Engineering Works on 1st November, 1961, i.e. after the provisions of the Act came into force on the appointed day, which is the first day of January, 1960. Therefore, the contentions raised by both the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds much upon the construction of section 34, it would be necessary to quote this section, which is in the following terms: "34. Where in respect of any tax (including any penalty) due from a dealer under this Act or under any earlier law, any other person is liable for the payment thereof under section 19, all the relevant provisions of this Act or, as the case may be, of the earlier law, shall in respect of such liability apply to such person also as if he were the dealer himself." It is evident from the provisions of this section that it covers the cases of all those persons, who are liable for the payment of tax of a dealer by virtue of the provisions contained in section 19 of the Act. The section further says that in the case of such a person, all the relevant provisions of the Act shall apply, as if he were the "dealer" himself. Now the contention which is raised on behalf of the petitioners is that even if it is believed that they are the transferees of the business of Azad Moulding Works, and as such, liable for the amount of tax in question under sub-section (4) of section 19 of the Act, they, by virtue of the above-quoted section 34 of the Act, are entitled to be giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act regarding recovery of the tax are concerned. In this connection, the contention of the learned Government Pleader was that the words "tax due", as found in section 19 of the Act, are used in the sense of "tax liability" which is not quantified. In his view, therefore, the provisions contained in section 34 of the Act would not apply in cases where there is a pending assessment and if that be so, the transferee, who becomes liable to pay tax under section 19(4) of the Act, would not be entitled to any notice of assessment under any of the provisions of section 33. We find that though it is true that the Bombay Sales Tax Act of 1959 or the Rules framed thereunder do not contain any specific provision for giving any notice to the transferee of a running business, who becomes liable under section 19(4) of the Act, the provisions contained in section 34 provide sufficient guidance on this point. As will be clear from the discussion which follows, we are of the opinion that on a true construction of the provisions of section 34, the transferee, who becomes liable under section 19(4) of the Act, himself becomes a "dealer" and, therefore, he is entitled to notices, which are contem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the provisions of the Act, which are sought to be applied to the case of a transferee-dealer by virtue of section 34 of the Act, would be only those provisions which are with regard to the recovery of the tax. In our opinion, section 34 contemplates the application of all the relevant provisions of the Act to the case of a transferee-dealer, who becomes liable under the provisions of section 19(4) of the Act to pay the tax, as if he were the "dealer" himself. It is in the context of this view that we now proceed to consider whether the provisions as regards the assessment of taxes, which are contained in sub-section (3) of section 33, would apply to the petitioners' firm. As said above, section 33 provides for the assessment of taxes. Sub-section (1) thereof provides for the assessment for each year during which the dealer is liable to pay tax. Sub-section (2) says that if the Commissioner is satisfied that the returns furnished in respect of any period are correct and complete, he shall assess the amount of the tax due from the dealer on the basis of such returns filed by him. Speaking of this case, we are not concerned with the provisions of sub-section (2). Sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, as it appears through its various provisions, we do not find any substance in this contention. If a reference is made to section 30 of the Act, it becomes clear that a dealer liable to pay sales tax under the Act is required to give information to the prescribed authority of the department regarding the changes in business including the transfer of that business within the prescribed time. If he fails in doing this, lie becomes liable to penalty under section 63(1)(g) of the Act. Similarly under section 19(6) even the transferee of the business is required to apply for registration within 30 days unless he already holds a certificate of registration. Thus the Act contains ample provisions to enable the department to know about a transfer of a running business. Under the circumstances, the department can at once issue necessary notices to the transferee-dealer as contemplated by section 33 of the Act. We also do not find any substance in the contention of the learned Government Pleader that the assessment contemplated by section 33 is qua business and not qua the owner thereof. It is of course true that assessment of sales tax is made on the turnover of the business bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
