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TMI Blog1973 (10) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... le properties excepting raw materials, stocks in process, finished and unfinished products, by an indenture dated 25th February, 1964. Subsequently, at the request of the company to furnish guarantee for an amount not exceeding Rs. 7,00,000 in respect of the deferred payment to be made to the machinery suppliers, namely, M/s. Toyada Tsusho Kaisha Limited, Nagoya (Japan), in respect of the plant and machinery to be imported by the company from them, the corporation issued a letter of guarantee on 11th October, 1963, in favour of the said company in Japan and in order to secure the liability of the corporation arising on account of the said guarantee, the company created an equitable mortgage by deposit of title deeds on 10th October, 1963, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritten to the corporation requesting it to take steps as might be necessary for protecting its interests. The corporation served a notice on the company through Shiv Kumar Gupta, dated 20th May, 1972, calling upon him to hand over the peaceful possession of the mortgaged assets to the corporation. The board of directors of the company, after considering the letter of the corporation, sent to it a resolution agreeing to hand over the possession of the mortgaged assets subject to the directions of this court. The corporation, in the meantime, had negotiated with one L.N. Jhunjhunwala, Managing Director of Rajasthan Spinning and Weaving Mills Limited, who agreed to take on lease the mortgaged assets of the company for a period of 10 years on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered as arrears of land revenue. The corporation filed Civil Writ No. 2289 of 1972, calling in question the legality and propriety of the aforesaid action of the authorities under the Sales Tax Act. The claim in the writ petition was contested on behalf of respondents 1 to 4 on various grounds. The learned single Judge, after going through the entire matter, found that the action of the authorities was Illegal and accordingly allowed the petition with costs, vide order dated 29th January, 1973. It is against the said order of the learned single Judge that the present appeal under clause 10 of the Letters Patent has been filed by the State of Punjab and others. The only contention raised on behalf of the corporation before the learned s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only the equity of redemption. However, it was sought to be argued that the learned single Judge fell in error in not permitting the contention to be raised on the basis of the provisions of section 17 of the Tax Act, on the ground that no such plea had been taken In the return. According to the learned Deputy Advocate-General, It was the case of the petitioners themselves in subparagraph [1972] 30 S.T.C. 581; 1972 R.L.R. 82. of paragraph 22 of the petition that the approach of the authorities that the entire assets and liabilities of the company, which had been transferred to the corporation, were liable to be sold for the payment of the arrears of sales tax under the provisions of section 17 of the Tax Act, was not tenable and this plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration certificate amended accordingly." From its bare perusal, we find that it has absolutely no applicability to the facts of the present case. One of the essential conditions before the applicability of this provision could be invoked is that the ownership of the business is entirely transferred. Admittedly, in the instant case, there has not been such a transfer of the entire ownership of the business. The equity of redemption is still with the company. The provisions of section 17 would apply only where there is a complete transfer of the business such as where the business has been sold in its entirety. Moreover, the moment it is conceded that the finding of the learned single Judge to the effect that the corporation was entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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