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TMI Blog1975 (1) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... tinued the said partnership business in the said firm name and style of Copper Rollers Corporation with effect from 1st June, 1965. On 2nd June, 1965, the applicant-company was incorporated with the object inter alia of acquiring the said business of the partnership firm of Copper Rollers Corporation and carrying on the said business. After incorporation of the applicant-company, by an agreement dated 14th June, 1965, the said partnership firm agreed to transfer and assign the said partnership business and all the rights, assets and liabilities thereof to the applicants upon the terms and conditions contained in the said agreement. Thereafter an indenture of assignment dated 5th November, 1965, was executed by and between the said partnership firm and the applicants whereunder the said business of the partnership firm of Copper Rollers Corporation and all its rights, assets and liabilities were transferred to the applicants. This indenture of assignment was lodged for registration under the Indian Registration Act, 1908, and was registered on 8th November, 1965. Thereafter the applicants applied for registration as dealer under the said Act with effect from 5th November, 1965, name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers to the incorporation of the applicant-company and the request by the promoters to the said firm to execute an agreement of transfer with the applicant-company. The sixth recital refers to the industrial licence and the import licences obtained by the said firm. The other recitals refer to the fact that the firm had entered into a building lease and had purchased building materials for the construction of a manufacturing unit on the plot of land agreed to be leased to the firm. Clause 1 of the operative part of the said agreement provides as follows: "Now IT IS HEREBY AGREED by and between the parties hereto as follows: Subject to hereinafter (sic) provided the vendors will sell and the purchasers will purchase the said business of the vendors carried on by them at Bombay as a going concern as and from June, 1965, together with all the assets and liabilities thereof including........" Then follow certain assets and liabilities which are specified in subclauses (a) to (f) of clause 1. They include goodwill, the benefit of the aforesaid agreement to lease, the benefit of all subsisting contracts, engagements, letters of credit-opened or to be opened-orders, import licences a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as and from the 14th June, 1965, in all respect and in every manner as assignees and all the dealings and transactions of the said business are binding on the assignees AND WHEREAS the deed of assignment required to be executed by the assignors in favour of the assignees has not been executed and the assignees have called upon the assignors to execute a proper deed of assignment of the business of the said Copper Rollers Corporation as a going concern and assign and transfer the same to the assignees AND WHEREAS by reason of the premises, it is agreed between the assignors and the assignees that these presents shall be deemed to be effective and operative between the parties hereto as and from the 14th day of June, 1965... AND WHEREAS the assignees have taken over the entire assets and liabilities of the assignors as per their books of account as on the 14th June, 1965 AND WHEREAS the said stock-in-trade, machinery and other tangible assets, etc., all capable of delivery by manual labour have been delivered to the assignees on the 14th day of June, 1965, before the execution of these presents." Then follows the operative part of the said indenture of assignment. Under the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us, the operative part of the said indenture of assignment is clear. There is no ambiguity about the operative part or any portion thereof and the recitals which precede it cannot govern or cut down the effect and operation of the operative part. Apart from this position in law which has been overlooked both by the Tribunal and the taxing authorities, we are unable to construe the recitals taken by themselves as transferring or as evidencing a transfer or assignment which took place on 14th June, 1965. Under clause 5 of the said agreement dated 14th June, 1965, the applicants were appointed constituted attorneys of the said firm for the purpose of carrying on its business. From the recitals it appears that the date for ascertaining the debts and liabilities and the assets and the stock-in-trade was agreed upon by the parties as 14th June, 1965. It is to reflect this position that the recitals, which we have quoted above, were incorporated in the said indenture of assignment. The transfer of the entire business of the said firm involved transfer of certain properties and assets which in order to be operative must of necessity be in writing and in some cases in writing regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen such person shall, notwithstanding anything contained in section 3, be liable to pay tax on the sales or purchases of goods made by him on and after the date of such succession, and shall, unless he already holds a certificate of registration, within thirty days thereof apply for registration: Provided that, where such person resells any goods purchased by the dealer while carrying on business before such succession, he shall be entitled to such deductions in respect thereof, as are permissible under section 7, 8, 9 or 10, as the case may be, had the resale been effected by the dealer himself." The relevant provisions of rule 8(3) of the Bombay Sales Tax Rules, 1959, are as follows: "Where a certificate of registration is issued to a dealer on an application made therefor, then- (a)...... (iii) if it was made within the time specified in sub-section (6) of section 19, it shall take effect from the date on which the dealer became liable to pay tax under the said sub-section; and (b) if such application was made after the expiry of the aforesaid period, it shall take effect from the date on which the application was made." It will be noticed that what sub-section (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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