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TMI Blog1986 (8) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... s in kerana, etc. The applicant applied for registration under the U.P. Sales Tax Act and it did not file any application for registration under the Central Sales Tax Act. The applicant also declared that the applicant-firm shall be dealing in the goods within U.P. The applicant also filed a return for the month of September on 29th October, 1985, and according to that return no tax liability is created on the applicant-firm. The question involved for adjudication in this case is as to whether the demand of security on the facts and the circumstances of the case under section 8-C(3) of the U.P. Sales Tax Act from the applicant-firm is justified or not. Heard learned counsel for the parties. The argument advanced on behalf of the learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners and out of these seven partners of the applicant-firm six belong to the old firm. Admittedly, the applicant-firm was constituted on 2nd September, 1985, while the old firm, was dissolved on 13th September, 1985, that is subsequent to the constitution of the applicant-firm. The Tribunal while upholding the order of demand of security of the court below has taken into consideration the past history of the six partners of the applicant-firm, who were also partners in the old firm. It has also taken into consideration the quantum of business done by the applicant-firm within a short span of time. The Tribunal held that there is no reason for interfering with the order passed by the learned Assistant Commissioner (Judicial), Sales Tax, Alla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority unless he has been given an opportunity of being heard, and the amount of such security or additional security shall in no case exceed the tax payable, in accordance with the estimate of the assessing authority, on the turnover of the dealer for the assessment year in which such security is required to be furnished." Under sub-section (3) of section 8-C of the said Act two conditions are laid down. First, the assessing authority has to give an opportunity to the dealer, and secondly, such security and additional security shall in no case exceed the amount of tax payable, in accordance with the estimate of the assessing authority, on the turnover of the dealer for the assessment year, in which such security is required to be furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned taking into consideration the said fact fixed the security against the applicant-firm. Learned counsel for the applicant vehemently urged that these two firms being separate entities, the past history of the firm M/s. Ramesh & Company, could not be taken into account for the purposes of fixing the quantum of security against the applicant-firm, M/s. Mahadeo Traders. In this connection he relied upon a decision of the Supreme Court in the case of Commissioner of Income-tax, West Bengal-III v. Pigot Chapman & Company [1982] 135 ITR 621 (SC). This is a case under the Indian Income-tax Act. In this case it was held that where the succeeding partners take over the assets and liabilities of the old firm and carry on the same business, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tten reply to the notice dated 25th October, 1985, has specifically stated that the applicant-firm has come into existence with effect from 2nd September, 1985, and further declared that the applicant-firm shall be dealing in goods only within U.P. and so the applicant-firm do not require either form C or form 31. The applicant, therefore, urged that in view of the aforesaid facts, no security could be demanded from the applicant-firm as there was no tax liability on the applicant-firm on the basis of the return filed by the applicant. This argument is without any force. Learned counsel for the department, on the other hand, rightly pointed out that in the appellate order it has been shown that even the earlier firm M/s. Ramesh & Company a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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