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TMI Blog1995 (2) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... efinition of business." 2.. As is obvious from the question itself, the determination of the controversy involved therein would depend upon the true interpretation of section 2(5A) of the Bombay Sales Tax Act, 1959 ("the Act"), as amended by Maharashtra Act 9 of 1988 with retrospective effect from July 1, 1981. However, before proceeding to do that it would be expedient to briefly set out the facts of the case which have given rise to the controversy. These facts are: The assessee, M/s. Steel Suppliers Pvt. Ltd., was engaged in the business of manufacture and sale of iron and steel. It was registered as a dealer in respect of the said business both under the Bombay Sales Tax Act, 1959 ("the Bombay Act" or "the Act") and the Central Sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra Sales Tax Tribunal ("the Tribunal"). When the Tribunal took up the appeals for hearing, the definition of "business" contained in section 2(5A) of the Act had been amended by the Maharashtra Act 9 of 1988 with retrospective effect from July 1, 1981 and "transactions in connection with the closure of the trade, commerce, manufacture, etc." were also included in the definition of "business". The contention of the Revenue before the Tribunal was that the sales in question having been made by the assessee in the State of Maharashtra during the period from October 1, 1981 to September 30, 1982, i.e., after the amendment of section 2(5A) of the Act came into force with retrospective effect from July 1, 1981, the said sales would amount to sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o tax under the Act would have to be decided with reference to the relevant provisions of law prevailing on the date the transaction of sale took place. To put it differently, the contention is that if on the date of sale, the transaction of sale amounted to "business" within the meaning of the definition of "business" contained in section 2(5A) of the Act, the assessee would be a dealer in respect thereof and sales tax would be leviable under the Act on the turnover of such sales. The date of closure of the business would have no relevance for that purpose. The counsel for the assessee, on the other hand, submits that the date of closure is the crucial date for deciding whether the amended definition of "business" in section 2(5A) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuary 15, 1975, reads as follows: " 'Business' includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture and any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern." Despite the introduction of the above definition, controversy arose whether transactions "in connection with the commencement or closure of the business" would amount to business or not. The controversy having reached the Tribunal, the Tribunal, as in the case before us, took the view that such transactions did not fall within the above definition of "business". To meet this situation the Legislature, again stepped in and by the Maharashtra Act 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected with or incidental or ancillary to the closure of business, only in cases where the business is closed after July 1, 1981 and not on sales by dealers who had closed the business prior to that date. The above submissions, in our opinion, is misconceived because tax under the Act is leviable not on the closure of the business but on the sales of taxable goods. The material event is the sale and not the closure of business. The question that arises in such cases is whether the transaction of sale is taxable under the Act or not. The answer would depend upon the law applicable on that date, it is therefore, the date of the transaction, which is material and not the date of closure. Date of closure of the business is irrelevant for that pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to the decision of the Madhya Pradesh High Court in Commissioner of Sales Tax v. L. Vasudeo Rao [1981] 48 STC 447, where it has been held that the sale of fixed assets on closure of the business did not amount to transaction in the course of trade, commerce or adventures or in the nature of trade or commerce within the meaning of the definition of business contained in clause (bb) of section 2 of the M.P. General Sales Tax Act, 1958. The above decision, in our opinion, has no application to the present case in view of the amended definition of business contained in clause (5A) of section 2 of the Bombay Act by which the Legislature has specifically included such transactions within the definition of business. On the face of this defin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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