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TMI Blog2014 (10) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of sale of his business 'as a whole' and that the petitioner/ assessee have sold only a division of their business (Windmill division) and when they have not sold their business as a whole, the receipt on account of the sale of one of the division of their business cannot be excluded from tax liability. Held that:- Similar issue was decided in the case of Eicher Motors Limited Vs. The State of Tamil Nadu [2013 (12) TMI 629 - MADRAS HIGH COURT] in favor of assessee - The petitioner has raised the above contention before the Assessing Officer, while submitting his reply to the notice dated 31.12.2013 and produced the copy of the decision. However, the Assessing Officer did not consider the same. Though the Assessing Officer did not con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on III to sub section 41 of Section 2 of the TNVAT Act 2006, which states that, ' any amount realized by a dealer by way of sale of his business as a whole, shall not be included in the turnover.' In the impugned order, the Assessing Officer held that the condition stipulated under Section 2(41) of the Act excluding the turn over from the tax liability is that the amount should have been realized by the dealer by way of sale of his business 'as a whole' and that the petitioner/ assessee have sold only a division of their business (Windmill division) and when they have not sold their business as a whole, the receipt on account of the sale of one of the division of their business cannot be excluded from tax liability. Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to determine whether the retention of the small part of the assets was to continue in the same line of business or was being retained so as not to burden the Transferee of the business?" The Division Bench, while considering the said question held as follows :- "14. We agree with the above submission of learned counsel appearing for the assessee. At the outset, the view of the Sales Tax Appellate Tribunal based on the decision reported in 7 STC 740 in the case of Tools and Machineries Ltd., Vs. State of Madras, clearly shows the incorrect approach to the case on hand which is distinguishable from the reported decision. A reading of the decision reported in 7 STC 740 (cited supra) shows that what was contemplated in the decision rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Act. Thus, this Court held that the transaction in question would not fall within the scope of the Act at all, consequently, the sale proceeds would not form part of the turnover as defined under the Act. This Court further pointed out that when there was a transfer of the business as a whole or as a going concern, in both the cases, there would be transfers of certain materials. However, when it is a composite sale, the question of bifurcating certain turnover as related to the goods sold for the purposes of assessability did not arise. Pointing out to the distinction arising in the case reported in (1977) 39 S.T.C. 317 in the case of State of Tamil Nadu Vs Thermo Electrics, this Court pointed out that where the assessee retained cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court considered a similar question and once again reiterated the law laid down by this Court in the decision reported in 39 STC 325 in the case of Deputy Commissioner (C.T.) Coimbatore Vs. K.Behanan Thomas. The case dealt with by the Andhra Pradesh High Court was similar to the case on hand. The Full Bench of the Andhra Pradesh High Court pointed out that when the division of a company, which is operationally and functionally independent for all practical purposes, could not be treated as a transaction in connection with or incidental to running of another independent unit of the company, the transaction relating to the transfer of said business had to be treated as sale of the business as a whole; when there was complete cessation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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