TMI Blog1970 (11) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... ration, therefore, is whether the firm was illegal in the circumstances. The findings of the Tribunal on which the opinion has to be expressed may be shortly stated as follows. Four persons, viz., Ramlal Sethi, Ramlal Anand, Sukardutt Anand and Vikramajit Sethi, were carrying on business in partnership and were running a hotel and restaurant in the name of Pagoda Hotel. Partner No. 1, Ramlal Sethi, was, in his personal capacity, running a shop for selling foreign liquor and had a licence for the same. He was running the shop in the name of M/s. Sethi Wine Stores. Another partner, Sukardutt Anand, was also running a foreign liquor shop in the name of Anand Wine Stores. He also had a licence in his own name for the purpose. From 1st April, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under the Income-tax Act. Under the Central Provinces Excise Act rules have been framed and rule VI of the C. P. Excise Rules relating to General. Licence Conditions is as follows: " No privilege of supply or sale shall be sold, transferred or sub-leased nor shall a holder of any such privilege enter into a partnership for the working of such privilege in any way or manner without the written permission of the Collector, which shall be endorsed on the licence." This rule therefore, not only prevents transfer or sub-lease of the privilege but also prevents any privilege holder from entering into a partnership for the working of such privilege. Since the privilege is to be in an individual name, the partnership could only be entere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e actual working of the privilege does not amount to transfer of the privilege. In those cases merely transferring of the privilege in any way was prohibited. There was no prohibition against entering into partnership. Even in cases where only transfer of privilege is prohibited, other High Courts like the Allahabad High Court in Jer and Co. v. Commissioner of Income-tax and the Madras High Court in Velu Padayachi v. Sivasooriam have taken a contrary view and have held that entering into partnership really amounts to a transfer of the privilege. But the case before us is different. Here, entering into partnership in any way or manner has been expressly prohibited. In such a case no two views can be taken. The matter came before a learned si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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