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2021 (3) TMI 961 - HC - VAT and Sales TaxPrinciples of natural justice - Revision of proceeding - recovery of tax arrears - proceedings are challenged by the petitioners on the ground that before issuing the impugned notice dated 26.12.2005, no show cause notice was issued to them and no personal hearing was held - HELD THAT:- There is no dispute that there was a transfer of ownership of business of the proprietary concern of Mr.K.Y.Gaitonde to the newly constituted partnership firm. The proprietary concern also which also took over the name M/s.Gomukhi Charma Kendra of the proprietary concern of Mr.K.Y.Gaitonde. Thus, all the assets including good will of the erstwhile proprietary concern of Mr.K.Y.Gaitonde was taken over by the partnership firm, which consisted of three partners namely Mr.K.Y.Gaitonde and the 2 petitioners. The respective petitioners held 50% and 41.67% of the shares in the profit and loss of the business of the partnership firm based on the credit standing in their name in the books of accounts with the proprietary concern of Mr.K.Y.Gaitonde of the erstwhile proprietary concerned by name M/s.Gomukhi Charma Kendra - It clearly shows that there was a transfer of business in favour of the partnership concerned. Therefore, there can be no question that the petitioners not being made liable to pay for arrears of tax of the proprietary concern of Mr.K.Y.Gaitonde. However, they are liable only to the extent of the assets that were transferred on the date of execution of the partnership deed dated 29.03.2002 as it is evident from a reading of Section 27 of the TNGST Act, 1959 - it was incumbent on the part of the respondents to particularize the extent of liability to which they can be exposed while issuing notice under Section 27 of the TNGST Act, 1959. These writ petitions stand allowed with liberty to the respondents to initiate appropriate proceedings against the petitioners to the extent of assets that were transferred to the partnership firm on 29.03.2002.
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