TMI Blog1975 (2) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... d of assignment dated 23rd February, 1956, the assignors transferred the said business of K. Tajkhanji Co. to the assignee on the terms and conditions set out in the said deed of assignment. The said deed of assignment contains the recitals setting out the aforesaid facts. The relevant clauses of the said deed of assignment being clauses 1 and 4 are as follows: "1. That in consideration of the sum of Rs. 5,900 (Rupees five thousand and nine hundred) being part consideration amount of the mortgage hereinabove stated (the payment and receipt whereof the assignors do and each of them doth hereby admit and acknowledge) the assignors do and each of them doth hereby assign and transfer unto the assignee for ever the said business of 'K. Tajkhanji Co.' together with its goodwill and also the tenancy rights of the said premises and the full benefits, quota rights and advantages in respect of the said business or in any way concerning the said business hereby assigned and transferred to have, receive and take the said business and right to use and occupy the said premises and to use the goodwill thereof and all other premises hereby assigned and transferred or expressed so to be unto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me were dismissed by the Deputy Commissioner of Sales Tax. The respondents then went in further revision by way of two revision applications to the Sales Tax Tribunal at Bombay. These revision applications were allowed by the Tribunal. The Tribunal took the view that the ownership of the said business was not entirely transferred by the said assignors to the respondents and hence the respondents could not be treated as transferees under the provisions of section 26(1) of the said Act. These references have been made at the instance of the Commissioner of Sales Tax and arise out of the said decisions of the Tribunal. The question referred to us in both these references is as follows: "Whether, having regard to the facts and circumstances of the case and on a proper, construction of the assignment deed, the Tribunal was justified in law in holding that the conditions of the entire transfer of business contemplated by section 26(1) of the Bombay Sales Tax Act, 1953 (amended) were not fulfilled and, as such, the respondents were not liable to pay tax as transferees?" As the arguments turn on the provisions of sub-section (1) of section 26 of the said Act, we propose to take note at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer of the entire business and, therefore, the applicant was not liable as a transferee under section 26(1) of the said Act. In this connection, it has been observed by the Division Bench that it is incumbent on the revenue to establish beyond doubt that the requirements of sub-section (1) of section 26 are established and one of these requirements which has to be established is that the person sought to be held liable is the transferee of the entire business owned by a dealer. In Tools and Machineries Ltd. v. State of Madras[1956] 7 S.T.C. 740., it was held by a Division Bench of the Madras High Court that where a dealer sold his entire stock-in-trade, but he continued to be in business and retained in his hands certain assets of the business, which would be included in the "whole of the business", there could be no sale of the "business as a whole" within the meaning of rule 5(1)(h) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. Reference may also be made to the decision of a Division Bench of the Patna High Court in Hajipur Plywood Factory v. State of Bihar[1974] 34 S.T.C. 45., where it was held that in order to attract the provisions of section 20 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n clause 2 of the deed of assignment which provides that the assignors would execute all such acts, deeds and things necessary for assigning and transferring the said business and the goodwill thereof as were reasonably required. Had the matter rested with these two clauses alone, there might have been some substance in the submission of Mr. Naik. But, we find that in clause 4 of the said deed of assignment, it has been specifically provided that the assignors would not only be entitled to all the credits and liable for all the debits of the said business up to the date of the said assignment, but it is further provided that it would be the assignors who would perform all engagements in respect of or in any way concerning the said business up to and including the date of the said assignment and the assignee would not in any manner be responsible for the said engagements. The provisions in this regard in clause 4 of the said deed of assignment on a plain reading clearly indicate that in respect of all pending contracts it would be the assignors who would not only be liable but also entitled to perform the same and, as a consequence, it appears they would be entitled to the benefit, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion there was whether the appellant was a successor-in-interest of the company, which question is different from the question before us. Moreover, that question arose in connection with an altogether different Act which was in the nature of a labour welfare legislation, viz., the Industrial Disputes Act, 1947, whereas in the case before us, we have to interpret a phrase occurring in a fiscal statute imposing a burden on an assessee. Quite apart from this, this decision has been considered by the Patna High Court in Hajipur Plywood Factory v. State of Bihar[1974] 34 S.T.C. 45., referred to above, and the principle in that case has been laid down after taking into consideration this decision of the Supreme Court. As we have pointed out earlier, we have followed the principle laid down by the Division Bench of the Patna High Court, with which we are in respectful agreement. Mr. Naik next relied on the decision of the Supreme Court in Commissioner of Income-tax v. K.H. Chambers[1965] 55 I.T.R. 674 (S.C.). The question there was whether there was any succession within the meaning of section 25(4) of the Indian Incometax Act, 1922. This decision again does not help Mr. Naik in advanci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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