TMI Blog2016 (8) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... ner : Mr.Joseph Prabakar For the Respondents : Mr.S.Kanmani Annamalai ORDER Heard Mr.Joseph Prabakar, learned counsel appearing for the petitioner and Mr.S.Kanmani Annamalai, learned Additional Government Pleader (Taxes) appearing for the respondents 1 and 3 and with their consent, the writ petition is taken up for disposal. 2.The petitioner has challenged the order passed by the first respondent dated 09.01.2015 which is an assessment order for the year 2012-2013 on several grounds and also on the ground that the assessment had been finalized without affording an opportunity of personal hearing. The place of business of the petitioner was inspected by the Enforcement Officers on 11.03.2014 and it was stated that on verific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner has disposed of the electrical equipments, fire fighting equipments and furniture and fittings along with the immovable properties sold by them and they have realized sale proceeds on the disposal of the movable properties which falls within the definition of sale as found in Section 2(33) of the TNVAT Act, 2006. Therefore, they have to pay tax at 14.5%. 3. The petitioner's case is that the entire property along with all the movables were sold as a whole and it is a slump sale. Further, the petitioner's contention is that the first respondent has conveniently omitted to note the sale of land and building which was also shown in the very balance sheet of the petitioner for the year 2012-2013 and if one takes a holistic look ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal committed an error of law in applying the erroneous, legal test of requiring transfer of all businesses of an assessee as the only circumstance in which there could be exemption under Explanation 3 to Section 2(r) of the Tamil Nadu General Sales Tax Act, 1959 ? 3.Whether the Hon'ble Sales Tax Appellate Tribunal committed an error of law in emphasizing on the retention of a small part of the assets in the course of business succession, while failing to apply the correct legal test, which was 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a running concern, this Court held that the sale proceeds in question could not be taken as a part of the turnover, consequently, the question of denying the exemption to the assessee did not arise. This Court pointed out that the sale of stock-in-trade for the purposes of closing down the business is different from the sale of the business as a whole as running concern; the sale of the business, lock, stock and barrel, was not incidental or ancillary to the carrying on of a business so as to be taxable under 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iple that there is no sale in the course of business, since closure of a line of business could not be incidental or ancillary to its carrying on or on the alternative basis of application of Rule 6(d) of Tamil Nadu General Sales Tax Rules, 1959. Thus, on facts once again, this Court held that the assessee was eligible for exemption in respect of the turnover. 17.In the decision reported in 112 STC 01 in the case of Coromandal Fertilisers Limits Vs. State of A.P., the Full Bench of the Andhra Pradesh High 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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