COLLECTOR OF SALES TAX BOMBAY STATE Vs. PARIMAL BROTHERS
LAWS(BOM)-1962-4-4
HIGH COURT OF BOMBAY
Decided on April 28,1962

COLLECTOR OF SALES TAX, BOMBAY STATE Appellant
VERSUS
PARIMAL BROTHERS Respondents





Cited Judgements :-

JAGDISH KAUR VS. SALES TAX OFFICER XXIV K-BLOCK VIKAS BHAWAN NEW DELHI [LAWS(DLH)-1973-7-6] [REFERRED TO]
SARASWATI OIL MILLS VS. STATE OF GUJARAT [LAWS(GJH)-1964-11-6] [REFERRED TO]
CHAMPAKLAL SOHANLAL VS. J H SHAH [LAWS(GJH)-1968-7-10] [REFERRED TO]
NEW SAURASHTRA VANASPATI CO MORVI VS. B A MAHARAJA SALES TAX OFFICER DIVISION I RAJKOT [LAWS(GJH)-1968-7-14] [REFERRED TO]
SURESH TRADING COMPANY VS. STATE OF MAHARASHTRA [LAWS(BOM)-1981-2-10] [REFERRED TO]


JUDGEMENT

Tambe, J. - (1.)These 8 references can be disposed of by one judgment. The dealer who has been assessed to sales tax under the Sales Tax Act, 1953 (hereafter referred to as the Act) is the same person, namely, the firm of Messrs Parimal Brothers, respondents to all these 8 references.
(2.)The facts giving rise to these references, and the question referred to us are identical in all these references. These 8 references raise a question as regards the interpretation and true meaning of the clause "any tax payable ....... and remaining unpaid at the time of the transfer" occurring in section 26 of the Act.
(3.)The facts in brief are : The business was carried on originally by a firm doing business under the name Shroff Parekh & Co. In December, 1952, Shroff Parekh & Co. transferred its business as a going concern to one Mrs. Kusum Mody. On 26th November, 1953, Mrs. Mody in her turn transferred the business as a going concern to the Sunways (India) Private Limited. On 2nd June, 1954, the Sunways (India) Private Limited transferred the business as a going concern to Messrs Parimal Brothers, the respondent to all these 8 references, and since then, it appears that they have been running the business. On 26th April, 1955, notices under section 14 were issued by the Assistant Collector of Sales Tax to Mrs. Kusum Mody, Mr. K. M. Shroff of Messrs Sunways (India) Private Limited, and Messrs Parimal Brothers, calling upon them to show cause why they should not be assessed to sales tax in respect of the following five periods : (1) 1st January, 1953, to 31st March, 1953; (2) 1st April, 1953, to 25th November, 1953; (3) 26th November, 1953, to 31st March, 1954; (4) 1st April, 1954, to 6th May, 1954; and (5) 7th May, 1954, to 1st June, 1954. After hearing them, the Assistant Collector of Sales Tax on 1st June, 1955, passed 8 orders assessing the respondent to tax. For the first three periods, two orders for each period were passed, one relating to the general tax and the other relating to the special tax; and for the last two periods, one composite order for each period was passed in respect of both the taxes. The respondents has been assessed to tax under section 26 of the Act. In due course, all these 8 cases were taken to the Sales Tax Tribunal by Messrs Parimal brothers. On their behalf it was contended that they cannot be held liable under section 26 of the Act in their capacity as transferee of the business inasmuch as neither Mrs. Kusum Mody nor the Sunways (India) Private Limited had been assessed to tax prior to or on the date of transfer of the business in their favour. In other words, the argument was that unless tax has been assessed, it cannot be said to have become payable within the meaning of section 26 of the Act. This contention succeeded before the Tribunal. The Tribunal relying on its prior decision in Mohanlal Brijlal v. The State of Bombay ([1956] 7 S.T.C. 295), held that Messrs Parimal Brothers were not liable to be taxed in respect of the aforesaid five periods. At the instance of the Collector of Sales Tax, Bombay State, Bombay, the Tribunal after drawing up the statement of the cases, has referred the following question of law in all these references :-
"Whether on the facts and in the circumstances of these cases, and on a proper construction of sub-section (1) of section 26 of the Bombay Sales Tax Act, 1953, the opponents are liable to pay the tax assessed on 1st June, 1955, for the periods 1st January, 1953 to 31st March, 1953, 1st April, 1953 to 25th November, 1953, 26th November, 1953 to 31st March, 1954, 1st April, 1954 to 6th May, 1954, and 7th May, 1954 to 1st June, 1954 ?"



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