R.S.Pathak, J. - (1.) This is a reference under Section 11(1) of the U. P. Sales Tax Act, 1948, made at the instance of the applicant. The applicant is a limited company, the Mining and Chemical Industries Limited, Agra. It carried on the business of manufacturing and selling chemicals.
(2.) It appears that the applicant sold some machinery, packing materials and other articles, and was taxed on the sale proceeds by the Sales Tax Officer for the assessment year 1953-54.
(3.) The applicant preferred an appeal, and the Judge (Appeals) found that the applicant had decided to close its business on account of losses and debts, and that the factory and mines were actually closed and a decision was taken to sell off the assets. He held that the sale of the machinery, which was a part of the capital assets of the business, was not effected with a view to carry on any business but merely for the purpose of liquidating the debts, and that the transfer of such machinery could not be treated to be a "sale" within the meaning of the Act. He accordingly allowed the appeal and set aside the assessment order.;