Sabyasachi Mukharji, J. -
(1.)This is an application under Article 226 of the Constitution challenging an order passed under Section 17 of the Bengal Finance (Sales Tax) Act, 1941. The impugned order was passed on 4th May, 1968. The petitioners also challenge a notice of assessment dated 17th June, 1969, fixing a date and time for producing evidence for assessment under the Bengal Finance (Sales Tax) Act, 1941. It is the case of the petitioners that at all material times the petitioners used to carry on business as owners of Bhagran Colliery at village Bhagran, P. S. Salanpur, District Burdwan, along with two others, namely, Narayan Chandra Laik, since deceased and Sujit Kumar Laik. On 29th March, 1963, petitioner No. 1 and the deceased, Narayan Chandra Laik, father of petitioner No. 2, obtained registration certificate under the Bengal Finance (Sales Tax) Act, 1941, from the Commercial Tax Officer, Asansol Charge. On 6th April, 1968, the aforesaid Ajit Kumar Laik and Sujit Kumar Laik retired from the said business with effect from 1st April, 1968 and respondent No. 1 by his order dated 29th April, 1968, accepted petitioner No. 1 and the deceased, Narayan Chandra Laik, as owners liable under the Act. It is the case of the petitioners that by a memorandum of agreement dated 31st October, 1967, petitioner No. 1 and the deceased, Narayan Chandra Laik along with the aforesaid Ajit Kumar Laik and Sujit Kumar Laik transferred their said business in Bhagran Colliery with effect from 16th October. The first contention of the petitioners relates to the claim arising out of the agreement dated 31st October, 1967. It was contended before the Commercial Tax Officer that in view of the said agreement respondents Nos. 3 and 4 were the transferees of the business and, as such, liable to be proceeded against under the provisions of the Bengal Finance (Sales Tax) Act, 1941. The impugned order dated 4th May, 1968, negatived that contention. The petitioners challenge the propriety of that order. Section 17 of the Bengal Finance (Sales Tax) Act, 1941, provides that where the ownership of the business of a registered dealer is transferred absolutely by sale, gift, bequest, inheritance or otherwise, or transferred by way of lease and the transferee carries on business either in its old name or in another name, the transferee shall be deemed to be the owner of the business and the registration should be deemed to be made in favour of the transferee. Therefore, in order to attract the provisions of Section 17 it is necessary that the ownership of the business of the registered dealer is transferred absolutely. The question in this case is whether by the document of 31st October, 1967, there was transfer of the ownership of the business of the registered dealer absolutely. The said agreement described the petitioners and/or the predecessor-in-interest as the principals and respondents Nos. 3 and 4 as the managing contractors. The recital of the said agreement, inter alia, provided as follows : And whereas the principals considered and deemed it expedient for the benefit of the principals to appoint managing contractors for purpose of proper and official management thereof; And whereas the managing contractors abovenamed have taken over the business of managing contractors as a going concern from the principals with effect from 16th day of October, 1967 ; And whereas to avoid any future difficulty and dispute it has been agreed that a formal agreement embodying the terms and conditions of appointment of the managing contractors be put into writing by and between the parties.
(2.)The said agreement was for ten years and stipulated the rights and the obligations of the parties. The said agreement, inter alia, provided by Clause 39 as follows : 39. That by this document no interest in coal land or colliery is being transferred to the managing contractor but he is only a managing contractor for which he is entitled to do all works of the colliery for and on behalf of the principals.
(3.)Considering the aforesaid agreement the Commercial Tax Officer in the impugned order has come to the conclusion that no interest in coal land or colliery has been transferred to the managing contractors who were only entitled to and authorised to do all the works of the colliery to and on behalf of the principals. Therefore, the ownership of the business was not transferred by the aforesaid document. In that view of the matter, I am unable to accept that the Commercial Tax Officer committed any error of law in passing the impugned order dated 4th May, 1968. Counsel for the revenue further contended that, in any event, even if there was a transfer, the transferor would still remain liable and he relied on the decision of this court in the case of Kshitish Chandra Sarbajna v. State of West Bengal  20 S.T.C. 42. In the view that I have taken on the question whether there was a transfer in terms of Section 17 of the Act it is not necessary for me to examine the question from this aspect any more.