SAURABHKUMAR KANTILAL PARIKH Vs. SALES TAX OFFICER III OFFICE OF ASSISTANT SALES TAX COMMISSIONER RECOVERY AHMEDABAD

JUDGEMENT

(1.) IN this petition under article 226 of the Constitution of India, the petitioner Saurabhkumar Parikh challenges the legality and validity of the recovery notice dated September 2, 1985, given to the petitioner by the respondent. The facts and circumstances under which the present petition came to be filed are as under :

(2.) THERE was a partnership business being run in the name and style of Energy Electrical Corporation at Ahmedabad. The business as stated above has come into existence in the year 1965 and the business which was a partnership business had four partners. It appears that three partners, namely, (1) Jashbhai Patel, (2) Pravinbhai Patel and (3) Pravina P. Patel had retired some time in January, 1971 and one Prabhashankar Joshi had continued the business thereafter in the form of a sole proprietary concern. It is clear that from January, 1971, till May 14, 1976, the above referred firm was the sole proprietary business and it was being carried on by the sole remaining partner, namely, Prabhashankar Joshi. The petitioner had joined the said Prabhashankar Joshi as a partner with effect from May 14, 1976, as a result of which the sole proprietary concern, namely, Energy Electrical Corporation came to be converted into, once again, a partnership firm on the joining of the petitioner as a partner with effect from May 14, 1976. On August 26, 1976, the said Prabhashankar Joshi retired from the partnership business and thereafter, the present petitioner has become the sole owner of the business. The notice of recovery which is being challenged by the present petitioner in the petition is for an amount of Rs. 59,112 and it pertains to the period before the petitioner joined the abovesaid business. The notice regarding, the recovery which is being challenged is at annexure A dated September 2, 1985, and calls upon the present petitioner to pay the amount mentioned therein. It is not in dispute that the abovesaid recovery or demand is in respect of the sales tax dues of the business for the period before the petitioner had joined the abovesaid business as a partner. The main ground of challenge to the abovesaid notice at annexure A is that, it cannot be said that the business which was being carried on in the name of Energy Electrical Corporation ever was transferred to the present petitioner.

(3.) BUT Mr. Doshit, the learned counsel who appears for the respondent, has urged that when the transactions entered into by the original partners with Prabhashankar Joshi and later on by Prabhashankar Joshi with the present petitioner are looked into, it becomes clear that, there is a clear-cut case of a transfer of business which would fall within the purview of section 26 (4) of the Gujarat Sales Tax Act, 1969. Mr. Doshit therefore has urged that the business as a whole, came to be transferred by way of certain transactions or device in favour of the present petitioner and therefore he would be liable to satisfy the demand of the sales tax dues made against him by the impugned notice.