STATE OF GUJARAT Vs. SAYAJI MILLS NO. 1

JUDGEMENT

(1.) THE Gujarat Sales Tax Tribunal at Ahmedabad has referred the following questions of law for decision of this court under Section 69 of the Gujarat Sales Tax Act, 1969 ("the Act", for short).

(2.) IN order to understand the scope of questions referred to this court for decision, it would be relevant to notice certain basic facts. The opponent, i.e., M/s. Sayaji Mills Limited No. 1 ("the mills company", for short) was incorporated under the provisions of the Companies Act, 1956. It was a registered dealer within the meaning of the Act. The opponent -mills company was situated at Baroda. The mills company agreed to transfer the entire concern to Shri Alokprasad Jain pursuant to an agreement dated October 8,1972. Later on, at the instance of Shri Alokprasad Jain, the mills company executed the sale deed dated May 26, 1973 in favour of Shree Keshariya Investment Limited to which four schedules were appended. The first schedule related to the immovable properties that were transferred whereas the second schedule mentioned the dead stock of machinery of various departments of the mills company and the third schedule referred to particulars of the term loans and other facilities which were availed of by the mills company whereas the fourth schedule related to the immovable properties including the immovable machineries transferred by the mills company to the purchaser. On return being filed, the assessment for the period from April 1, 1973 to March 31, 1974, relating to the mills company was taken up by the Sales Tax Officer, Baroda. By an order dated March 18, 1978 the Sales Tax Officer calculated the gross sales of the mills company at Rs. 1,80,23,823. From the above mentioned sum, the Sales Tax Officer deducted the sales of cloth amounting to Rs. 1,57,33,452 and held that the net taxable turnover of sales of the mills company was Rs. 20,90,371. It may be mentioned that this amount was the sale price of the stock -in -trade of various current assets that were sold by the mills company to the purchaser. The submission made by the mills company that it was not a transfer/sale of the assets in the course of business by the mills company but it was the sale of entire business and current assets which would not be covered by Section 2(12) of the Act was negatived by the Sales Tax Officer. The Sales Tax Officer directed the mills company to pay a sum of Rs. 64,817.31 towards tax and Rs. 61,056.92 as penalty under Section 45(6) of the Act.

(3.) IT is settled law that findings of facts recorded by the Tribunal are final because the Tribunal is the final fact -finding authority. As observed earlier, the Tribunal has, in terms, held that the sale of the entire business had occasioned as a result of discontinuance of business, which means that the mills company had transferred its entire concern not as a going concern but the transfer was effected after the closure of the concern. Therefore, with the consent of the learned advocates for the parties, this court proposes to re -frame the questions Nos. (1) and (2) referred to this court as under: