RAM SAHAI Vs. COMMISSIONER S T

JUDGEMENT

(1.) This is 3 reference made by the Judge (Revisions) at the instance of the assessee under Section 11(1) of the O.P. Sales Tax Act. The question referred is: 1. Whether Rule 44(f) of the U. P. Sales Tax Rules applies only to the transfer of business as a whole; (a) in the case of multi-point goods, (b) and in the case of single point goods, (c) when transfer is made by a person who is not liable to pay tax?

(2.) It appears from the statement of the case that the assessee was a dealer in cloth liable to tax at a single point. The question is of assessment to sales tax for the year 1955-56. The assessee closed the business on 28-11-1955 and sold the entire business together with the stock in trade for the lump sum of Rs. 72,477/-/6. Though what was sold included some cloth, it is not known what was the price for which that cloth was sold because the business and the stock in trade were sold together for one sum. The assessee is admittedly a person liable to pay sales tax. It submitted returns showing gross turnover of Rs. 2,36,432/14/9, which amount included a turnover of about Rs. 7,000/- on account of sale of cloth purchased in U. P. Therefore, the net turnover on which it was liable to pay tax was, according to the returns, Rs. 2,29,5/9/12/6. During the assessment proceedings the Sales Tax Officer did not accept the figure of the gross turnover and estimated, according to his best judgment, at Rs. 2,60,000/-. This amount included RS. 72,000/- and odd on account of sale of the business but he assessed the assesses on Rs. 2,60,000/- without excluding the sale proceeds of the business from the turnover. On appeal the Judge (Appeals) reduced the amount of the gross turnover from Rs. 2,60,000/-to Rs. 2,00,000/-. He further held that sale proceeds of the business should not be induced in the turnover on which tax was payable. But he fixed the amount of the turnover on which tax was liable at Rs. 2,00,000/- instead of at RS. 1,87,000/- and odd. Why he deducted only Rs. 60,000/- and not Rs. 72,000/- and odd is not known. The assessee submitted itself to the order passed by the Judge (Appeals) but the Commissioner of Sales Tax filed an application under Section 10 for revision of the order of the Judge (Appeals). The Judge (Revisions) held that the amount of the sale proceeds of the business was not to be excluded in the turnover on which tax was payable and, therefore, added back Rs. 60,000/- which had been excluded by the Judge (appeals). In the result he restored the order of the Sales Tax Officer and assessed the assessee to tax at Rs. 2,60,000/-. Then at the instance of the assessee he referred the question to this Court.

(3.) Section 3(i) of the Act lays down that,