COPPER ROLLERS PRIVATE LTD Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The facts which have given rise to this reference under section 61(1) of the Bombay Sales Tax Act, 1959, are that by an agreement of partnership dated 26th June, 1963, Keshavlal Desai, Gopaldas Aggarwal and Devkumar Aggarwal agreed to carry on in partnership the business of manufacturing copper rollers under the firm name and style of Copper Rollers Corporation. Under the said agreement of partnership the partnership was to commence from 1st July, 1963. The partnership firm of Copper Rollers Corporation got itself registered as dealer under the Bombay Sales Tax Act, 1959. Thereafter the said Keshavlal Desai retired from the partnership firm with effect from 1st June, 1965, and by a deed of retirement and assignment dated 4th June, 1965, assigned and transferred all his rights, title and interest in the said firm and in the goodwill thereof to the remaining partners, namely, Gopaldas and Devkumar. Gopaldas and Devkumar thereafter continued the said partnership business in the said firm name and style of Copper Rollers Corporation with effect from 1st June, 1965. On 2nd June, 1965, the applicant-company was incorporated with the object inter alia of acquiring the said business of the partnership firm of Copper Rollers Corporation and carrying on the said business. After incorporation of the applicant-company, by an agreement dated 14th June, 1965, the said partnership firm agreed to transfer and assign the said partnership business and all the rights, assets and liabilities thereof to the applicants upon the terms and conditions contained in the said agreement. Thereafter an indenture of assignment dated 5th November, 1965, was executed by and between the said partnership firm and the applicants whereunder the said business of the partnership firm of Copper Roller Corporation and all its rights, assets and liabilities were transferred to the applicants. This indenture of assignment was lodged for registration under the Indian Registration Act, 1908, and was registered on 8th November, 1965. Thereafter the applicants applied for registration as dealer under the said Act with effect from 5th November, 1965, namely, the date of the said indenture of assignment. The Sales Tax Officer, however, issued to the applicants a certificate of registration registering them with effect from 23rd November, 1965. The applicants thereupon filed an appeal to the Assistant Commissioner of Sales Tax. Relying upon certain recitals in the said indenture of assignment of Assistant Commissioner of Sales Tax came to the conclusion that the said business of the partnership firm of Copper Rollers Corporation was transferred to the applicants on 14th June, 1965, and not on 8th November, 1965. The view taken by the Assistant Commissioner of Sales Tax was confirmed by the Tribunal. Thereafter at the instance of the applicants the Tribunal has stated a case and submitted the following question for our determination :

(2.) The determination of the aforesaid question turns purely upon the construction of the said agreement dated 14th June, 1965 and the said indenture dated 5th November, 1965. It is, therefore, necessary to refer to the relevant recitals and clauses of the said two documents. The first three recitals in the said agreement dated 14h June, 1965, deal with the history of the said partnership firm. The fourth recital refers to an agreement executed between the said firm and the promoters of the applicant-company for the applicants to take over the business of the firm and is in the following terms :

(3.) The next recital refers to the incorporation of the applicant-company and the request by the promoters to the said firm to execute an agreement of transfer with the applicant-company. The sixth recital refers to the industrial licence and the import licences obtained by the said firm. The other recitals refer to the fact that the firm had entered into a building lease and had purchased building materials for the construction of a manufacturing unit on the plot of land agreed to be leased to the firm. Clause 1 of the operative part of the said agreement provides as follows : "Now IT IS HEREBY AGREED by and between the parties hereto as follows :