PUNJAB OIL MILLS Vs. STATE OF PUNJAB

JUDGEMENT

(1.) The controversy here is with regard to the sale by a partnership firm to another firm having same partners, but with different shares.

(2.) After assessment for the years 1974-75 to 1977-78 had been finalised, proceedings under Section 11-A of the Punjab General Sales Tax Act, 1948 were subsequently initiated by the Assessing Authority on the basis of information that during these assessment years, the Assessee had transferred goods to the firm M/s Punjab Oil Mills, Damtal (Himachal Pradesh). The Assessee on its part took the plea that these transactions were inter-state sales and were thus not liable to tax. The tribunal on appeal held against the Assessee by observing that a firm with the same partners remains the same, as mere difference in the proportion of shares of some partners is relevant only for the purpose of sharing profits, but does not alter the legal status of the firm at the time of transaction and therefore, same partners constituting two or more firms will continue to remain the same person and there cannot be any transaction of sale or purchase between them.

(3.) On the other plea raised by the Assessee, however, namely the claim by it of the benefit of the concessional rates under the notification issued under Section 4(B) of the Act, the Tribunal remanded the case to the Assessing Authority for admitting affidavits and making fresh determination. This is what constitutes the factual back-ground leading to the following question being referred namely: