Lease of hotel premises and movable assets does not itself constitute transfer of business for transferee liability.

A mere lease of hotel premises, furniture and utensils does not amount to a transfer of business for transferee liability under the Orissa Sales Tax Act, 1947. The arrangement in question was only a rental lease of the house portion and certain movable assets, supported by a security deposit for possible loss of articles. As there was no assignment of the hotel business itself and the relationship remained that of lessor and lessee, a complete transfer of business could not be inferred. Transferee liability arises only on a real transfer of the business, not on lease of premises and movable assets alone.

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Issues: Whether the letting out of hotel premises, furniture and utensils amounted to a transfer of business attracting liability under the Orissa Sales Tax Act, 1947.

Analysis: The agreement showed only a rental arrangement for the house portion and certain furniture and utensils, with a security deposit for possible loss of articles. There was no transfer of the hotel business itself, no indication that the business as such was assigned, and the relationship created was that of lessor and lessee rather than transferor and transferee. On those facts, a complete transfer of business could not be inferred from the lease of premises and utensils alone.

Conclusion: There was no transfer of business, and the assessee was not liable as transferee on that footing.

Final Conclusion: The reference was answered by holding that a mere lease of business premises and utensils does not amount to a transfer of business for the purpose of transferee liability under the Act.

Ratio Decidendi: Liability of a transferee under the sales tax provision arises only where there is a real transfer of the business itself, and not from a mere lease of premises and movable business assets.

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