Business discontinuance requires complete cessation; partition and allotment to one coparcener did not trigger tax liability.

Allotment of a Hindu undivided family business to one coparcener on partition did not amount to discontinuance or dissolution under section 19(3) of the Orissa Sales Tax Act, 1947. The Orissa HC held that "discontinued" means a complete cessation of business, not a mere change in ownership or personnel. Because the business continued in the successor's hands in the same form and substance without interruption, the statutory condition for treating the earlier family business as discontinued was not satisfied, and liability on that basis did not arise.

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Issues: Whether allotment of a Hindu undivided family business to one coparcener on partition amounts to discontinuance or dissolution of the business for the purposes of section 19(3) of the Orissa Sales Tax Act, 1947.

Analysis: The expression "discontinued" was held to mean a complete cessation of business and not a mere change in ownership or personnel. Where the business continues in the hands of the successor in the same form and substance, there is no discontinuance within the meaning of section 19(3). On partition, the business was allotted to the petitioner, who carried it on in the old form without interruption. The statutory condition for treating the earlier H.U.F. business as discontinued was therefore not satisfied.

Conclusion: The allotment of the joint family business to one member on partition did not amount to discontinuance or dissolution under section 19(3), and the petitioner was not liable to be assessed on that basis.

Final Conclusion: The reference was answered against the revenue and the assessee was held not liable under the discontinuance provision on the facts found.

Ratio Decidendi: Discontinuance of a business denotes complete cessation of the business itself and is not established by a mere change in ownership when the business continues in substance under the successor.

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