Business transfer requires more than sale of stock and tenancy rights; going concern elements are essential under sales tax law.

A mere sale of the entire cloth stock, even with transfer of tenancy rights in the shop premises, does not by itself amount to transfer or succession of the business under section 17 of the Punjab General Sales Tax Act, 1948. Liability arises only where the ownership of the business as a going concern is entirely transferred and the transferee carries it on. In the absence of evidence of transfer of goodwill, furniture, account books, liabilities, employees, or other incidents of a running business, the transaction is not a business transfer. The sales tax authorities' contrary view was therefore erroneous.

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Issues: Whether the sale of the entire cloth stock together with transfer of tenancy rights amounted to a transfer of the entire business or succession of the business within section 17 of the Punjab General Sales Tax Act, 1948.

Analysis: The material facts established only that the whole stock of cloth was sold and taxed, and that the tenancy rights in the shop premises were transferred. There was no evidence of transfer of goodwill, furniture, account books, liabilities, employees, or any other incident of a running concern. On the language of section 17, liability arises only where the ownership of the business is entirely transferred and the transferee carries on that business. A mere sale of stock, even with transfer of premises or tenancy rights, is not enough to prove transfer of the business as such.

Conclusion: The question was answered in the negative. The transaction did not amount to a transfer of the business or succession of the business, and the finding of the sales tax authorities was held to be erroneous.

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