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Issues: Whether sale of movable assets on closure of business amounted to sale during the course of business so as to attract tax under the M. P. Vanijyik Kar Adhiniyam, 1994, and whether the consequential penalty could survive.
Analysis: Tax liability under the Act arose only when a dealer made a taxable sale or purchase, but the expression "dealer" and the charging provision required that the transaction occur in the course of carrying on business. "During the course of business" imports a continuous, systematic or organised activity with a business object, not a one-time sale of assets on closure of operations. On the facts, the transfer of movable assets pursuant to the MOU was part of winding up the business and not an act of trading in the ordinary course of business. The taxing statute had to be construed strictly, and a liability not clearly created by the Act could not be imposed by extending the expression "business" beyond its legal meaning.
Conclusion: Sale of movable assets on closure of the business was not a sale during the course of business and was not taxable under the Act. The tax demand and the connected penalty could not be sustained.
Ratio Decidendi: A one-time sale of business assets effected on closure of operations is not a sale in the course of business unless the statute clearly brings such a transaction within the charging provision and the definition of dealer.
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