https://www.taxtmi.com/caselaws?id=133043 Section 26(3) of the Bombay Sales Tax Act, 1953 deemed allotment of a dissolved firm's goods to partners as a sale, but the Gujarat HC noted that Entry 54 in List II extends only to taxation of real sales or purchases of goods. Because a sale requires transfer of property for money consideration, distribution of assets in specie on dissolution, even with adjustment of partners' rights, is not a sale. The court further held that a statutory fiction cannot be expanded beyond the Legislature's competence to tax a non-sale transaction. The provision was therefore ultra vires to that extent, and sales tax could not be fastened on the dissolved firm's distribution of assets as a deemed sale. en-us Fri, 08 Nov 1963 00:00:00 +0530 Wed, 17 Apr 2013 14:06:11 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=133043 Section 26(3) of the Bombay Sales Tax Act, 1953 deemed allotment of a dissolved firm's goods to partners as a sale, but the Gujarat HC noted that Entry 54 in List II extends only to taxation of real sales or purchases of goods. Because a sale requires transfer of property for money consideration, distribution of assets in specie on dissolution, even with adjustment of partners' rights, is not a sale. The court further held that a statutory fiction cannot be expanded beyond the Legislature's competence to tax a non-sale transaction. The provision was therefore ultra vires to that extent, and sales tax could not be fastened on the dissolved firm's distribution of assets as a deemed sale. Case-Laws VAT and Sales Tax Fri, 08 Nov 1963 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=133043