TaxTMI 
TaxTMI 
2014 (10) TMI 908
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....and the corresponding penalty on the said turnover imposed under Section 27(3) of the Tamil Nadu Value Added Tax Act, 2006 (the TNVAT Act). 3. The petitioner is a registered dealer on the file of the respondent under the provisions of TNVAT Act. Though the impugned order of assessment deals with various issues, this Writ Petition is restricted only to the exemption claimed by the petitioner under Explanation III to sub section 41 of Section 2 of the TNVAT Act 2006, which states that, ' any amount realized by a dealer by way of sale of his business as a whole, shall not be included in the turnover.' In the impugned order, the Assessing Officer held that the condition stipulated under Section 2(41) of the Act excluding the turn ove....
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....ansfer of all businesses of an assessee as the only circumstance in which there could be exemption under Explanation 3 to Section 2(r) of the Tamil Nadu General Sales Tax Act, 1959 ? 3. Whether the Hon'ble Sales Tax Appellate Tribunal committed an error of law in emphasizing on the retention of a small part of the assets in the course of business succession, while failing to apply the correct legal test, which was to determine whether the retention of the small part of the assets was to continue in the same line of business or was being retained so as not to burden the Transferee of the business?" The Division Bench, while considering the said question held as follows :- "14. We agree with the above submission of le....
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....ld not be taken as a part of the turnover, consequently, the question of denying the exemption to the assessee did not arise. This Court pointed out that the sale of stock-in-trade for the purposes of closing down the business is different from the sale of the business as a whole as running concern; the sale of the business, lock, stock and barrel, was not incidental or ancillary to the carrying on of a business so as to be taxable under the Act. Thus, this Court held that the transaction in question would not fall within the scope of the Act at all, consequently, the sale proceeds would not form part of the turnover as defined under the Act. This Court further pointed out that when there was a transfer of the business as a whole or as a go....
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....f a line of business could not be incidental or ancillary to its carrying on or on the alternative basis of application of Rule 6(d) of Tamil Nadu General Sales Tax Rules, 1959. Thus, on facts once again, this Court held that the assessee was eligible for exemption in respect of the turnover. 17. In the decision reported in 112 STC 01 in the case of Coromandal Fertilisers Limits Vs. State of A.P., the Full Bench of the Andhra Pradesh High Court considered a similar question and once again reiterated the law laid down by this Court in the decision reported in 39 STC 325 in the case of Deputy Commissioner (C.T.) Coimbatore Vs. K.Behanan Thomas. The case dealt with by the Andhra Pradesh High Court was similar to the case on hand. The ....