M/S Jr Metal Chennai LTD vs. The Asst Commissioner Of Central Tax

Held

The Court held that while there is no dispute on the proposition of law that a transfer of business requires more than just a transfer of assets, the crucial question of whether a transfer of business actually occurred is a question of fact. This factual determination requires evidence and material, which can be properly adjudicated by the appellate authority. The Court was not convinced that the impugned order was on its face without jurisdiction, nor was it argued that the authority inherently lacked jurisdiction. Therefore, the Court found it inappropriate to enter into this disputed question of fact in the exercise of its writ jurisdiction at this stage. The Court concluded that the petitioner could avail the statutory alternative remedy of appeal. Consequently, the writ petition was dismissed on the ground of the availability of a statutory alternative remedy.

Facts

The petitioner, M/s JR Metal Chennai Ltd., filed a writ petition challenging an order dated April 16, 2024, passed by the Assistant Commissioner, CGST, Anantapur Division. The petitioner contended that the impugned order, which held there was a transfer of business ownership from M/s. Venkatasai Ispat Industries Pvt. Ltd. to the petitioner, was passed without jurisdiction. The petitioner argued that while they purchased plant, machinery, land, and building via a Sale Deed dated February 17, 2021, they did not purchase the business itself, making Section 85 of the CGST Act inapplicable. The respondents raised a preliminary objection regarding the availability of an alternative statutory remedy of appeal.

Key Issues

1. Whether the writ petition is maintainable when an alternative statutory remedy of appeal is available, as argued by the respondents. 2. Whether the impugned order dated April 16, 2024, passed by the Assistant Commissioner, CGST, Anantapur Division, is without jurisdiction, as argued by the petitioner. Petitioner's arguments: The writ petition is entertainable because the impugned order is without jurisdiction. The petitioner purchased assets but not the business, and therefore, Section 85 of the CGST Act, concerning the transfer of business ownership, is not applicable. They relied on the Supreme Court's decision in State of Karnataka v. Shreyas Papers (P) Ltd. and the Bombay High Court's ruling in Krishna Lifestyle Technologies Ltd. v. Union of India, which held that the sale of assets alone does not constitute a transfer of business unless the business is transferred as a going concern. Respondents' arguments: A preliminary objection was raised that the impugned order is appealable under statute, and therefore, the writ petition should not be entertained.