A private company wants to sell a business unit by way of slump sale to one of its group companies ( a pvt company ) in which the directors are common. Would this attract Sec 297 of Companies Act ? Would this sale be considered as sale of goods.
Still Learning (cs) (234 Points)
20 February 2014A private company wants to sell a business unit by way of slump sale to one of its group companies ( a pvt company ) in which the directors are common. Would this attract Sec 297 of Companies Act ? Would this sale be considered as sale of goods.
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 21 February 2014
No, business unit is not 'goods' and not covered u/s 297. There are court rulings confirming that VAT is not applicable in such cases since it is not sale of goods.
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