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Commissioner of Sales Tax Vs. Rowe and Rowe - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberS.T. Ref. Nos. 7 to 9 and 64 of 1974
Judge
Reported in(1977)6CTR(Bom)560
ActsBombay Sales Tax Act, 1959 - Sections 19, 19(1), 77 and 78; Bombay Sales Tax Act, 1953
AppellantCommissioner of Sales Tax
RespondentRowe and Rowe
Advocates:R.J. Joshi, Adv.
Excerpt:
- - on july 31, 1964 the sales tax officer passed an order reassessing the amount of tax due from the said proprietary concern of messrs rowe and rowe for the period april 1, 1954 to march 31, 1955. orders of reassessment in respect of the three subsequent periods were passed by the said sales tax officer on november 20, 1964. against these orders of reassessment appeals were filed to the assistant commissioner of sales tax, which appeals failed. against the orders dismissing the appeals revision applications were filed before the deputy commissioner of sales tax, which too failed, and thereupon the respondents went in further revision to the tribunal......the said messrs rowe and rowe was dead, no order of reassessment could be passed, inasmuch as the bombay sales tax act, 1953, did not contain any machinery for assessment of tax due from a dead person. the application for raising this additional ground was allowed by the tribunal. on behalf of the department reliance was placed on the provisions of s. 19(1) of the bombay sales tax act, 1959 as authorizing the department to reassess the tax due from the said rowe. the tribunal held that the provisions of the bombay sales tax act, 1953 applied to the reassessment in respect of the said four periods by reason of the saving sections in the bombay sales tax act, 1959 namely, s. 77 and 78 and that s. 19 of the bombay sales tax act, 1959 was not an enabling provision with respect to.....
Judgment:

Madon, J.

1. The facts which have given rise to the above four References are that one B.R. Rowe was, prior to February, 12, 1963, carrying on business under the trade name and style of Messrs Rowe and Rowe, as the sole proprietor thereof. For the assessment periods April 1, 1954 to March 31, 1955, April 1, 1955 to March 31, 1956, April 1, 1956 to March 31, 1957 and April 1,1957 to March 31, On March 25, 1963 a notice was served upon the said Rowe to show cause why his assessment for the period April 1, 1954 to March 31, 1955 should not be revoked. On December 2, 1963 the said Rowe entered into an agreement with one P. G. Bhuleskar, an employee of his, to carry on the said business of Messrs Rowe and Rowe in partnership with him. On January 9, 1964 the said Rowe died, and information of his death was given by the said Bhuleskar to the Sales Tax Officer by his letter dated January 28, 1964. After the death of the said Rowe a notice was served upon the said Bhuleskar on March 2, 1964 to show cause why the assessment made against the said proprietary concern of Messrs Rowe and Rowe should not be reopened for the period April 1, 1955 to March 31, 1956. On July 3, 1964 two notices were served upon the said Bhuleskar to show cause why the said assessments made against the proprietary concern of Messrs Rowe and Rowe for the periods April 1, 1956 to March 31, 1957 and April 1, 1957 to March 31m 1958 should not be reopened. On July 31, 1964 the Sales Tax Officer passed an order reassessing the amount of tax due from the said proprietary concern of Messrs Rowe and Rowe for the period April 1, 1954 to March 31, 1955. Orders of reassessment in respect of the three subsequent periods were passed by the said Sales Tax Officer on November 20, 1964. Against these orders of reassessment appeals were filed to the Assistant Commissioner of Sales Tax, which appeals failed. Against the orders dismissing the appeals revision applications were filed before the Deputy Commissioner of Sales Tax, which too failed, and thereupon the Respondents went in further revision to the Tribunal.

2. At the hearing before the Tribunal the Respondents applied to be allowed to raise an additional ground that as on the date of the orders of reassessment the sole proprietor of the said Messrs Rowe and Rowe was dead, no order of reassessment could be passed, inasmuch as the Bombay Sales Tax Act, 1953, did not contain any machinery for assessment of tax due from a dead person. The application for raising this additional ground was allowed by the Tribunal. On behalf of the Department reliance was placed on the provisions of S. 19(1) of the Bombay Sales Tax Act, 1959 as authorizing the Department to reassess the tax due from the said Rowe. The tribunal held that the provisions of the Bombay Sales Tax Act, 1953 applied to the reassessment in respect of the said four periods by reason of the saving sections in the Bombay Sales Tax Act, 1959 namely, S. 77 and 78 and that S. 19 of the Bombay Sales Tax Act, 1959 was not an enabling provision with respect to proceedings arising under the Bombay Sales Tax Act, 1953, in so far as they were not specifically saved by S. 77 of the 1959 Act. It further held that the phrase 'earlier law' used in clause (a) of sub-S. (1) of S. 19 only referred to the liability of a person who continued the business of a dead dealer where the liability of the deceased dealer had already accrued under an earlier Act.

3. Arising out of this judgment and orders of the Tribunal, the following question of law has been referred to us for our determination in each of the above References.

'Whether the Tribunal was correct in law in holding that the Respondents' case was not governed by the provisions of S. 19 of the Bombay Sales Tax Act, 1959, notwithstanding the fact that the deceased dealer, liable to pay tax under the Bombay Sales Tax Act, 1959, died on January 9, 1964, that is after the Bombay Sales Tax Act, 1959, came into force ?'

Sales Tax Reference No. 64 of 1976 is in respect of the period April 1, 1954 to March 31, 1955, Sales Tax Reference No. 7 of 1974 is in respect of the period April 1, 1955 to March 31, 1956, Sales Tax Reference No. 8 of 1974 is in respect of the period April 1, 1956 to March 31, 1957, and Sales Tax Reference No. 9 of 1974 is in respect of the period April 1, 1957 to March 31, 1958.

4. S. 19 of the Bombay Sales Tax Act, 1959, contains a special provision regarding the liability to pay tax in certain cases. There are several situations envisaged in that section. Sub-S. 19, as it stood at the relevant time, provided as follows :-

'19. (1) Where a dealer, liable to pay tax under this Act, dies then,

(a) if the business carried on by the dealer is continued after his death by his legal representative or any other person, such legal representative or other person shall be liable to pay the tax due from such dealer under this Act or under any earlier law, and

(b) if the business carried on by the dealer is discontinued after his death, his legal representative shall be liable to pay out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax (including any penalty) due from such dealer under this Act or under any earlier law,

whether such tax (including any penalty) has been assessed before his death but has remained unpaid or is assessed after his death.'

Sub-S. (2) of the said section deals with the case where a dealer, liable to pay tax under that Act, is a Hindu undivided family and the joint family property is partitioned amongst the various members or group of members thereof. Sub-S. (3) deals with the case where a dealer, liable to pay tax under that Act, is a firm and the firm is dissolved. Sub-S. (4) deals with the case where a dealer, liable to pay tax under that Act transfers or otherwise disposes of his business in whole or in part of effects any change in the ownership thereof in consequence of which he is succeeded in the business or part thereof by any other person. Sub-S. (5) deals with the case where a dealer, liable to pay tax under that Act, is the guardian of a ward on whose behalf the business is carried on by the guardian or are trustees who carry on the business under a trust for a beneficiary.

5. This brief summary of the provisions of the different sub-sections of S. 19 of the Bombay Sales Tax Act, 1959, would show that the question referred to us by the Tribunal in these References is too wide. The question for consideration before the Tribunal was only with respect of sub-S. (1) of the said S. 19 and not with respect to the various other sub-sections thereof. We therefore, with the consent of Counsel, reframe the question submitted to us in each of the said four References as follows :

Whether the Tribunal was correct in law in holding that the Respondents' case was not governed by the provisions of S. 19(1) of the Bombay Sales Tax Act, 1959, notwithstanding the fact that the deceased dealer, liable to pay tax under the Bombay Sales Tax Act, 1959, died on January 9, 1964, that is, after the Bombay Sales Tax Act, 1959, died on January 9, 1964, that is, after the Bombay Sales Tax Act, 1959, came into force

6. Now, the facts set out above would show that whichever sub-section of S. 19 could apply to the facts of these cases, assuming any of the provisions of S. 19 does apply and assuming the construction placed by the Tribunal upon Ss. 19 and 77 is wrong, the provisions of sub-S. (1) of S. 19 have no application and reliance placed by the Department upon the said provisions was wholly unjustified. Mr. Joshi, learned Counsel for the Applicant, was unable to show how or why the said sub-S. (1) applied to the facts of these cases. He, however, submitted that though sub-S. (1) of S. 19 did not apply; since none the less the Tribunal had proceeded to consider it and had given a finding on it as if it applied to the facts of the cases, we should decide the question referred to us as if the facts, which would make sub-S. (1) of S. 19 applicable existed in these cases. We really do not consider ourselves called upon to decide References upon a set of non-existent facts brought into existence by us in order to decide academic questions of law. To do so would be a futile exercise. As the provisions of sub-S. (1) of S. 19 were not attracted to the facts of the cases, in our opinion, the Tribunal erred in considering any question of law arising with reference to S. 19(1). Assuming any other sub-section of S. 19 applied, the Tribunal's attention was not drawn to it and the Tribunal has not given any finding with respect thereto, and no question of law based upon any other sub-section of S. 19 arises out of the judgment and orders of the Tribunal.

7. For the reasons set out above, we decline to answer the question referred to us.

8. In the peculiar circumstances of these cases, we think that a fair order for costs would be that each party should bear and pay its own costs.


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