1. This is a petition by certain persons against whom recovery of arrears of sales tax is sought to be made under the C.P. and Berar Sales Tax Act, 1947 (XXI of 1947). It appears that the late Basantlal Ramsaran Dhawan was doing business at Nagpur under the name and style 'Laxmi Stores, Residency Road, Sardar, Nagpur'. As such he was a registered dealer for the purposes of sales tax, the registration number being SS/24. He passed away on 28th January, 1959, yet without any notice being issued an assessment was made for the period 1st January, 1958, to 31st December, 1959, as a result of which the 'Laxmi Stores' was made liable to pay Rs. 3,785-03 nP. as sales tax and a penalty of Rs. 52-00. For the period 1st January, 1959, to 14th May, 1959, the business was assessed to sales tax at Rs. 1,375-62 nP. and a penalty of Rs. 340-00. It will be noticed that part of the later period is after the death of Basantlal on 28th January, 1959. It appears that the entire proceedings taken for assessing the business to sales tax commenced and concluded after the death of Basantlal on 28th January, 1959, and both the orders assessing the business were passed on 5th December, 1960.
2. Pursuant to these assessment orders, the department sought to recover the sales tax assessed from the petitioner and on 10th January, 1962, a letter was written by the Sales Tax Officer, Nagpur, Circle No. II, which, according to the department, is a notice of recovery. The petitioner's case is that neither in the process of recovery nor during the actual assessment proceeding whereby the two orders dated 5th December, 1960, were passed, were they at all noticed or heard. What appears to have been done is this. On the records of the department the assessee was Messrs Laxmi Stores, Residency Road, Sardar, Nagpur. Therefore the departmental officer issued a notice to the dealer in that name and since after the death of Basantlal the shop must have been closed, it was affixed on the premises of the shop. Then holding that the assessee was validly served the assessments were made. One of the principal points that have been argued in this petition is that this notice is illegal and on the basis of such a notice the petitioners who are only the heirs of the deceased at best could not have been assessed nor could recovery be made from them.
3. In our opinion, this contention is entitled to succeed. The authority to recover is in section 12(5) of the Act which says that 'any tax or penalty or part thereof left unpaid after the date specified in the said notice shall be recoverable as an arrear of land revenue.' No notice, it appears, in compliance with the provisions of sub-section (4) of section 12 has yet been issued. All that has been done is that a notice addressed to the 'Laxmi Stores' was affixed on the premises of the said Laxmi Stores. Now, it is not in dispute that the late Basantlal was carrying on his business in the name of Messrs Laxmi Stores, Residency Road, Sadar, Nagpur. In fact, that is the name and style mentioned in the assessment order exhibit A-2. Messrs Laxmi Stores was merely a trade name of an individual and it was not by any means a person within the meaning of the law. The person involved was the late Basantlal. Messrs Laxmi Stores cannot be said to be a person. If that fundamental fact had been correctly grasped, we have no doubt that the officer would not have issued the notice in the name of Messrs Laxmi Stores. The very definition of 'dealer' in section 2(c) of the Act begins with the words ''dealer' means a person' etc., and we have shown that in the instant case Messrs Laxmi Stores was not a person. If one turns to the remaining provisions of the Act, it throughout deals with a dealer and since a dealer must be a person, the notice issued in the instant case to Messrs Laxmi Stores was not either to a person or to a dealer. Therefore, it seems to us that the entire proceedings founded upon such a notice must be quashed. It is still open to the department to issue proper notices if they so choose and proceed with the assessments and/or recoveries if they think they are otherwise entitled to do so under law.
4. The petition is allowed and the notice dated 10th January, 1962, and the orders of assessment and penalty dated 5th December, 1960, are quashed. The guarantee given by the Central Bank at the instance of the petitioners shall be cancelled. The respondents will pay the costs of the petitioners.
5. Petition allowed.