Somnath Iyer, J.
1. In these two cases, the petitioners who call themselves as K. S. Subbarayappa and Sons, challenge the validity of two assessments made upon a dealer called K. S. Subbarayappa and Sons, on 23rd February, 1959, by the Commercial Tax Officer, Kolar Circle, Kolar, in respect of the assessment year 1956-57 and in respect of the transactions between 1st April, 1957, and 26th June, 1957, under the provisions of section 12 of the Mysore Sales Tax Act, 1948.
2. It is undisputed that during the relevant periods to which the assessments relate, the dealer who was carrying on transactions was being called K. S. Subbarayappa and Sons. But, it is explained that that dealer was a Hindu joint family consisting of a father and six sons. There was, according to the petitioner, a partition in the family on 27th June, 1957, putting an end to the joint family status of the members of that Hindu joint family. On 23rd February, 1959, on which date the impugned assessments were made, there was no Hindu joint family in existence and the fact that no such family existed on the date of the assessments is what is urged before us in support of the contention that the Commercial Tax Officer could not have made any assessments upon anyone when he made them.
3. That the dealer K. S. Subbarayappa and Sons was considered to be a joint Hindu family and treated as such during the time the transactions constituting the taxable turnover took place, is clear from the impugned orders of assessments. It is also obvious that the Commercial Tax Officer, when he made the assessments was aware of the fact that in that family there had been a partition and that the members of that family had after winding up the family business, commenced a partnership business under the same name and style under which the family was carrying on its business. But, he found no impediment in the making of assessments on the dealer who had carried on the transactions constituting the turnover.
4. It is urged on behalf of the petitioner, which does not state in its affidavit whether it has presented this application in its capacity as a firm which was created by the quondam members of the Hindu joint family or whether it is presented in its capacity as the dealer upon whom the assessments were made by the Commercial Tax Officer, that since the family which was the dealer during the relevant assessment year or period was no longer in existence at the time when the assessments were made, it was impossible for the Commercial Tax Officer to make any assessment. The argument advanced was that in order to bestow competence on the Commercial Tax Officer to make an assessment under the provisions of the Sales Tax Act, the dealer who carried on transactions during the assessment year should be in existence and should also be carrying on, at the time of the assessment, the business which he was carrying on during the assessment year, and that therefore if, when the Commercial Tax Officer makes an assessment, the dealer has disappeared or has ceased to exist or has wound up his business and is not carrying on the business which he was carrying on formerly, the Commercial Tax Officer has no power to make an assessment upon anyone.
5. To support this argument, reliance was placed by Mr. Srinivasan appearing on behalf of the petitioner, on the provisions of clauses (b) and (d) of section 2 of the Sales Tax Act, and upon section 3 of that Act. He points out to us that an assessee as defined by clause (b) of section 2 is a person by whom sales tax is payable, and that the definition of a dealer contained in clause (d) of that section reads :-
'2. Definitions. - In this Act, unless there is anything repugnant in the subject or context :-
(d) 'dealer' means any person who carries on the business of buying or selling goods in the State of Mysore whether for commission, remuneration or otherwise and includes -
(i) a State Government other than the Government of Mysore which carries on such business, and any society, club, firm or association, which sells goods to its members;
(ii) the manager or agent of a dealer who reside outside the State of Mysore and carries on the business of buying or selling goods in the State of Mysore.'
6. Section 3(1) on which he next relies reads :-
'3. Levy of taxes on sales of goods. - (1) Subject to the provisions of this Act -
(a) every dealer shall pay for each year a tax on his total turnover for such year; and * * *'
7. Mr. Srinivasan next adverted to section 12 which reads :-
'12. Procedure to be followed by assessing authority. - (1) Every dealer whose turnover is seven thousand five hundred rupees or more in a year shall submit such return or returns relating to his turnover in such manner, and within such period as may be prescribed.
(2) (a) If the assessing authority is satisfied that any return submitted under sub-section (1) is correct and complete he shall assess the dealer on the basis thereof.
(b) If no return is submitted by the dealer under sub-section (1) before the date prescribed or specified in that behalf or if the return submitted by him appears to the assessing authority to be incorrect or incomplete, the assessing authority shall assess the dealer to the best of him judgment :
Provided that before taking action under this clause the dealer shall be given a reasonable opportunity of proving the correctness and completeness of the return submitted by him.'
8. It seems to me that the argument presented that a dealer upon whom an assessment may be made under section 12 should be one who continues to carry on the business of buying or selling goods at the time when the order of assessment is made on him, does not rest on firm foundation. The words 'carries on' occurring in section 2(d) on which Mr. Srinivasan depends cannot, in my opinion, on their proper construction, assist the argument. What those two words in my opinion signify is that the dealer should have been carrying on the business of buying or selling goods at the relevant time, namely, during the period referable to the relevant assessment year and not that he should be carrying on such business even at the time when the assessment is made. The acceptance of the construction suggested by Mr. Srinivasan would lead to the strange result that a person who was carrying on the business of selling and buying goods the assessment year could escape an assessment under the Act by winding up his business just before the assessment is made upon him. A construction leading to such consequence should, in my opinion, not commend itself to us.
9. Turning to the second argument advanced, it is obvious from the language of section 12 that an assessment may be made upon a dealer and that the person upon whom an assessment may be made should be a dealer as defined by section 2(d) and he would be one, if he was carrying on the business of selling and buying goods during the assessment year, although he has stopped doing so at the time the assessment was made. But, it is equally clear that the person upon whom an assessment could be made under section 12 is the person who was carrying on the business of buying and selling goods at the relevant time, namely, during the period referable to the assessment year, and therefore, become a dealer within the meaning of the Act.
10. That K. S. Subbaraya Setty and Sons under which name and style the joint family of the seven persons composing it was carrying on the business of buying or selling goods in the State of Mysore, and was, therefore, a dealer within the meaning of the Act is not disputed. So, that family, as provided by section 3, which is the charging section, was liable to pay sales tax on its total turnover for the relevant assessment year or period. But, does the fact that in that family, there was a partition by the time the Commercial Tax Officer could make his assessments, make its members immune from the liability to pay the tax imposed by section 3 of the Act, or does it entitle the quondam members of that family to contend that, by reason of the partition which they made as between themselves before the Commercial Tax Officer made his assessments, the dealer which carried on the business during the assessment year had disappeared or had ceased to exist, and that therefore, there was no one upon whom the Commercial Tax Officer could make an assessment In support of the view that that contention is available to the quondam members of that Hindu joint family, Mr. Srinivasan submitted that the Hindu joint family which was the dealer in this case was a distinct legal entity from its members, and that that entity disappeared with the partition made between its members. He has asked our attention to the analogy which exists between a case where an assessee under the Income-tax Act dies before his income is assessed, in which case, as pointed out by their Lordships of the High Court of Bombay in Commissioner of Income-tax v. Ellis C. Reid (A.I.R. 1931 Bom. 335), no assessment could be made upon the legal representatives of the deceased assessee.
11. I find it difficult to accede to the contention that if a Hindu joint family carries on the business of buying and selling goods and is therefore a dealer as defined by section 2(d) of the Act, a partition in that family can bring into existence a situation in which it could be said that there was no longer any dealer upon whom an assessment could be made under section 12 of the Act. It is true that an assessment under that section could be made only upon a dealer and it is also true that even the amount of tax determined to be payable by an assessment so made is payable as provided by section 13 of the Act, by a dealer. It is, therefore, clear that a dealer should be in existence at least at three stages, namely, at the stage when the business of buying and selling goods is carried on, the stage at which an assessment is made and the stage at which the tax determined has to be paid or could be recovered. But, it will be seen from the scheme of the Sales Tax Act, that a Hindu joint family is not recognised by its provisions as a distinct unit apart from its members which could be assessed as a dealer, and it is equally clear that the Act makes no distinction for the purposes of the Act between a Hindu joint family and the group of members composing it. For the purposes of the Sales Tax Act, the unit which constitutes the dealer and upon whom an assessment may be made is that collection of persons who form the Hindu joint family and who engaged themselves in a family business, such as the business of buying and selling goods. Although for the purposes of the Hindu law, that collection of persons is a Hindu joint family, with peculiar legal incidents, those incidents for the purposes of the Sales Tax Act can have little relevance. If seven persons, as in this case, of whom a Hindu joint family is composed, compendiously constitute a dealer, although those seven persons under the Hindu law constitute a distinct legal entity such as a coparcenary or a Hindu joint family, for the purposes of the Sales Tax Act, they are no more than a group or collection of seven adventurers in trade, conveniently calling themselves by a trade name. If these seven persons effect, as between themselves, a partition, to say that that group which really was the dealer ceases to exist by reason of such partition would be to take the argument too far.
12. A Hindu joint family, for the purpose of the Sales Tax Act, is not really distinct or different from the members of which it consists. Since a Hindu joint family does not consist of any physical matter but is only a legal entity, the tax payable by it under the Act cannot be collected except from the persons who are or were its members.
13. It is a well recognised rule of Hindu law that the liability of a Hindu joint family to pay its debts is unaffected by a partition between its members and if that is the correct principle, it is difficult to understand how the liability of a Hindu joint family to pay sales tax in respect of its turnover can be brought to an end by a partition made after the liability is incurred and before an assessment is made by the Commercial Tax Officer. Section 3 of the Sales Tax Act which imposes sales tax on the turnover of a dealer makes a joint family liable to pay tax if it is the dealer, and the members of that family cannot, by bringing about a partition as between themselves before an assessment is made, escape from that liability to pay the tax due from the family.
14. In the case of a Hindu joint family, which is a dealer under the Sales Tax Act, its members are the real dealers and at the stage of assessment, whether the family exists without there being disruption of the family status or whether a partition has taken place in that family, it is, in my opinion, within the competence of the Commercial Tax Officer to make an assessment under section 12. In both cases, he would have the power to make an assessment upon the family as if it still exists and if he does so, he does no more than to give effect to the provisions of section 3 under which the family and its members were all liable to pay the tax in respect of the turnover referred to in it, and the quondam members would be plainly liable to pay the tax determined.
15. The same would be the position even when the collection of the tax has to be made under section 13 or when its recovery has to be made under its provisions.
16. Any other construction would lead to the result that by making partitions and reunions, just before the assessment and thereafter in succession, year after year, it would be possible for the members of a Hindu joint family to escape an assessment by effecting a division just before the assessment year and by again effecting a division immediately before the assessment. The interpretation pressed on us by Mr. Srinivasan would therefore enable the members of a Hindu joint family to defeat at all time, the provisions of the Sales Tax Act by such cleaver stratagems. We should not, in my opinion, acquiesce in a construction, which would result in such curious consequences.
17. Nor is there anything in rule 43 of the Rules made under the provisions of the new Mysore Sales Tax Act of 1957, to which our attention was drawn by Mr. Srinivasan, which would justify the interpretation for which he contended. That rule, it is true, expressly provides for the making of an assessment, whether a business carried on by a firm or a Hindu undivided family has been discontinued or dissolved, and permits an assessment being made upon the quondam partners of a firm and the quondam members of a Hindu joint family. Mr. Srinivasan asked us to contrast the provision of the Rules made under the old Sales Tax Act of 1948, and points out that there is no provision either in the old Act or in the Rules made thereunder corresponding to what is contained in rule 43 made under the new Mysore Sales Tax Act.
18. In my opinion, far from supporting the inference which Mr. Srinivasan asks us to draw, rule 43 framed under the new Act, does no more than merely declare what all along was the correct legal position in the case of Hindu joint families. Mr. Srinivasan asks us not to express an opinion on what the position was in the case of a partnership firm, and we abstain from doing so, and leave that question open to be decided at the appropriate stage.
19. In my opinion, these two writ petitions must therefore fail and should be dismissed. It is so ordered.
20. In the circumstances, there will be no order as to costs.
Iqbal Hussain, J.
21. I agree.
22. Petitions dismissed.