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Kishanlal Oil Mills (by Its Partner Mohanlal) Vs. State of Andhra Pradesh and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberTax Revision Case Nos. 21 and 22 of 1966 and Writ Petition Nos. 718 and 719 of 1966
Judge
Reported in[1969]24STC304(AP)
AppellantKishanlal Oil Mills (by Its Partner Mohanlal)
RespondentState of Andhra Pradesh and anr.
Appellant AdvocateT. Anantha Babu, Adv.
Respondent AdvocatePrincipal Government Pleader
DispositionPetition dismissed
Excerpt:
- - ramakrishnaiah endorsed that the question of limitation was not being urged any more. 430 and holding that the ratio of that decision applied to the facts of this case, the tribunal held that the contention of the dealer was well-founded. 6. it is also to be mentioned that no point was taken before the tribunal that the assessments in question pertained to a dissolved firm and as such the assessments were bad in law. -(1) within ninety days from the date on which an order under sub-section (4) of section 21 was communicated to him, the dealer or the authority prescribed in this behalf may prefer a petition to the high court against the order on the ground that the appellate tribunal has either decided erroneously, or failed to decide, any question of law. ..9. it is difficult to.....p. basi reddy, ag. c.j.1. these tax revision cases and writ petitions have been filed by one mohanlal, a quondam partner of the firm of m/s. b. kishanlal oil mills, hyderabad. the petitioner in all these matters is shown as m/s. b. kishanlal oil mills, hyderabad, by its partner mohanlal. all these matters arise out of assessments under the sales tax act for the assessment years 1953-54 and 1954-55. by a demand notice dated december 26, 1965, which was served on mohanlal on january 31, 1966, he was required to pay a sum of rs. 52,854.88 in respect of assessment no. 5/1953-54 and a sum of rs. 38,399.62 in respect of assessment no. 5/1954-55, being the arrears of tax still due and unpaid by the firm of m/s. b. kishanlal oil mills.2. we will first deal with the tax revision cases. the.....
Judgment:

P. Basi Reddy, Ag. C.J.

1. These tax revision cases and writ petitions have been filed by one Mohanlal, a quondam partner of the firm of M/s. B. Kishanlal Oil Mills, Hyderabad. The petitioner in all these matters is shown as M/s. B. Kishanlal Oil Mills, Hyderabad, by its partner Mohanlal. All these matters arise out of assessments under the Sales Tax Act for the assessment years 1953-54 and 1954-55. By a demand notice dated December 26, 1965, which was served on Mohanlal on January 31, 1966, he was required to pay a sum of Rs. 52,854.88 in respect of assessment No. 5/1953-54 and a sum of Rs. 38,399.62 in respect of assessment No. 5/1954-55, being the arrears of tax still due and unpaid by the firm of M/s. B. Kishanlal Oil Mills.

2. We will first deal with the tax revision cases. The assessment of the dealer, which was the firm of M/s. B. Kishanlal Oil Mills, for the years 1953-54 and 1954-55 was originally made on October 28, 1959. The assessment orders and demand notices were served on November 5, 1959, and November 6, 1959, respectively on Kishanlal, one of the partners who was apparently in management of the firm's business. The dealer preferred appeals against the assessments for both the years. The Assistant Commissioner of Commercial Taxes, Hyderabad Division, in Appeal Orders Nos. 391/59-60 dated March 17, 1964, and 392/59-60 dated March 17, 1964, dismissed both the appeals. The dealer then preferred appeals to the Sales Tax Appellate Tribunal. The Tribunal by its judgment in Appeals Nos. 533, 537, 493 and 467 of 1964 dated May 21, 1965, allowed the appeals in part.

3. It is necessary to refer to the findings recorded by the Tribunal in its common order dated May 21, 1965, covering all the appeals before it, namely, Tribunal Appeals Nos. 533, 537, 493 and 467 of 1964. The following are the findings :-

1. Appeals Nos. 533/64 and 537/64 relate to the assessments for the two years 1953-54 and 1954-55. Though according to the memorandum of appeal the appellants M/s. B. Kishanlal Oil Mills, disputed the entire turnovers assessed, namely Rs. 38,75,496-10-0 and Rs. 37,19,720-6-0 on the ground that they were barred by limitation, their learned counsel Sri A.V.S. Ramakrishnaiah endorsed that the question of limitation was not being urged any more. Consequently the dispute on other grounds covered a sum of Rs. 3,05,269-15-0 in T.A. 533/64 and Rs. 5,71,991-5-11 in T.A. 537/64.

2. Again in T.A. 533/64, the learned counsel submitted that he was not pressing the appeal in respect of a sum of Rs. 72,567-8-3 because the detailed statement of the transactions filed before us covered Rs. 2,32,702-6-9.

4. Having recorded those findings, the Tribunal went on to consider the point so far as Appeal No. 533 of 1964 was concerned, whether the transactions in question were outside sales within the meaning of Explanation to Article 286(1)(a) of the Constitution. After referring to the decision of the Supreme Court in Bajrang Jute Mills v. State of Andhra Pradesh [1964] 15 S.T.C. 430 and holding that the ratio of that decision applied to the facts of this case, the Tribunal held that the contention of the dealer was well-founded. It said :

Accordingly the appeal T.A. 533/64 is allowed to the extent of the turnover of Rs. 2,32,702-6-9 and dismissed as not pressed in respect of the balance of the disputed turnover.

5. Then as regards T.A. 537 of 1964, it found that a turnover of Rs. 5,50,368-4-8 will have to be allowed as sales effected outside the State for the same reasons as stated in T.A. No. 533 of 1964. The further relief in respect of Rs. 21,623-1-3 was also granted on another ground.

6. It is also to be mentioned that no point was taken before the Tribunal that the assessments in question pertained to a dissolved firm and as such the assessments were bad in law.

7. It is against this order that the two tax revision cases have been filed as T.R.Cs. Nos. 21 and 22. They purport to have been filed by M/s. Kishanlal Oil Mills, Hyderabad, by its partner Mohanlal. The appellant before the Tribunal was M/s. Kishanlal Oil Mills, Hyderabad, and the firm was represented by an Advocate when the matter was argued before the Tribunal and considered by it. Now in the memorandum of tax revision cases which were filed under Sections 22(1) and 41 of the Andhra Pradesh General Sales Tax Act (hereinafter referred to as the Act) two grounds taken are first, that the assessments in question were barred by limitation, and secondly, that the assessments made on the firm after its dissolution are not permissible in law. The questions of law raised for decision by the High Court are formulated thus :-

1. Is the assessment barred by limitation ?

2. Is not the Tribunal bound to decide the question of limitation, whether it be urged or not ?

3. Is the assessment made on the firm after its dissolution permissible

8. Now Section 22 of the Act is in these terms :

Revision by High Court.-(1) Within ninety days from the date on which an order under Sub-section (4) of Section 21 was communicated to him, the dealer or the authority prescribed in this behalf may prefer a petition to the High Court against the order on the ground that the Appellate Tribunal has either decided erroneously, or failed to decide, any question of law....

9. It is difficult to see in the present cases how it can possibly be contended that the Appellate Tribunal decided any question of law erroneously, or failed to decide any question of law. Apart altogether from the question whether there is any merit in the point of limitation, when a point of law is expressly given up by an Advocate appearing before the Tribunal-and it must have been advisedly-it is a far-fetched contention that the Appellate Tribunal had failed to decide the question of law. We are, therefore, of opinion that the question of limitation cannot be agitated in this court in a revision filed under Section 22 of the Act. Even less tenable is the second point taken in the tax revision cases, namely, that the assessment made on the firm after its dissolution, was bad in law. That point was not even hinted before the Tribunal and so it cannot by any show of reason be contended that the Appellate Tribunal has decided that question erroneously or failed to decide that question. It follows that these two tax revision cases must fail and are dismissed, but, in the circumstances, without costs.

10. We now turn to the writ petitions. As pointed out already, Writ Petition No. 718 relates to the demand notice in respect of the assessment year 1953-54 and Writ Petition No. 719 relates to the demand notice in respect of the assessment year 1954-55. These two demand notices were served on Mohanlal, who is the de facto petitioner in these two writ petitions, obviously on the ground that he was one of the partners of M/s. Kishanlal Oil Mills, Hyderabad, during the relevant periods. The case of Mohanlal, as set out in the affidavit filed in W.P. No. 718 (which is the same in the other writ petition also) is as follows : He and his father, late Rameswara Prasad, had entered into a partnership with Kishanlal, Bhagwandas and Madanlal for carrying on business of oil milling and refining under the name and style of B. Kishanlal Oil Mills and Refinery at Musheerabad, Hyderabad. A deed of partnership was executed on 25th Sarwadhari, 1356 Fasli. Subsequently as Bhagwandas died, his son Hariprasad was brought in as a partner in his place and a fresh partnership was constituted. A partnership deed was duly executed on November 28, 1950.

11. The firm was registered as a dealer under the provisions of the Hyderabad General Sales Tax Act. It carried on business in oil etc., till February 12, 1957, on which date Mohanlal and his father Rameswar Prasad retired from the firm and the firm was dissolved. A deed of dissolution was executed on March 30, 1957. That deed of dissolution provided inter alia that the accounts should be finalised up to the date of dissolution after providing for gratuities and amounts payable to workers, employees and others, rates, taxes, sales tax, excise tax etc. It was also provided that after the accounts were settled, the amounts available to the credit of the retired partners, that is to say, Mohanlal and his father, should be paid to them within three years by the continuing partners. The entire business was taken over by the remaining partners. It is further averred : 'This fact was intimated to the sales tax and other authorities.' Thereafter the business was carried on by the other partners and another Shankerlal Jagadish Pershad, who was admitted as a partner from February 13, 1957. That partnership again was dissolved on July 15, 1957. All the assets were now left to Hariprasad. The other three partners retired. The same business was being carried on from that time onwards by Hariprasad under the name and style of B. Rajendra Oil Mills and Refinery.

12. The further case of the petitioner is that he and his father had retired from the firm and it was the duty and obligation of the continuing partners to look after the tax proceedings. He and his father had faith in the erstwhile partners and so they did not keep themselves in touch with all details of the tax proceedings. Furthermore, a sum of Rs. 75,000 was set apart for payment of the sales tax in the partnership accounts and so they (Mohanlal and his father) assumed that the taxes due would be duly paid therefrom.

13. Mohanlal's father Rameswar Prasad died on December 15, 1958, and Mohanlal became entitled to all his assets. Time rolled on and despite repeated requests the partnership accounts were not finally settled and large amounts due to Mohanlal and his father were not paid to them and so he was constrained to file a suit against the dissolved firm in 1963. It is stated that the suit, O.S. No. 30 of 1963, is still pending in the City Civil Court, Hyderabad.

14. Then on January 31, 1966, the petitioner (Mohanlal) was served with two notices of demand for sums of Rs. 52,854.88 as tax for 1953-54 and Rs. 38,399.62 as tax for 1954-55. The said notices were issued to B. Kishanlal Oil Mills and underneath that name five names inclusive of the names of the petitioner and his late father were mentioned. (All these were the erstwhile partners of the firm of B. Kishanlal Oil Mills).

15. The petitioner's case is that he was under the impression that all the tax dues of the partnership had been paid from the sum of Rs. 75,000 which was earmarked for that purpose when he and his father broke away from the partnership. The petitioner then goes on to allege the following :

I then made enquiries and learnt the following facts. It would appear that the sales tax assessments of the firm relating to the years 1953-54 and 1954-55 were actually made on October 28, 1959. No notice was issued to the petitioner. My father had died earlier as already stated. The Commercial Tax Officer purported to assess the firm although he should have invoked the procedure under Rule 22, if at all, and assessed the individual partners after due notice and enquiry. Even after assessments were made, no demand notices were served on me. I had no opportunity even to know what was happening. It would appear that the assessments were appealed against first to the appellate authority and thereafter to the Tribunal and some relief was secured. I was kept in the dark about all these proceedings. After the demand notices were served, I applied to the Tribunal for a copy of its orders in the appeals. The order of the Tribunal discloses the following curious facts. It would appear that the Advocate arguing the appeals made an endorsement that he was not pressing the plea of limitation. Why such a course of action became necessary is not known. The plea is one of law, which is vital to the case. The petitioner is advised it. is a very substantial argument- not a frivolous one. Even if it lacked substance, it was for the Tribunal to say so and not for counsel.... It was also not brought to the notice of the Tribunal that the assessee was a dissolved firm and so the assessment was bad in law. These submissions are being made only with a view to substantiate the plea of the petitioner that he has had a raw deal and the whole case was mismanaged. Subsequent to the Tribunal's judgment, revised assessment orders were passed on December 26, 1965. Even at that stage no notice was given to the petitioner.

16. Then the petitioner goes on to indicate the points in support of the writ petition and they are :

1. That the assessments for 1953-54 and 1954-55 were made on October 28, 1959, after the period prescribed by law for making assessments and so the orders are barred by limitation and are accordingly void. No demand of tax could issue on the basis of such orders. The point is further elaborated by stating that the transactions occurred at a time when the Hyderabad General Sales Tax Act was in force, but the assessments were made after the Andhra Pradesh General Sales Tax Act came into force.' The affidavit goes on to say :

It is submitted that these are cases where no returns were filed and so Rule 32 of the Hyderabad General Tax Rules which prescribes a period of three years governs them. In the alternative Section 14(1) or Section 14(4) of the Andhra Pradesh General Sales Tax Act which prescribes a period of four years is applicable. Even if the assessments are treated as original assessments, they are made under Section 14(1) of the Andhra Pradesh General Sales Tax Act and so they are barred.2. The assessee-firm was dissolved on February 12, 1957, and that fact was brought to the notice of the authorities. Assessments were made on the dissolved firm. The Hyderabad General Sales Tax Act does not provide for assessments on a dissolved firm. The Supreme Court held that in the absence of a specific provision in the statute, a dissolved firm cannot be assessed to tax....

3. Further no notice was issued to the petitioner or his father. They had no opportunity to show cause.

17. On these grounds the petitioner stated that the proposed recoveries of tax are contrary to Article 265 of the Constitution which lays down that no tax shall be levied or collected except by authority of law. The petitioner accordingly sought writs of certiorari in both the writ petitions to quash the impugned demand notices.

18. In the counter-affidavit filed by the Commercial Tax Officer on behalf of the State of Andhra Pradesh it is stated inter alia that no intimation of the dissolution of the firm of Kishanlal Oil Mills was ever given by Mohanlal to the authorities ; that the sales tax authorities were not aware of the disputes between the partners; that as regards the alleged setting apart of a sum of Rs. 75,000 for payment of sales tax, the other partners who had been contacted had stated that they had no personal knowledge of the matter and they could not say anything unless they saw the books of account which were in the City Civil Court, Hyderabad; that in respect of the assessment for the two years, the assessment orders and the demand notices were served on one of the partners who was in charge of the affairs of the firm on November 5, 1959, and November 6, 1959; that the dealer filed appeals against the assessments for both the years; that the appeals were dismissed by the Assistant Commissioner; that the dealer thereafter preferred further appeals to the Sales Tax Appellate Tribunal and that the Tribunal by its order dated May 21, 1965, had allowed the appeals in part and given some substantial relief to the firm and that there is no illegality or irregularity in the procedure followed by the authorities constituted under the Act.

19. It is further stated as regards the question of limitation that there is no time-limit for making assessments under the Hyderabad General Sales Tax Act, 1950, except in cases of escaped turnovers. The instant cases were not cases of escaped turnovers. It is further averred that the assessment proceedings were initiated in October, 1955, when the firm was in existence; therefore the making of the original assessment orders on October 28, 1959, was perfectly in order. Moreover the partners of the firm did not intimate the fact of dissolution to the assessing authority.

20. It is also stated that the application of the provisions of the Andhra Pradesh General Sales Tax Act, 1957, to the assessments in question is saved by the provisions of Section 41 of that Act. Further under Rule 22 of the Andhra Pradesh General Sales Tax Rules, 1957, the partners of the firm are jointly and severally responsible for the payment of taxes due. The proceedings dated December 26, 1955, by the Commercial Tax Officer are merely taken for the purpose of giving effect to the orders of the Tribunal.

21. It will be observed that the main plank of the petitioner's case in the writ petitions was based on the Supreme Court rulings in State of Punjab v. Jullundur Vegetables Syndicate ([1966] 17 S.T.C. 326) and Additional Tahsildar v. Gendalal ([1968] 21 S.T.C. 263), wherein it was held that though under the partnership law a firm is not a legal entity but only consists of individual partners for the time being for tax law, income-tax as well as sales tax, it is a legal entity; that on the dissolution of the firm it ceases to be a legal entity and on principle, thereafter, unless there is a statutory provision permitting the assessment of a dissolved firm, there is no longer any scope for assessing the firm, which ceases to have legal existence; that there cannot also be a distinction in principle between an assessment made on a firm under a proceeding initiated before its dissolution and one made in proceedings started after the dissolution; that in either case, unless there is an express provision, no assessment can be made on a firm which has lost its character as an assessable entity; and so, the assessment of a firm made after its dissolution, in the absence of a specific statutory provision, is legally invalid.

22. These writ petitions were filed on June 22, 1966, and were finally admitted on July 12, 1966, and have been pending in this court since then. During this period, the Andhra Pradesh General Sales Tax (Amendment) Act, 1968 (5 of 1968) was passed by the State Legislature and it received the assent of the President on June 17, 1968, and the assent was published on June 25, 1968, in the Andhra Pradesh Gazette. This Act amongst other things introduced a new Section 15-B which was inserted after Section 15-A of the Act. That section reads thus:

Insertion of new Section 15-B -After Section 15-A of the principal Act, the following section shall be, and shall be deemed always to have been, inserted, namely :-

'15-B. Discontinuance of business or dissolution.-(1) Where any business carried on by a firm, a Hindu undivided family or an association has been discontinued or the firm, Hindu undivided family or association has been dissolved, the assessing authority shall make an assessment of the turnover of the firm, Hindu undivided family or association, as the case may be, as if no such discontinuance or dissolution had taken place and all the provisions of this Act, including the provisions relating to the levy of a penalty or any other sum chargeable under any provision of this Act, shall, so far as may be, apply to such assessment.

(2) Where such discontinuance or dissolution takes place after any proceeding in respect of an assessment for any year has commenced, the proceeding may be continued against every person who was, at the time of such discontinuance or dissolution, a partner of such firm or a member of such Hindu undivided family or association, as the case may be, or the legal representative of any such person who is deceased, from the stage at which the proceeding stood at the time of such discontinuance or dissolution, and all the provisions of this Act shall, so far as may be, apply accordingly.

23. This provision was obviously enacted by the State Legislature with a view to meet the legal objection envisaged by the Supreme Court rulings referred to supra which laid down that in the absence of an express provision in the statute, an assessment on a dissolved firm was bad in law. The result is that whatever validity there might have been to the contention of the petitioner on this point, it has since lost all its validity because by reason of the new Section 15-B which is deemed to have always been present in the Act, an assessment on a dissolved firm and the recovery of tax in pursuance of such assessment is good in law. This position is not seriously disputed by Mr. Anantha Babu, the learned Advocate for the petitioner.

24. The learned Advocate has, however, advanced other contentions with which we will deal in order. His first submission was that the assessment proceedings in the instant cases have become barred by limitation as more than three years had elapsed from the end of the assessment year as per Rule 32 of the Hyderabad General Sales Tax Rules, 1950; and alternatively, that even if Section 14 of the Act is held to apply, the period of limitation is four years from the close of the year for which the assessment was made and as the assessments in question were made on October 28, 1959, they were barred by limitation.

25. We are clearly of opinion that there is no force in this contention. Unquestionably, in the instant cases, assessment proceedings were started in the year 1954 itself when the firm of M/s. Kishanlal Oil Mills submitted their return. It appears from the order of the Commercial Tax Officer dated October 28, 1959, that M/s. B. Kishanlal Oil Mills filed a return disclosing certain turnovers for the period from April 1, 1953, to November 6, 1953, in respect of the assessment year 1953-54. So also in respect of the assessment year 1954-55 the firm filed a return in the year 1954 itself. Hence these are not cases where no return was submitted at all and no question of escaped assessment arises. Therefore it is not Rule 32 of the Hyderabad General Sales Tax Rules that governs these cases, but the provisions of the Hyderabad General Sales Tax Act itself. That Act did not prescribe any period of limitation for original assessments. Now by Section 41 of the Act, the Hyderabad General Sales Tax Act, 1950, and some other Acts were repealed, but the proviso to Section 41 is of vital significance and it reads thus :

Provided that such repeal shall not affect the previous operation of the said Acts or section or any right, title, obligation or liability already acquired, accrued or incurred thereunder, and subject thereto, anything done or any action taken (including any appointment, notification, notice, order, rule, form, regulation, certificate, licence or permit) in the exercise of any power conferred by or under the said Acts or section shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act, as if this Act were in force on the date on which such thing was done or action was taken ; and all arrears of tax and other amounts due at the commencement of this Act may be recovered as if they had accrued under this Act.

26. The present cases are cases where assessment proceedings were started as early as 1954 in which year returns were filed. These are cases of original assessments with reference to the returns and the materials produced for check. For an original assessment there is no time-limit under the Hyderabad General Sales Tax Act, 1950. This substantial right of making an original assessment without time-limit under the Hyderabad General Sales Tax Act, viewed from the point of view of the revenue, or a liability already incurred, viewed from the point of view of the taxpayer, has been saved by the proviso to Section 41 of the Act.

27. That being so, the period of limitation prescribed by Section 14 of the Act cannot have any application, because under the proviso to Section 41, the right of the State Government to assess dealers governed by the provisions of the Hyderabad General Sales Tax Act without any time-limit in the case of original assessments, is saved.

28. We are fortified in this view by a decision of a Division Bench of this Court consisting of Kumarayya and Obul Reddy, JJ., in Writ Petition No. 1421 of 1963 (Since reported as S.L. Ramanatham v. Commissioner of Commercial Taxes, Andhra Pradesh [1969] 23 S.T.C. 249). There the question was also one of limitation, but it related to the power of revision and the question was whether that power was exercisable under Section 15 of the Hyderabad General Sales Tax Act or under Section 20 of the Andhra Pradesh General Sales Tax Act. Whereas Section 20 of the Andhra Pradesh General Sales Tax Act laid down that the revisional powers would be exercisable only for a period not exceeding four years from the date on which the order was served on the dealer, no such time-limit was prescribed in Section 15 of the Hyderabad General Sales Tax Act, for exercising the powers of revision.

29. In dealing with this question, the learned Judges observed as follows :

That being the main point of difference between the two provisions, we have to see whether the liability of the assessee to be subjected to the power of revision in relation to assessment for the period covered by the repealed Act still remains intact, unaffected by the operation of the repealing Act. For this, we have to look to the saving clause in the repealing Act....

30. After quoting Section 41 of the Andhra Pradesh General Sales Tax Act, the learned Judges proceeded to observe :

It is manifest that the proviso clearly protects inter alia, rights, title, obligation or liability already acquired, accrued or incurred under the repealed Act, and it is only subject thereto, that anything done or any action taken, including any notice, order etc. issued in the exercise of any power conferred by or under the said Acts shall be deemed to have been done in the exercise of the powers conferred by or under the present Act, as if the present Act were in force on the date on which such thing was done or action was taken.

31. Then, after noting the rival contentions and referring to the cases cited before them, the learned Judges summed up their conclusion thus:

In the present case, it is abundantly clear that the assessment proceedings had commenced before the advent of the Andhra Pradesh General Sales Tax Act (see Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax A.I.R. 1964 S.C. 766). By the time the new Act came into force the petitioner had already submitted his monthly returns. The order of assessment was, however, made subsequently. He was assessed to the same tax as was due under the terms of the Hyderabad General Sales Tax Act. Under the terms of the same Act, a competent authority could suo motu, in exercise of the powers of revision, reassess him at any time subject to the conditions prescribed. The petitioner cannot successfully set up the provisions of the repealing Act to evade this liability which in point of fact was in terms saved by the said Act.

32. We respectfully agree with the reasoning and conclusion of the learned Judges in the above decision.

33. The controversy is really set at rest and the matter is no longer res integra in view of the decision of the Supreme Court in Swastik Oil Mills Ltd. v. H.B. Munshi [1968] 21 S.T.C. 383. In that case one of the questions that fell for decision was, where the assessments to sales tax were made under the Bombay Sales Tax Act, 1946, under which there was no period of limitation prescribed for exercise of revisional powers by the Deputy Commissioner but the revisional jurisdiction was actually exercised after the repeal of the 1946 Act and after the advent of the Bombay Sales Tax Act of 1959, which prescribed a period of limitation, whether the assessee could claim that the revisional jurisdiction can be exercised by the Deputy Commissioner under the Act of 1959 and not under the Act of 1946. Their Lordships of the Supreme Court held that inasmuch as notwithstanding the repeal of the Act of 1946, the effect of the saving provisions of the repealing Act, which are similar to the saving provisions contained in the Act with which we are concerned, was to continue in force the Bombay Sales Tax Act of 1946 to the extent it was in force when the Act of 1959 came into force. Those purposes included levy, assessment, reassessment and collection of sales tax, so that the proceedings against the assessee which had been initiated under the Act of 1946 continued to be governed by the provisions of that Act. The repeal of the 1946 Act by the Act of 1959 did not affect the rights and liabilities of the assessee to tax under the 1946 Act, in respect of the turnover which became liable to sales tax under the 1946 Act. Consequently the repeal of the 1946 Act did not in any way affect the power of the Deputy Commissioner to institute proceedings for revision suo motu against the appellate order of the Assistant Collector, which was passed in exercise of his powers under the 1946 Act, and that since there was no period of limitation for the exercise of the revisional powers under the 1946 Act, no such limitation could necessarily be read into that Act, despite the fact that the repealing Act of 1959 did prescribe a period of limitation for that purpose. It follows that the contention on behalf of the petitioner based on the point of limitation, must fail.

34. The next contention was that since no separate notices were served on the petitioner in the course of the assessment proceedings, although the firm had been dissolved and he had severed his connections with the firm, the assessment in question and the demands are against the principles of natural justice. There is no substance in this contention either. Beyond doubt or dispute the dealer in the instant case at all material times was the firm of M/s. Kishanlal Oil Mills. The returns for the two years were submitted by the partner who was in charge of the affairs of the firm and in the course of the proceedings, notices were admittedly served on him and he submitted the returns. He made representations to the authorities-at the stage of assessment, and at the stages of first appeal and second appeal raised contentions against the legality and validity of the assessment proceedings, and his representations were duly considered by the authorities and the firm got some substantial relief in the end. The assertion of Mohanlal, the petitioner in these writ petitions, that the fact of dissolution of the firm had been intimated to the authorities, has been stoutly denied in the counter-affidavit filed on behalf of the respondent. That being so, and the liability to tax being joint and several in the case of a partnership firm, it is neither good law nor good sense to require that every individual partner should be served with notices in the course of the tax proceedings, during the subsistence of the partnership and even after its dissolution. This point was considered by Gopalakrishnan Nair, J., in Writ Petitions Nos. 276 and 350 of 1964 and the learned Judge took the view that where a managing partner of a firm had been served with a notice under Section 14(1) of the Act but no separate notices had been issued to the petitioner in that case, who was one of the partners but the managing partner had submitted the returns and contested the assessment proceedings before the assessing authority by producing the relevant records and by filing written objections, the contention that under Section 14(1) of the Act, notice should have been given not only to the managing partner of the firm but to every one of the partners of the firm after its dissolution, was unsustainable. The reasons given by the learned Judge are that what Section 14(1) requires is that the dealer should be given a reasonable opportunity of proving the correctness and completeness of the return submitted and the dealer in that case was the firm, and so the quondam partners of the assessee-firm cannot be considered to be dealers ; and secondly, the managing partner to whom notices had been served under Section 14(1) had submitted returns, produced account books and made representations. We entirely agree with the view of the learned Judge that in the case of a partnership firm, notice under the Andhra Pradesh General Sales Tax Act need be given only to the managing partner or the partner who is in charge of the affairs of the firm, except where a firm is dissolved and the fact of dissolution is intimated to the authorities. In the present case, there is no satisfactory evidence that the fact of dissolution had ever been intimated to the sales tax authorities. On the contrary, throughout all the stages of the proceedings under the Sales Tax Act, the firm was represented and duly represented by one of the partners who was in management of the firm. It is, therefore, idle to contend that all the proceedings taken by the assessing authority, the first appellate authority and the second appellate authority, are void for the reason that no separate notice was served on the petitioner (Mohanlal) although he had severed his connection with the firm.

35. It is submitted by Mr. Anantha Babu that in any case under Rule 51-A of the Andhra Pradesh General Sales Tax Rules, a direction might be given that the tax due may be recovered in the first instance from the properties of the firm, before the sales tax authorities proceed against the petitioner. Rule 51-A is in these terms :

In case of default of payment of the tax, penalty or any fee leviable under the Act, the properties of the firm may be proceeded against in the first instance for the recovery of the amount due from the firm.

36. The terms of thi9 rule are clear enough, and it gives the authority a discretion to prooeed against the properties of the firm in the first instance. The authorities may be expected to act fairly and justly, keeping in view the provisions of this rule. We do not think it necessary to issue a direction in this regard.

37. In the result, these writ petitions fail and are dismissed-Writ Petition No. 718 of 1966 with costs; Advocate's fee Rs. 250-and Writ Petition No. 719 of 1966 without costs.


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