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The Chief Commissioner of Sales Tax Vs. Raj Kishan Goel - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtDelhi High Court
Decided On
Case NumberLetter Patent Appeal Nos. 99 of 1975 and 94 of 1977
Judge
Reported in21(1982)DLT15; [1982]50STC1(Delhi)
ActsBengal Finance (Sales Tax) Act, 1941 - Sections 2; Delhi Sales Tax Rules, 1951 - Rule 10
AppellantThe Chief Commissioner of Sales Tax
RespondentRaj Kishan Goel
Advocates: R.C. Chawla,; B.B. Ahuja,; S.R. Bhagat and;
Cases ReferredState of Punjab v. Ms
Excerpt:
sales tax - assessment - section 2 of bengal finance (sales tax ) act, 1941 and rule 10 of delhi sales tax rules, 1951 - whether firm continues to be liable to pay tax under local act even after its dissolution on its pre dissolution turn over - no express or any implied provision containing power to assess dissolved firm for its pre dissolution turnover until lacuna filled up by inserting section 12-f. - - as the firm agreed to carry on business as a dealer, it was got registered under the provisions of the bengal finance (sales tax) act, 1941 as extended to the union territory of delhi (for short called the local act) and the delhi sales tax rules, 1951 (for short called the rules) as well as under the central sales tax act, 1956 (for short called the central act) and the central.....s.s. chadha, j. (1) under the bengal finance (sales tax) act, 1941 as extended to the union territory of delhi and the delhi sales tax rules, 1951 there was no express provision to assess or reassess a dissolved firm in respect of its pre-dissolution turnover until the amendment was made on may 23, 1972 when section 12-f was inserted. the question is whether such a power in the assessing authority can be gathered by necessary implication from the other provisions of the said act. (2) by an instrument of partnership executed on february 10, 1962 amongst hans raj mehra, kesri dass jain, t. l. tandon arid raj kishan goyal, they agreed to carry on business as sole distributors of i.e.w. fans for northern zone under the name and style of 'm/s. hari trading corporation' (for short called the.....
Judgment:

S.S. Chadha, J.

(1) Under the Bengal Finance (Sales Tax) Act, 1941 as extended to the Union Territory of Delhi and the Delhi Sales Tax Rules, 1951 there was no express provision to assess or reassess a dissolved firm in respect of its pre-dissolution turnover until the amendment was made on May 23, 1972 when Section 12-F was inserted. The question is Whether such a power in the assessing authority can be gathered by necessary implication from the other provisions of the said Act.

(2) By an instrument of partnership executed on February 10, 1962 amongst Hans Raj Mehra, Kesri Dass Jain, T. L. Tandon arid Raj Kishan Goyal, they agreed to carry on business as sole distributors of I.E.W. Fans for Northern zone under the name and style of 'M/s. Hari Trading Corporation' (for short called the firm) on the terms and conditions mentioned in the said deed. As the firm agreed to carry On business as a dealer, it was got registered under the provisions of the Bengal Finance (Sales Tax) Act, 1941 as extended to the Union Territory of Delhi (for short called the local Act) and the Delhi Sales Tax Rules, 1951 (for short called the Rules) as well as under the Central Sales Tax Act, 1956 (for short called the Central Act) and the Central Sales Tax Rules, 1957. The Local Sales Tax Rigstration Certificate bearing No. 27493 dated March 30, 1962 and the 'Central Sales Tax Registration Certificate bearing No. 15730 dated March 30, 1962 were issued. The partnership business continued up to January 25. 1965 when a deed of dissolution was executed between the said partics, and T. L. Tandon agreed to continue the business under the same name and style of the firm on taking over the entire assets and liabilities. Subsequently, on January 25, 1965 another partnership deed was executed amongst T. L. Tandon, Raj Kishan Goyal, Raj Kumar Jain and Pawan Kumar which, inter alia, provided that the partnership concern being constituted under the deed of partnership was to take over all the assets and liablities of M/s. Hari Trading Corporation as embodied in the balance-sheet drawn for the period up to January 24, 1965 when the business was owned as a sole proprietorship concern of T. L. Tandon. T. L. Tandon died on March 22, 1966. An intimation about the death of T. L. Tandon was sent in the letter dated. May 19, 1966 to. the Sales-tax Officer, Ward, No. Xvi, Delhi written by a counsel on behalf of the firm'. According to the terms of the deed of partnership dated January 25, 1965. the legal heirs of a deceased partner could be invited to join the surviving partners' but it was decided not to continue the business any further and a deed of dissolution was executed amongst the surviving partners of the firm and the legal representatives of the deceased partner. The information in respect of the dissolution of the firm and discontinuance of its business was given to the Sales-tax Officer in the counsel's letter dated June 23, 1966. The Local Sales Tax Registration Certificate as well as the Central Sales Tax Registration Certrficate were sent along with the letter with a prayer for cancellation. A notice was published in the Indian Express on June 27, 1966 that the firm i.e. 'M/s. Hari Trading Corporation' had been dissolved due to the death of T. L. Tandon. Notice to the same effect was also published in the Delhi Gazette, Delhi Administration dated June 30, 1966.

(3) The assessments of the firm under the Local Act and the Central Act for the years 1962-63 onwards were pending at the time when the firm was dissolved and discontinued its business. Information is not available on this record whether any notices were issued to and served on the firm for assessment before the dissolution of the firm for the pending assessments for the years 1962-63 and onwards. It is, however, not material as there is no distinction in law between an assessment made of a dissolved firm under a proceeding started before its dissolution and one made in a proceeding initiated after its dissolution. Some of the assessments' were made for the period in question only after the fact of the dissolution of the firm had been brought to the notice of the assessing authorities. Those assessment orders have been challenged by Raj Kishan Goyal in two writ petitions out of which the present appeals have arisen and a prayer was also made that the assessing authorities should be restrained from further proceeding in the matter of assessment of the dissolved firm. The remaining assessments were allowed to be made under the orders of the Court during the pendency of the petitions but a restraint was placed that no demands be made against the dissolved firm. The copies of the assessment orders passed during the pendency of the petitions were placed on the record.

(4) The main contention before the learned Single Judge was that neither under the Local Act nor under the Central Act there is any statutory provision permitting the assessment of a dissolved firm in respect of its predissolution turnover. Reliance was placed for the submission on the law laid down by the Supreme Court in 'State of Punjab v. Ms, Jullundur Syndicate' : [1966]2SCR457 , a case arising out of the provisions of East Punjab General Sales Tax Act, 1948 and its Rules. After comparing the provisions of the Local Act and the Rules with the Punjab Act and the Rules and finding them in pari materia, the learned Single Judge accepted the petition and quashed the assessments) made after the dissolution of the firm by the assessing authorities. This appeal and the connected appeal under Clause X of the Letters Patent have been filed by the Commissioner of Sales-tax. The main question raised in the appeals again is whether the sales-tax under the Local Act and the Rules payable by afirm in respect of its predissolution tarnover could not be assessed after the dissolution of the firm. When the appeal came up for hearing before a Division Bench of this Court, the counsel for the appellant relied strongly on a subsequent decision of the Supreme Court in 'Murarilal Mahavir Pershad V. B. R. Vad', (1976) 37 S.T.C. 77 concerned with assessment under the Bombay Sales-tax Acts of 1953 and 1959 which case had spelt out the power of assessment and reassessment of a dissolved firm from the provisions of those Acts. The Devision Bench considered that as certain basic principles of construction of taxing statutes are involved in the consideration of the case so it referred the case to the Chief Justice for constittution of a Full Bench for its decision. That is how the matter is before us.

(5) The Bengal Finance (Sales Tax) Act, 1941 was extended to the Union Territory of Delhi by notification dated September 13, 1951, published in the Gazette of India dated September 22, 1951 and came into force on November 1, 1951, the date appointed by the Chief Commissioner, Delhi by notification in the Official Gazette. In exercise of the powers conferred by Section 26 of the Local Act, the Chief Commissioner, Delhi framed the Rules called the Delhi Sales Tax Rules, 195t. Rote 39(IA) was inserted by notification dated March, 10, 1959 published in Delhi Gazette dated April 2, 1959, Amendments were made on May 28, 1972 in the Local Act by Finance Act' 1972 Section 69. Section 12-F was 'inserted' empowering the statutory authorities expressly to assess a dissolved firm.

(6) The definition of dealer in Section 2(c) of the Local Act does not specifically include a firm. It only says it means any person who carries on business of selling goods in the. Union Territory of Delhi and includes the Government. Under the general law a firm is not a distinct legal entity but is only a compendious name for all its partners. A firm which carries on the business of selling goods would be a dealer within the meaning of the Local Act as the word ''person' would include a firm being a body of individuals by force of Section 3(42) of the General Clauses Act, 1897. There is nothing repugnant in the subject or context to exclude the application of this definition contained in the General Clauses Act, 1897. By the charging Section 4 every dealer whose turnover during the year immediately preceding the commencement of the Local Act exceeded the taxable quantum is liable to pay tax under the Local Act on all sales efiected after the date so notified. Because of Section 7, no dealer can, while being liable to pay tax under Section 4, carry on business as a dealer unless he has, been registered and possesses a registration certificate. The firm was treated by the authorities under the Local Act as included in the definition of adealer and was for this reason granted the registration certificate. That is the requirement of Section 7(3), which says that the authority is satisfied that an application for registration is it Older, he shall, in accordance with such rules as maybe prescribed, register the applicant and grant him a certificate of registration in the prescribed form which shall specify the class or classes of goods for the purposes of sub-clause (ii) of Clause (a) of sub-section 1 of Section 5. The firm was granted on application the Registration Certificate No. 27493 dated March 30, 1962. The assessment and reassessment of the tax payable by the dealer is in the manner prescribed in Section 11 and 11-A. Under Rule 39(1) adealer and his partner or partners are jointly and severally responsible for payment of tax, penalty or any amount due under the Local Act or the Rules. Rule 39(1A) inserted on May 10, 1959 says that in case of dissolution of a firm, every partner thereof shall be jointly and severally responsible for the payment of tax due under the Local Act, or the Rules in respect of the business of the firm conducted before its dissolution. The rule making authority clearly understood that a firm is: included in the definition of a dealer when speaking of the joint and several liability of the partners. The cancellation of the registration certificate is provided in Section 7(6). When any business in respect of which a certificate has been granted to a dealer on an application made has been discontinued or transferred, or a dealer has ceased to be liable to pay tax under Section 4 of the Local Act, the authority has to cancel the registration. None of these provisions are repugnant to the firm being included in the definition of a dealer as contained in Section 2(c) of the Local Act. A firm is, thereforee, a dealer under the Local Act.

(7) The question then is whether a firm as such continues to be liable to pay tax under the Local Act even after its dissoiution on its predissolution turnover and or whether there is any implicit statutory provision in the Local Act permitting the assessment or reassessment of a dissolved firm. We are deliberately using the words i.e. only the 'Local Act' and not the 'Local Act and the Rules', as the implicit power to make an assessment or reassessment of a dissolved firm has to be found in the Local Act itself. The power to frame the Rules contained in Section 26 of the Local Act is for carrying out the purposes of the Local Act. The Rule making authority in particular and without prejudice to the generality of the foregoing power could also prescribe the procedure to be followed for assessment under Section 11. The Rules are framed merely for the purpose of carrying out the essential policy which the Parliament has enacted. The Rules framed under the Local Act are ancillary and subserve the purpose of the enactment. The Rules cannot in any manner change the provisions of the enactment. Rules cannot go beyond the specific power conferred so as to confer power of assessment of a dissloved firm in respect of its predissolution turnover unles, the statute under which the assessment is made authorises the assessment either expressly or by implication. The Rules made in the exercise of delegated authority are valid and binding only if. made within the limits of the power conferred. The authority to assess a dissolved firm has, thereforee, to be found out in the enactment itself and not in the Rules. We are unable to agree with the submissions of the learned counsel for the Revenue that Rule 39(1) or Rule 39(1A) impliedly envisage the assessment of a dissolved firm. It does not constitute or set up any machinery or mechanics of framing an assessment against a dissolved firm. It does not enable the assessment of a dissolved firm. It only speaks of the liability of the partners of the firm to pay the tax so assessed on the firm before its dissolution and continues that liability even after dissolution. The question of statutory power of assessing a dissolved firm is to be contrasted and not mixed up with the liability of the partners. Rule 39(1) and (1A) only ensures the payment of the tax due in respect of the business of the firm conducted before its dissolution by making the partners jointly and severally liable.

(8) A firm under the Local Act is a dealer which becomes a rogistered dealer under Section 7 or Section 8 of the Local Act. The payment of tax and returns are by the registered dealer in the manner provided in Section 10. The registered dealer is required to furnish the returns and before that pay the full amount of tax due from him under the Local Act according to such returns. By force of Section 10-A no person who is not a registered dealer can collect in respect of any sale by him of goods in the Union Territory of Delhi any amount by way of tax under the Local Act. No registered dealer can make any such collection except in accordance with the Local Act and the Rules made there under. The assessment of tax is of a registered dealer. Such a dealer can also be a firm. The firm is a distinct assessable entity for the purposes of assessment under Section 11 or reassessment under Section 11-A. A partnership carrying on business goes on as a living concern and on dissolution it ceases to exist. On dissolution it is juristic death of the firm as natural death in case of a human being. The person who can be assessed has ordinarily to be a living person and cannot be a dead person-because Ms legal personality ceases on his death. The general rule that a dead parson cannot be assessed, would apply in the case of assessment of a dissolved firm unless the statute contemplates the assessment of a firm after its dissolution. In other words, the distinct assessable entity ceases to exist for all purposes unless the statute by a fiction can keep it alive for the purpose of assessment or reassessment in respect of pre-death (predissolution) turnover. Unless there is a provision expressly empowering the assessing authority to assess a dissolved firm in respect of its predissolution turnaver or unless such a power could be gathered by necessary implication from the other provisions of the Local Act, the assessment proceeding against the dissolved firm is not permissible, irrespective of the fact whether the proceedings were initiated before the dissolution or after the dissolution of the firm. Under the partnership law a firm is not a legal entity but only consists of individual partriers for the time being. A firm as such has no existence. It is only a compendious name for the partners for the time being. Under the law the firm as such is not a juristic entity. For tax law, income-tax as well as sales-tax, however, it is a legal entity. On dissolution the firm ceases to be a legal entity, and unless there is a statutory provision permitting the assessment of a dissolved firm, assessment proceedings cannot be maintained against a firm, which ceases to have legal existence.

(9) A Hindu undivided family is neither a person nor an association of persons but it is' a separate entity by itself for the purposes assessment under the Income Tax Act, 1922 as is dear from Section 3 of that Act. The partition of the Hindu undivided family has' the effect of disruption of the status and discontinuance of the business. The liability in case of; discontinuance was continued by force of Section 44 of the Income Tax Act, 1922. However, the power of assessment after partition of Hindu undivided family was not there in the original Act but was inserted by section 4 of the Income Tax (Amendment) Act, 1928 as Section 25-A. Similarly, Section 24-B of the Income Tax Act, 1922 added by Income Tax (Amendment) Act, 1933 extended fictionally the legal personality of a deceased person only for the duration of the previous year in the course of which he died and, thereforee, the income received either by him before bids death or by his heirs' and his representatives after his death in that previous year alone becomes assessable to tax in the relevant assessment year, but not the income received in any subsequent to that previous accounting year. Section 24-B did not authorise the levy of tax on receipts by the legal representative of a deceased person in the year of assessment succeeding the year of account in which such person died. The Legislature not having made any provision generally for the assessment of income receivable on behalf of the estate of the deceased person the expression 'any tax which would have been payable by him under this Act if he had not died' in Section 24-B cannot have the effect of supplying the machinery for taxation of income received by a legal representative on behalf of the estate after the expiry of the year in the course of which such person died. The Legislature having failed to set up the procedure to assess the income received by a legal representative of the estate of a deceased person as his personal income, the courts cannot supply it. (See 'Commissioner of Income-tax, Bombay V. James Anderson', : [1964]51ITR345(SC) . The Excess Profits Tax Act, 1940, contemplates assessment of the tax on a person though on the basis of the profits from business. A Hindu undivided family is neither a firm nor an association of persons, but it is a separate legal entity by itself and Section 44 of the Income Tax Act, 1922 continues the liability. But there is no provision in the Excess Profits Tax Act, 1940 similar to Section 25-A of the Income Tax Act, 1922. For this reason, no assessment could be made after partition (See 'Income-tax Officer, Gorakhpur V. Rant Prasad & Others', : [1972]86ITR145(SC) . Under Section 189(1) of the Income Tax Act, 1961, there is a specific provision for assessment where any business or profession carried on by a firm has been discontinued or where the firm is dissolved. The Income Tax Officer is empowered to make an assessment of the total income of the firm as if no such discontinuance or dissolution had taken place. We are unable to find any similar provision in the Local Act either expressly or by necessary implication permitting the assessment of a dissolved firm.

(10) These are the principles enunciated by the Supreme Court in Jillundur's case (supra), followed by the Supreme Court in 'Khushi Ram Behari Lal & Co. V. Assessing Authority, Songrur', 19 S.T.C. 381 and 'Additional Tehsildar, Raipur V. Gendalal', 21 S.T.C. 263 and extracted by Chandrachud, J. (as he then was and who spoke for the majority) in Murarilal's case (supra) :

'THEJullundur Vegetables Syndicate case is a clear and direct authority for the following propositions: (1) A dissolved firm cannot be assessed to sales' tax unless the statute under which the assessment is made authorises the assessment either expressly or by necessary implication; (2) If, by definition, a firm is a dealer under an Act, it becomes alegal entity or an independent assessable unit for the purposes of that Act. If that be so, the firm ceases to be a legal entity on dissolution and, thereafter, on principle it cannot be assessed to sales tax unless the statute so authorises expressly or by necessary implication; (3) Neither a provision requiring a dealer to inform the authorities if it discontinues its' business, nor a provision imposing a joint and several liability on the dealer and its partners for the payment of tax, penally or any other amount due under the Act or Rules can be interpreted as conferring jurisdiction to assess a dissolved firm; (4) In interpreting a fiscal statute the court cannot proceed to make good the deficiencies, if any, in the statute : it shall interpret the statute as; it stands, and, in case of doubt, it shall interpret it in a manner favorable to the taxpayer. The language of a taxing Act cannot be strained in order to hold a subject liable to tax.'

The Supreme Court in the last case did not strike any 'new path' though a process of fresh .took was attempted. To put it in the words of Subha Rao, J. the rethinking was 'overburdened with the consequiences of a contrary construction on the incidence of taxation' when His Lordship spoke of the decided High Court cases which were over-ruled in Jullundur's case (supra). The Supreme Court, however, put a seal and then applied the ratio in Jullundur's case as is clear from these words :

'IT is plausible that a distinction ought to be made between the death of an individual and the dissolution of a firm. Human beings', as assesseds, are not generally Known to court death to evade taxes. Death, normally, is not volitional and it is' understandable that on the death of an individual, his liability to be assessed to tax should come to an end unless the statute provides to the contrary. With firms it is different, because a firm which incurs during its existence a liability to pay sales tax may, with a little ingenuity, evade its liability by the voluntary act of dissolution. The dissolution of a firm could thereforee be viewed differently from the death of an individual and the partners could be denied the advantage of their own wrong. But we do not want to strike this new path because the Jullundur case and the two cases which follow it have linked the dissolution of a firm to the death of an individual.'

After inviting our attention to the provisions contained in Section 2(c), 4,7, 11 and 11-A of the Local Act and Rules 10, 12(d), 39(1) and 39(1A), Mr. R. C.Chawla, the learned counsel for the Revenue submitted that the liability in the scheme of the Local Act and the Rules is one which is created by the charging Section, 4.(1) and since; the prescribed taxable quantum existed, the liability under Section 4(2) was attracted. Such liability, acoording to the counsel, is ipso juro ex-hypothesi fixed or determined and, thereforee, independent of any order of assessment. Section 4(1) is the charging section and extends the liability to pay tax on all sales effected after the notified date. Section 4(3) says' that every dealer who has become liable to pay tax under the Local Act shall continue to be so liable until the expiry of three consecutive years, during each of which his gross turnover has failed to exceed the taxable quantum and such further period after the date of such expiry as may be prescribed, and on the expiry of this latter period his liability to pay tax shall cease. The argument is that the combined effect of the provisions of Sections 4(3) and 7(6), read with Rules 10 and 12(d) is that the registered dealer who becomes liable to pay tax continues to be so liable until cancellation of his registration and it is only on cancellation that the liability to pay the tax ceases. It is submitted that the dissolution of the firm by itself cannot affect the subsisting liability and it can come to an end only by an overt act of cancellation of the registration. The conclusion drawn by the counsel from it is that if the liability of the firm subsists, then it subsists after dissolution also and, thereforee, entitled to be taxed by an implicit power. In our opinion this- is not the true understanding of the stages of the imposition of the taxation. The first is the charge or the levy. Then there is the framing of an assessment or quantification of the liability. The liability is already fixed by the statute. It does not, however, depend on the assessment. On assessment it particularises the person by whom tax is payable and to what extent. If the person ceases to exist he cannot be. proceeded against for assessment through the liability subsists. If in law it is the death of the person or extinction of the legal entity, then the proceedings for assessment are not maintainable. If the intention of the legislature is to proceed to assess and to collect the tax due, then it has to be separately provided. As we have pointed out earlier, the mere continuance of the liability to pay the tax by a legal entity does not by itself spell out a power of assessment after it ceases to exist. The power of assessment after partition of Hindu undivided family though the liability continued under Section 44 was not there in the Income Tax Act, 1922 but was inserted by addition of Section 25-A by Section 4 of the Income Tax (Amendment) Act, 1928. Though under the Excess- Profits Tax Act, 1940 there is continuance of the liability of a Hindu undivided family, yet no assessment can be made after partition. The legislature having failed to set up a machine and the procedure to assess the income received by the legal representatives of the estate of a deceased person as his personal income, in the years succeeding the year of account in which such person died. The Courts cannot supply it, inspire of the fact that under-Section 24-B of the Income Tax Act, 1922 the income was as receivable on behalf of the estate of a deceased person and thus liable to tax. The continuance of the liability to pay the tax is distinct and is not to be mixed up with the implicit power to tax. Reference was then made to the provisions contained in Section 11 for assessment and Section 11-A for re-assessment for an implicit power of an assessment or re-assessment of a dissolved firm. We are unable to read in Sections 11 or 11-A that the legislature had addressed its mind to the assessment or re-assessment of a dissolved firm and collection of the tax from it when enacting those provisions. There is no implication in the provisions of Sections' 11 or 11-A that it provides for any power or procedure for assessing a dissolved firm for its predissolution turnover. There is no indication of the legislatures intendment that the dissolved firm by any deeming provision or statutory fiction was continued to exist for the purposes of assessment. To us it is clear that there was a lacuna in the Local Act and it was filled by the insertion of Section 12-F Similar is the view of Avadh Behari, J. in 'Janki Devi V. Sales Tax Officer', 39 S.T.C. 268 expressed in his own typical way We agree.

(11) The counsel for the Revenue then basing himself On the last decision of the Supreme Court attempted to compare the provisions of Section 5 read with Section 11(6) of the Bombay Sales Tax Act, 1953 with those contained in Section 4(3) read with Section 7 (6) of the Local Act as also the provisions of Section 15(1) and 15-A read with Section 14(3) of the Bombay Sales Tax Act, 1953 with those contained in Sections 11 and 11-A of the Local Act. The argument is that the Supreme Court in Murarilal's case (supra) came to the conclusion on the consideration of those provision that the assessment of a dissolved firm for its predissolution turnover is within the clear intendment of the statute and the same conclusion should be drawn under the Local Act as the corresponding provisions are in pari materia. We have considered the provisions of the Local Act for its true construction. In construing fiscal statutes', one must have regard to the strict letter of the law. There is no warrant to read any implicit power when the legislature which has to make the charge levied effective has not given out its clear intention. We cannot make good the deficiency, as the implicit power to assess the dissloved firm is not there. The differen provision of a different statute is not a precedent for this case. The decision of the Supreme Court in Murarilal's case is rendered on the peculiar provisions of the Bombay Sales Tax Act, 1953 and 1959. There the Supreme Court had examined the general scheme and the various provisions of those Acts to come to a conclusion that 'the imposition of such a liability is in keeping with the general scheme of the Act, the various provisions of which show that the assessment of a dissoived firm is within the clear intendment of the statute'. Besides Section 5(3) and 15(1), the Supreme Court considered section 26(3) (i) and (ii). Those provisions' enacted that a firm liable to pay tax if dissolved shall be liable to pay tax by the goods allotted to any partner as if the goods had been sold to such partner. It was on the analysis of those statutory provisions that the Supreme Court rested its decision.

(12) JULLUNDUR'S case (supra) is the nearest. In that case the Supreme Court on consideration of the relevant provisions extracted below did not find any implicit power empowering the assessing authority to assess a dissolved firm in respect of its predissolution turnover. We may read the relevant provisions of the East Punjab General Sales Tax Act, 1948 and Punjab General Sales Tax Rules, 1949 which came up for consideration in Jullndur's case (supra) as well as of the Local Act and the Rules for comparison : 'East Punjab Act Locul Act S.2(d) 'Dealer' means any person, S.2(c). 'Dealer' means any person who firm or Hindu joint family, engaged carries on the business of selling in the business of selling or goods in the Union Territory of supplying goods in East Punjab...' Delhi and includes the Government (It should be read with Section 3(42) of the General Clauses Act, 1897 and thus would include a firm which is a body of individuals. S. 4(1) Subject to the provisions of 4. With effect from such date as the sections 5 and 6, every dealer whose Chief Commissioner may, by notification gross turnover during the year in the Official Gazette, immediately preceding the commencement appoint, being not earlier than of this Act exceeded thirty days after the date of the the taxable quantum shall be liable said notification, every dealer whose to pay tax under this Act on all gross turnover during the year sales effected after the coming into immediately preceding the commencement force of this Act.' of this Act exceeded the taxable quantum shall be liable to pay tax under this Act on all sales effected after the date so notified.' S. 7(1) No. dealer shall, while being S. 7(i) No dealer shall, while being liable to pay tax under this Act, liable to pay tax under Section 4 of carry on business as a dealer unless this Act, carry on business as a he has been registered and possesses dealer unless he has been registered a registration certificate, and possesses a registration certificate.' S. 16. If any dealer to whom the provisions S. 16. If any dealer to whom the provisions of sub-section (2) of section of sub-section (2) of Section 10 apply 10 apply (b) discontinues his business or changes (b) discontinues his business or changes his place of business or opens his place of business or opens a new place of business, he shall a new place of business, he shall within the prescribed time inform within the prescribed time inform the prescribed authority accordingly; the prescribed authority accordingly and if any such dealer dies, and if any such dealer dies, his his legal representative shall in legal representiative, shall in like like manner inform the said authority'. manner, inform the said authority.' S 17. When the ownership of the S. 17. Where the ownership of the business of a registered dealer is business of a registered dealer is transferred, any tax payable in entirely transferred and the trans- 893 respect of such business remaining feree carries on such business eitller unpaid at the time of the transfer in its old name, or in some other shall be payable by the transferee name, the transferee shall for all the as If he was the registered dealers; purposes of this Act (except for and the transferee shall within 30 liabilities under this Act already days of the transfer apply turn discharged by such dealer) be registration under Section 7.' deemed to be and have always been registered as if the certificate of registration of such dealer ana initially been granted to the transferee: and the transferee shall on application to the Commissioner be entitled to have the registration certificate amended accordingly.' 'Rule 40 of the East Punjab General Rule 39(1). A dealer and his partner Sales Tax Rules, 1949 reads : or partners shall be jointly and '(1) A dealer and his partners shall severally responsible for payment of be jointly and serverally responsible the tax, penalty or any amount due for payment of the tax, penalty, under the Act or these Rules. or any amount due under the Act '39(1 A) In case of dissolution of a or these Rules.' firm. every partner thereof and in case of discontinuance of an association, every member thereof, shall be jointly and severally responsible for payment of tax due under the Act or these Rules in respect of the business of the firm or the association as the case may be, conducted before its dissolution or discontinuance.'

(13) Our own conclusion by reading the provisions of Sections 2.(c), 4, 7, 11, 11-A, 16 and 17 of the Local Act and Rules 10, 12(b), 39(1) and 39(1A), for the reasons recorded above, is that these provisions do not constitute a clear, express or any implied provisions containing a power to assess a dissolved firm for its predissolution turnover. The result is that there was no provision to assess or reassess a dissolved firm until the lacuna was filled up by inserting Section 12-F prospectively. The appeal fail and are hereby dismissed with no order as to costs.


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