K.K. Narendran, J.
1. A penniless partner of a firm whose business collapsed somewhere in 1965 figures as the petitioner in this original petition. The petitioner Ali Koya Haji, who once did flourishing business in hill produce, is now working as a copra purchase clerk in the firm M/s. Kanji Morarji, Produce Dealers, Copra Bazar, Calicut, on a salary of Rs. 150 per month. After deducting Rs. 12 towards provident fund the petitioner gets Rs. 138 per month and with that amount he is trying to keep his body and soul together in the evenings of his life. From the firm M/s. V.V. Alikoya Haji a sum of Rs. 2,34,448.77 is due to the sales tax department for the years 1963-64, 1964-65 and 1965-66 by way of sales tax and surcharge. The firm, which was the dealer under the Kerala General Sales Tax Act, 1963, for short the Act, it seems, has no assets. The 1st respondent-Assistant Commissioner of Sales Tax (Assessment), Sales Tax Office, Special Circle II, Kozhikode, issued Notice No. A. 15/65-66 in form No. 16 dated 15th May, 1974, under Section 25 of the Act to the firm M/s. Kanji Morarji directing them to pay to him the salary due to the petitioner as the petitioner was in arrears of sales tax. On receipt of the said notice the firm sent a reply, exhibit P-2 dated 10th June, 1974, requesting the 1st respondent to withdraw the notice and allow them to pay to the petitioner his salary for the month of May, 1974. On coming to know of the above notice, the petitioner also made exhibit P-1 representation dated 2nd July, 1974, to the 1st respondent. As the above representation was not acted upon, the petitioner has approached this court with this original petition challenging the above notice issued by the 1st respondent under Section 25 of the Act. The question that arises for consideration in the original petition is whether for the realisation of the arrears of tax due from a firm, which is the dealer, any steps can be taken under Section 25 of the Act against monies due from a partner of the firm.
2. Shri T.L. Viswanatha Tyer, the learned counsel for the petitioner, refers to Section 25 of the Act and contends that recovery under Section 25 of the Act can be had only against the dealer and not against a partner of a firm, which is the dealer. Section 25 of the Act reads :
25. Further mode of recovery.--(1) The assessing authority may, at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the dealer at his last address known to the assessing authortity) require any officer of the Government or any local authority, company, firm, society or association of persons from whom money is due or may become due to the dealer, or any officer of the Government or any local authority, company, firm, society or association of persons who holds or may subsequently hold money for or on account of the dealer, to pay to the assessing authority, either forthwith if the money has become due or is so held, or within the time specified in the notice (not being before the money becomes due or is held), so much of the money as is sufficient to pay the amount due by the dealer in respect of arrears of tax, fee or penalty or the whole of the money when it is equal to or less than the arrears of tax, fee or penalty.
Learned counsel for the petitioner then refers to Sections 2(iii) and 2(viii) of the Act and contends that when a firm is the dealer, a partner of the firm by no stretch of imagination can become the dealer under the Act even though a partner of a firm which is the assessee can be proceeded against for the realisation of tax due from the firm under certain circumstances. Section 2(iii) of the Act, which defines 'assessee' reads :
'assessee' means a person by whom tax or any other sum of money is payable under this Act, and includes every person in respect of whom any proceedings under this Act have been taken for the assessment of tax payable by him.
Section 2(viii) of the Act, which defines 'dealer' reads :
'dealer' means any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration and includes,--
(a) a local authority, a company, a Hindu undivided family, a marumakkathayam tarwad, a family governed by the Kerala Nambudiri Act, 1958, an aliyasanthana family, a firm, a society, a club or an association which carries on such business ;
(b) a casual trader ;
(c) a commission agent, a broker or a del credere agent, or an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal;
(d) a non-resident dealer or an agent of a non-resident dealer, or a local branch of a firm or company or association situated outside the State ;
(e) a person who sells goods produced by him by manufacture, agriculture, horticulture or otherwise.
Explanation (1).--A society (including a co-operative society), club or firm or an association which, whether or not in the course of business, buys, sells, supplies, or distributes goods from or to its members for cash, or for deferred payment, or for commission, remuneration or other valuable consideration, shall be deemed to be a dealer for the purposes of this Act;
Explanation (2).--The Central Government or a State Government, which, whether or not in the course of business, buy, sell, supply or distribute goods, directly or otherwise, for cash or for deferred payment, or for commission, remuneration or other valuable consideration, shall be deemed to be a dealer for the purposes of this Act.
Learned counsel points out that it is clear from Section 25 of the Act itself that no action under the section can be taken against a partner of a firm which is the dealer registered under the Act. Learned counsel also has a contention that the notice in question issued by the 1st respondent is also invalid for the reason that no copy of the same has been sent to the petitioner.
3. Learned Government Pleader appearing in the case contends that the original petition is, as a matter of fact, premature as no steps are actually taken and only a notice under Section 25 of the Act was issued to the firm in which the petitioner is now working. Learned Government Pleader refers to Section 21A of the Act and contends that a partner of a firm which is dissolved or which discontinued its business can also be made liable for the tax due from the firm. Section 21A of the Act reads :
21A. Firm dissolved or business discontinued.--(1) Where any business carried on by a firm is discontinued or where a firm is dissolved, the assessing authority shall make an assessment of the taxable turnover of, and determine the tax payable by, the firm as if no such discontinuance or dissolution had taken place, and all the provisions of this Act, including the provisions relating to levy of penalty or any other amount payable under any provision of this Act, shall apply, so far as may be, to such assessment and determination.
(2) Without prejudice to the generality of Sub-section (1), if the assessing authority in the course of any proceedings under Section 19 in respect of any such firm as is referred to in that Sub-section is satisfied that the firm was guilty of wilful non-disclosure of assessable turnover, it may direct payment of a penalty in accordance with the provisions of Sub-section (2) of that section.
(3) Every person who was, at the time of such discontinuance or dissolution, a partner of the firm, and the legal representative of any such person who is deceased, shall be jointly and severally liable for the amount of tax, penalty or other amount payable, and all the provisions of this Act shall apply, so far as may be, to any such assessment or direction for payment of penalty or other amount.
(4) Where such discontinuance or dissolution takes place after any proceedings in respect of any year have commenced, the proceedings may be continued against the persons referred to in Sub-section (3) from the stage at which the proceedings stood at the time of such discontinuance or dissolution, and all the provisions of this Act shall, so far as may be, apply accordingly.
(5) Nothing in this section shall affect the provisions of Section 20.
Learned Government Pleader then contends that the definition of 'dealer' should not be construed in a narrow sense since under the Act the assessee is none other than the dealer. Learned Government Pleader concludes by saying that the provisions of Section 25 of the Act are applicable to the instant case and there is no reason why this court should interfere with the matter.
4. There is considerable force in the contentions of the learned counsel for the petitioner. Of course, it may be possible for the department to proceed against the assets of a partner of a firm which discontinued its business or which is dissolved for the realisation of the tax due from the firm. But under Section 25, notice can be issued only if the money is due to the dealer and to nobody else. A partner of a firm no doubt will not be the dealer. The dealer is the firm and the firm itself. Hence no assets of the partner of a firm can be proceeded against under the further mode of recovery provided for by Section 25 of the Act. Admittedly, the notice in question is issued to proceed against monies due to the petitioner, who is only a partner of the firm. As a partner is not the dealer under the Act, no such notice under Section 25 of the Act can be issued. Hence, I hold that the steps taken by the 1st respondent under Section 25 of the Act to proceed against the salary due to the petitioner from the firm M/s. Kanji Morarji cannot be sustained. In view of the above conclusions, I am not considering the other contentions of the learned counsel for the petitioner.
5. The original petition is allowed. There will be no order as to costs.