Gopalan Nambiyar, J. - The question raised in this tax-revision case is whether a dissolved firm can be subjected to assessment under the provisions of the General Sales-tax Act, 1125. The Tribunal held that it could not be so assessed; and against the order of the Tribunal, the State has preferred this revision.
2. The assessment year here with which we are concerned is 1962-63. The firm which was the Assessee, was dissolved on 1-4-1965 and the assessment was completed subsequent to the dissolution i.e. 1-4-1965 and the assessment was completed subsequent to the dissolution i.e., 17-10-1966. As the proceedings related to the assessment year 1962-63 and as the Kerala General Sales-tax Act 1963 came into force only on 1-4-1963 it is common ground that the question has to be decided with respect to the provisions of the General Sales-tax Act, 1125. We may even here observe that in the General Sales-tax Act, 1963, a provision was added in 1969 by the Amending Act 15 of 1969 with respective effect from 1-4-1963 to provide for the assessment of dissolved firm. That provision was S. 21-A of the Act.
3. With respect to the provisions of the General Sales-tax Act, 1125, there was a decision in The Sales-Tax Officer, Special Circle, Kozhikode vs. K. S. V. Gupta by a Division Bench of this Court which took the view that a dissolved firm cannot be assessed to sales-tax under the General Sales-tax Act 1125. The relevant observation in the said decision is to be found at page 727 :
'....... That being so, the proceedings for the levy of the tax for the year 1962-63 can only be regarded as maintainable under the provisions of the 1125 Act, and that Act not providing for a levy on a dissolved firm, the rule in State of Punjab vs. Jullundur Vegetables Syndicate (1966 (17) STC 326 S.C.) still applies to make the assessment invalid. The amendment of the 1963 Act by the introduction of the new S. 21A and the validation of assessments made under the 1963 Act by S. 7 of the Amendment Act, it is obvious, can be of no avail to validate an assessment made under the provisions of the Act of 1125.'
The position was no doubt succinctly stated, but the ruling is that of a Division Bench of this Court. The question came up again before a learned Judge of this Court in K. Aboo vs. The Sales-tax Officer. The learned Judge in that case examined the decision of the Supreme Court in the State of Punjab vs. Jullundur Vegetables Syndicate where Subba Rao J., speaking for the Court, observed that a dissolved firm cannot be subjected to assessment, and it makes no difference whether the assessment proceedings were started prior to the dissolution of the firm and closed after the dissolution or whether they commenced after the dissolution of the firm. The Supreme Court observed that unless there is a specific provision for making an assessment, a fixing statute cannot be interpreted to widen its scope against the assessee; but on the contrary has to be so interpreted to widen its scope against the assessee; but on the contrary has to be so interpreted as to benefit the tax payer. In a later decision of the Supreme Court in Khushi Ram Behari Lal and Co. vs. The Assessing Authority, Sungrur, that Court re-affirmed its earlier decision in 17 S.T.C. 326. Both these decisions were noticed by the learned Single Judge in Aboos Case. In that case, it was held overruling the contention of the Revenue, that the provisions of Rr. 35 to 37 of the Kerala General Sales-tax Rules providing for joint and several liability of partners, the report of dissolution and discontinuance of the business were inadequate to constitute sufficient specific provision within the meaning of the principle expounded by the Supreme Court in the Jullundur Vegetables Syndicates case. The decision in Aboos case was followed by a Division Bench of this Court in W.A. Nos. 148, 193, and 216 of 1971. That decision noticed many other decisions and affirmed the view taken in 1969 KLR 807. So that, as far as this Court is concerned there are at least three decisions one by a single Judge and two by Division Benches which have taken the view that an assessment of a dissolved firm is not permissible under the 1125 Act.
4. The principle of the above rulings supported by the decision on the Supreme Court in Jullundur Vegetables Syndicates case which was indeed, the foundation of the decision in the above three cases. But the learned Government Pleader submitted that the ratio of the Supreme Court decision in the Vegetables Syndicates case has been shaken by the Others vs. B. R. Vad & Others. The question there arose whether assessment or reassessment of dissolved firm could be taken under the provisions of the Bombay Acts, 1953 and 1959. The Supreme Court referred to the prior ruling of the Court in Jullundur Vegetables Syndicates case and pointed out that it was direct authority for four propositions viz. (1) a dissolved firm cannot be assessed to sales-tax unless the statute under which the assessment is made or impliedly; (2) if by definition a firm is a dealer under the Act, it becomes a legal entity or a independent assessable unit for the purpose of the Act. If that be so it ceased to be legal entity on dissolution and thereafter on principle it cannot be assessed to sales-tax unless the statute authorised it expressly or by necessary implication; (3) neither a provision requiring a dealer to inform the authorities of the discontinuance of business, not one imposing a joint and several liability on the dealer and its partners for payment of tax or penalty can be interpreted as conferring jurisdiction to assess a dissolved firm,. and (4) in interpreting a fiscal statute the court cannot proceed to make good the deficiencies if any in the statute. It is light of the ration of the Jullundur Vegetables Syndicates case the provisions of the Bombay Act were examined. It was noticed that the definition of dealer included a firm, either on the express provisions of the statute, as in the case of the 1953 Act S. 5(3) of the 1953 Act provided that every dealer who is liable until cancellation of his registration under sub-S. 6 of S. 11 and upon such cancellation his liability to pay the tax shall cease. The Supreme Court stressed the above provision as showing that if a firm had liability to pay sales-tax that liability continues until cancellation of the registration. There may be a hiatus between the dissolution of the firm and the cancellation of its registration. S. 15(1) of the 1953 Act provided for escaped turnover assessment. On an analysis of the Section it was stressed by the Supreme Court that the section contained a clear and necessary implication that even a dissolved firm can be assessed or re-assessed within the period provided by the Section and that the dissolution of the firm cannot operate to bar the exercise of the power to re-open an assessment. There was one more Section which was considered important by the Supreme Court and that was S. 26, sub-S. 3(i) and (3)(ii). These provisions enacted that a firm liable to pay tax shall be liable to pay tax on the goods allotted to any partner as if the goods had been sold to such partner. The Supreme Court pointed out that the provision in terms envisaged the assessment of a dissolved firm though only to a limited extent and for a limited purpose. The 1959 Bombay Act presented to difficulty as its provisions were clearer and stronger than the 1953 Act. It was on an analysis of the various statutory provisions that the Supreme Courts conclusion was rested.
5. Proceeding to compare the provisions of the statute considered by the Supreme Court with the provisions of the General Sales-tax Act, 1125, we are struck by the significant aspects of the two statutory provisions on which considerable stress was laid by the Supreme Court in Murarilal Mahabir Prasads case viz. S. 5(3) and 26 (3) (i) and (3) (ii). There is nothing corresponding to these provisions in the 1125 Act. The learned Government Pleader commended to us that the reamining provisions would be sufficient to sustain the conclusion reached by the Supreme Court in the later decision. In particular, he stressed the provisions of R. 33 of the General Sales-tax Act which provides for assessment of escaped turnover and the provisions of Rr. 34 to 37. Of these, Rr. in W.A. Nos. 148, 193 and 216 of 1971. We are in agreement with these decisions that these provisions are insufficient to sustain the conclusion that a dissolved firm can be subjected to assessment for re-assessment. They do not, in our view, constitute a sufficient, express or implied provision within the meaning of the rule laid down by the Supreme Court in Jullundur Vegetables Syndicates case. The principle as such was not departed from, but was only re-affirmed by the Supreme Court in its later decision in 37 S.T.C. 77.
6. Then the only question is whether Rr. 33 and 34, thrown in, can make any difference to the conclusion. We are of the opinion that they cannot turn the scale in favour of the Revenue. These, in our opinion, are sufficiently implied provisions to warrant the conclusion that a dissolved firm can be subjected to assessment.
7. In the result, we are of the view that the Tribunal was correct in its conclusion. We affirm the same and dismiss this tax-revision case, in the circumstances without costs.