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Puloke Chandra Paul Vs. Commercial Tax Officer and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKolkata High Court
Decided On
Case Number Civil Rule No. 4870(W) of 1974
Judge
Reported in[1975]36STC98(Cal)
AppellantPuloke Chandra Paul
RespondentCommercial Tax Officer and ors.
Appellant Advocate G.N. Chakraborty, Adv.
Respondent Advocate Samarendra Nath Dutta, Adv.
DispositionApplication dismissed
Cases ReferredRaipur v. Gendalal
Excerpt:
- .....are (a) whether a firm is included within the definition of 'dealer' under section 2(c) of the bengal finance (sales tax) act, 1941, and (b) whether a dissolved firm can be assessed to sales tax under the bengal finance (sales tax) act, 1941, in view of the decision of the supreme court in additional tahsildar v. gendalal [1968] 21 s.t.c. 263 (s.c.).2. the petitioner and his brother kanak paul had been carrying on business in partnership under the name and style of messrs. gopal chandra paul & sons having its place of business at 126b, chinabazar street, calcutta-1. the said partnership business was dissolved on 17th november, 1972, and the intimation of the said dissolution was duly given to the commercial tax officer, respondent no. 1, by two separate letters by 21st april, 1973......
Judgment:

Amiya Kumar Mookerji, J.

1. In this application the points required for consideration are (a) whether a firm is included within the definition of 'dealer' under Section 2(c) of the Bengal Finance (Sales Tax) Act, 1941, and (b) whether a dissolved firm can be assessed to sales tax under the Bengal Finance (Sales Tax) Act, 1941, in view of the decision of the Supreme Court in Additional Tahsildar v. Gendalal [1968] 21 S.T.C. 263 (S.C.).

2. The petitioner and his brother Kanak Paul had been carrying on business in partnership under the name and style of Messrs. Gopal Chandra Paul & Sons having its place of business at 126B, Chinabazar Street, Calcutta-1. The said partnership business was dissolved on 17th November, 1972, and the intimation of the said dissolution was duly given to the Commercial Tax Officer, respondent No. 1, by two separate letters by 21st April, 1973. The petitioner in the said letters also requested respondent No. 1 to cancel the registration certificate under the Bengal Finance (Sales Tax) Act as well as the Central Sales Tax Act. Thereafter, on 19th April, 1973, respondent No. 1 called for the production of certain books of account including bank accounts of the said partnership-firm and in reply thereto the petitioner by letter dated 12th May, 1973, informed respondent No. 1 that the firm to which the aforesaid notice was sent had already been dissolved and no action under the State Act can be taken on a dissolved firm. Thereafter, on 18th May, 1973, similar notice was issued by the Commercial Tax Officer for the production of necessary books of account. The petitioner being aggrieved moved this court in an application under Article 226 of the Constitution on 16th August, 1974.

3. It is contended on behalf of the petitioner that the State Act and the Central Act have made no provision permitting assessment of dissolved partnership-firm and respondent No. 1 without any authority of law issued impugned notices proposing to assess the dissolved partnership-firm ; such notices are illegal and without jurisdiction. Reliance was placed upon the above decision of the Supreme Court reported in Additional Tahsildar, Raipur v. Gendalav.

4. In that case, the Supreme Court observed 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. 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. 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 a proceeding started after the dissolution. In either case, unless there is an express provision, no assessment could be made on a firm which had lost its character as an assessable entity.

5. In this case, the Supreme Court reaffirmed its previous decision in State of Punjab v. Jullundur Vegetables Syndicate [1968] 21 S.T.C. 263 (S.C.).

6. Jullundur Vegetables Syndicate s case [1966] 17 S.T.C. 326 (S.C.) was under the East Punjab General Sales Tax Act. Dealer has been defined in Section 2(d) of the said Act. 'Dealer' means any person, firm or Hindu joint family, engaged in the business of selling or supplying goods in East Punjab. So, under the East Punjab Act a firm is a dealer within the meaning of Section 2(d) of that Act.

7. 'Dealer' has been defined in the Bengal Finance (Sales Tax) Act in Section 2(c). It means any person who carries on the business of selling goods in West Bengal and includes the Government. Neither in any of the two explanations the firm has been included. The present definition Clause (c) was substituted for the former by Section 2(b) of the Bengal Finance (Sales Tax) (West Bengal Amendment) Act, 1950, with effect from 6th November, 1950. Before the amendment the definition was: 'Dealer' means any person, firm or Hindu joint family engaged in the business of selling or supplying goods in West Bengal and includes--(i) the Government and (ii) where the place of business, or residence of any such person, firm, Hindu joint family or Government is situated outside West Bengal, the manager or the agent in West Bengal of such person, firm, Hindu joint family or Government.

8. In affidavit-in-opposition filed on behalf of respondents Nos. 1 and 2 and affirmed by Rishikesh Banerjee, respondent No. 1, it is stated that Sarbashree Puloke Chandra Paul and Kanak Chandra Paul carrying on business under the trade name of Gopal Chandra Paul & Sons were dealers under the Bengal Finance (Sales Tax) Act, 1941, and under the Central Sales Tax Act, 1956. It is denied that the partnership-firm was a dealer as alleged.

9. It is also not disputed that the registration certificate was issued in the names of the aforesaid two brothers and not in the name of the partnership-firm although the letters were issued in the name of Gopal Chandra Paul & Sons.

10. Before the Supreme Court Gendalal's case [1968] 21 S.T.C. 263 (S.C.) was under the Madhya Pradesh Sales Tax Act. Section 2(d) of the said Act defines 'dealer' and a firm has been included in Sub-clause (i) of Section 2(d).

11. Therefore it appears that both under the East Punjab General Sales Tax Act and the Madhya Pradesh Sales Tax Act, a firm is a dealer. But under the Bengal Finance (Sales Tax) Act, by West Bengal Act (48 of 1950) 'firm' has been deleted by the legislature from the definition of 'dealer'. Therefore, it follows that a firm as such is not a dealer under the Bengal Finance (Sales Tax) Act, 1941.

12. Accordingly, the dissolution of partnership has got nothing to do with regard to assessment of the two brothers as dealers even though their partnership had been dissolved. In my view, the principle as laid down by the Supreme Court in Additional Tahsildar, Raipur v. Gendalal [1968] 21 S.T.C. 263 (S.C.) has got no application with regard to assessment of a firm under the Bengal Finance (Sales Tax) Act, 1941, because apart from persons constituting the firm, the partnership-firm has got no legal entity under the Bengal Finance (Sales Tax) Act, 1941.

13. It is true that a firm is a 'person' within the meaning of Section 3(42) of the General Clauses Act. But 'firm' has been specifically omitted within the definition of dealer in Section 2(c) of the Act.

14. Section 3 of the General Clauses Act begins by saying that the definition shall apply unless there is anything repugnant in the subject or context of the Act. In view of the amendment of the definition of 'dealer', referred to here in above, in my opinion, such extended definition, would be repugnant to the subject and context of the Act.

15. Therefore, in my view, the Commercial Tax Officer was within his jurisdiction in issuing the impugned notices for production of the books of account of the business of the petitioner.

16. In the result, this application is dismissed.

17. There will be no order for costs.

18. Let the operation of the order be stayed for six weeks, as prayed for.


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