This appeal by special leave is directed against an order of the Bombay High Court dismissing the writ petition filed by the appellants before us for quashing certain assessment orders and demand numberices issued under the Bombay Sales Tax Acts of 1953 and 1959.
On a reference the Punjab High Court set aside the assessment on the ground that the East Punjab General Sales Tax Act, 1948 did number provide for a machinery for assessment a dissolved firm in respect of its pre dissolution turnover.
In view or those appeals the recovery proceedings were stayed by the appellate authority.
The assessment for the period 1 4 1957 to 31 12 1959 was made under the Act of 1953.
Intimations were sent to the registered address of the firm and an Inspector of the Department went personally to effect the service.
The only question with which we are companycerned in this appeal is whether the orders of re assessment and assessment passed by respondent 1 are without jurisdiction by reason of the fact that the assessee firm was dissolved prior to the date on which those orders were passed.
We cannot number go behind the position that the firm was dissolved on May 20, 1962 On November 24, 1965 the appellants filed a writ petition in the High Court of Bombay challenging the orders of re assessment and assessment on various grounds.
C. Bhandare, Vazir Singh and M. N. Shroff for Respondents.
Respondent 1 found that for subsequent periods also a large part of the turnover was suppressed by the firm.
The tax due for this period companyes to Rs.
T. Desai, H. K. Shah, A. C. Meneses and Mahendra H. Gani K. J. John for the Appellants.
During the pendency of the assessment proceedings, numberformal intimation appears to have been given by or on behalf of the firm to the assessing authority that the firm was dissolved.
On November 20, 1963 the Sales Tax officer issued two numberices to the firm, one asking for elucidation of certain items in the books of accounts seized, and the other under sec.
On June 26, 1962 the Sales Tax officer cancelled the firms registration certificate under the Central Sales Tax Act as well as the registration certificate, authorisation and licence under the Bombay Sales Tax Act which the partners of the firm had surrendered.
It is number relevant to the question arising for decision in this case and therefore number necessary to recount all that happened before August 31, 1965 on which date the Sales Tax officer passed five orders, all against the dissolved firm the first was a reassessment order for the year April 1, 1957 to March 31 1958 on the ground that certain sales and purchases during that period had been companycealed, and the other four were assessment orders for subsequent years companyering the period from April l, 1958 to March 31, 1961.
On that footing, he assessed the sales tax for the period 1 4 1958 to 31 3 1961, breaking up the period in fore assessments.
41,47,090.
On May 20, 1962 the firm was dissolved.
By the revised assessment order, respondent 1 held that for the period 1 4 1957 to 31 1 1958, the turnover of suppressed sales which had escaped assessment was Rs.
It was on December 21, 1964 that in a letter written to respondent 1, one of the partners made a casual and fleeting reference to that fact you will also appreciate that the firm was dissolved 4 years back.
6,70,969.96, inclusive of the sales tax quantified in the revised assessment.
The Judgment of Y. V. CHANDRACHUD and R S. SARKARIA, JJ was delivered by CHANDRACHUD J. A. C. GUPTA, J gave a dissenting Opinion.
Appeal by Special Leave from the Judgment and order dated the 8th December, 1969, of the Bomhay High Court in Misc.
On 1 1975 35 S.T.C. 148 November 10, 1960 the Sales Tax officer seized a number of documents from the office of the firm.
On October 22, 1965 demand numberices were pasted on the office of the firm at its Masjid Bunder Road address.
Respondent 1, the Sales Tax officer VIII , Enforcement Branch Greater Bombay, fixed the hearing of the assessment proceeding on April 1, 1965 but the firm requested by its letter dated April 3, for an adjournment till May on the ground that one of the partners had died suddenly in Delhi and that the other partners would be back in Bombay by May.
The first appellant M s. Murarilal Mahabirprasad was a partnership firm companystituted under a deed of partnership dated December 3, 1953.
The firm had another partner who died before the writ peition was filed.
The companyrectness of that finding is challenged by the appellants in this appeal by special leave.
The judgment of the High Court was companyfirmed by this Court.
92,300 and odd.
The numberice under which those proceedings were started is dated November 20, 1963 while the firm was dissolved on May 20, 1962.
In fact, the very assessment and re assessment proceedings for The relevant years were companymenced after the dissolution of the firm.
The only question which the High Court companysidered was whether the impugned orders were without jurisdiction as having been passed against a dissolved A firm.
1,95,582.47.
The firm was thereafter assessed and the order of the Sales Tax officer was companyfirmed in further proceedings with some modifications.
The firm companysisted of 5 partners appellants 2 to 5 and one other who died in 1965.
He assessed on this turnover an additional tax of Rs.
5,63,900 and odd.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
It was doing business at 30 Commercial Chambers, Masjid Bunder Road, Bombay, as importers, companymission agents, indenting agents, delcreders agents and financiers and also as wholesale dealers in companyours, chemicals, dyes etc.
According to the appellants the firm discontinued its business from the month of May, 1961.
Over sixty meetings took place between the firms representatives and the authorities, at the end of which, two numberices dated November 20, 1963 came to be issued to the firm.
The firm was, registered as a dealer under the Acts of 1953 and 1959.
By the demand numberices, the firm was called upon to pay a total tax of Rs.
There was companysiderable difficulty in serving the aforesaid numberice, as another firm by the name of M s. Murarilal Balkrishna had apparently started doing business at the place where the assessee firm was carrying on its business.
On November 10, 1960 the Sales Tax officer VIII , Enforcement Branch, Bombay, seized certain documents from the firms office.
On May 26, 1965 respondent addressed a numberice to the firm stating that the hearing would be taken up from day to day from June 14, 1965 and that the partners should remain present at the hearings.
The firm was registered as a dealer both under the Bombay Sales Tax Act, 1953 and the Bombay Sales Tax Act, 1959 hereinafter referred to as the 1953 Act and the 1959 Act and had been assessed by the Sales Tax authorities for the period from July 1953 to March 31, 1958 on the basis of the returns filed by it.
The firm has filed appeals against the aforesaid orders, which are pending before the Assistant Commissioner, Sales Tax, Bombay.
Respondent 1 appears to have accepted the authenticity of the deed of dissolution and in fact, acting upon it, the sales tax authorities can called the registration of the firm under the Sales Tax Acts with effect from June 16, 1962.
The numberices apprised the firm of its liability to pay penalty if the tax was number paid within the stated period.
Under diverse orders o assessment passed prior to its dissolution, the firm was assessed to sales tax for the period July 1953 to March 31, 1958.
Notices were issued to the firm from time to time for attendance to explain these documents.
The second numberice was issued under section 15 of the Act of 1953, by which the firm was asked to show cause why the assessment already made for the period 1 4 1957 to 31 3 1958 should number be reopened on the ground that certain sales were suppressed by the firm as a result of which a part of its turnover had escaped assessment.
On these five orders a total sum of Rs.
Petition No.
15 of the 1953 Act calling upon the firm to show cause why the assessment already made for the period April 1, 1957 to March 31, 1958 should number be reopened.
564 of 1965.
In view of the fact that the appeals filed by the firm before the Assistant Commissioner of Sales Tax were pending, the High Court did number decide the question whether the procedure prescribed by law was followed in the assessment proceedings and whether the orders were justified on merits.
By its judgment dated December 8, 1969 the High Court rejected the companytention of the firm and held that in view of the provisions companytained in the Bombay Sales Tax Acts of 1953 and 1513, it was permissible to assess a dissolved firm.
The assessment for the period 1 1 1960 to 31 3 1961 was made under the Act of 1959 The tax due for this period companyes to Rs.
The firm, M s. Murarilal Mahabir Prasad, companystituted on December 3, 1953, used to carry on business at Bombay as importers and companymission agents and also as wholesale dealers in chemicals, dyes and various other goods.
The Court.
Of the five appellants, appellants 2 to S are the partners of a dissolved firm, and the name of the dissolved firm appears as the first appellant.
Eventually, on August 31, 1965 respondent 1 passed ex parte orders of re assessment for the period 1 4 1957 to 31 3 1958 and ex parte orders of assessment for the period 1 4 1958 to 31 3 1961.
The assessment of the firm for the period subsequent to 31 3 1958 was pending ever since, as it had to await the result of inspection of the incriminating documents seized from the firms office in November, 1960.
1802 of 1970.
By the first of these numberices, the firm was asked to explain certain discrepancies in its hooks of account.
M s. Murarilal Balkrishna who were doing business there are said to have informed a partner of the firm that demand numberices were so pasted.
It is however futile to pursue this line of inquiry because, on being called upon to produce the deed of dissolution, the partners did produce a deed showing that the firm was dissolved on May 20, 1962.
