R C HIREMATH Vs. JMFC II COURT HUBLI

JUDGEMENT

(1.) In this revision petition presented under S. 13(4) of the Karnataka Sales Tax Act. 1957 (hereinafter referred to as the State Act) by a partner of a dissolved firm against the order of the Magistrate rejecting his objection for the recovery of tax made on an application under S. 13 (3) of the State Act, the following two questions of law arise for consideration: (1) Whether the proceedings for assessment taken under S. 15 (2) of the State Act for assessing the sales tax payable by the dissolved firm under the provisions of the Central Sales Tax Act (hereinafter referred to as the Central Act) is valid? (2) Whether the limitation for the recovery of fine fixed under S. 70 I.P.C. is applicable for the recovery of tax due under the Central Act, because the same is required to be recovered as fine by virtue of S. 13(3) (b) of the State Act?

(2.) The brief facts which have given rise toi the above question are as follows: The petitioner was a partner of a firm under the name and style R.C. Hiremath (Patil) . The firm was dealing in timber. It stood dissolved on 1-7-1963. The assessing authority made an assessment order on 19-3-1967 (Ext-'A'). The assessment order was taken in appeal before the appellate authority. The appellate authority made an order on 13-1-1970 setting aside the assessment order on the ground that before the dissolution of the firm on 1-7-1.963 there was no provision which empowered the authorities to make an assessment against the dissolved firm. Thereafter ,the legislature amended the provisions of the State Act, by Act No. 9 of 1964. Sub-sec. (2) was introduced to S. 15 specifically providing for making an assessment against a dissolved firm. S. 34 of the said Act validated all the proceedings including assessments made against the dissolved firms. In the case of S. S. Navalagi v. CTO, Jamkhondi 28 STC 580 = (1972) 1 Mys.L.J. 26 = 1972 KLJ 5. the question of validation of assessments made against the dissolved firms by S. 34 of Act, 9 of 1964 came up for consideration. This Court held that as S. 15(2) was not introduced with retrospective effect, the validation of assessments made against dissolved firms earlier to the introduction of S. 15(2), under S. 34 of Act 9 of 1964 was invalid. In order to get over the effect of the said judgment, the State Act was further amended by Act 9 of 1970. By the said amendment S. 15 (2) was given retrospective effect and further, Section 24 of the said amending Act provided that all the assessment orders made against dissolved firms earlier shall be valid as having been made under the Principal State Act as amended by Act 9 of 1970. In view of this amendment, the appellate authority made another order on 12-8-1970 setting aside its earlier order dated 13-1-1970. The result was the order of assessment made on 19-3-1967 stood restored. At this stage it is necessary to state that Central Act was also amended by Central Sales Tax (Amendment) Act No. 28 of 1969. S. 9(2) of the said Act was given retrospective effect and by the said provision all assessments made against the dissolved firms under the Central Act pursuant to the provisions under the Central Act were also validated.

(3.) Sri B. V. Katageri learned Counsel appearing for the petitioner contended that in the absence of a provision in the Central Act providir for making an assessment against a dissolved firm, the order of assessment made against the dissolved firm was without authority of law. In support of his submission he relied on the decision of the Supreme Court in State of Punjab v. Jullundur Vegetables Syndicate (2) . In the said case, the Supreme Court held that in the absence of a provision in the concerned Sales Tax Act no assessment could be made on a dissolved firm. Relying on the said judgment he argued that there was no provision in the Central Sales Tax Act providing for making an assessment against a dissolved firm and therefore, the assessment order made on 19-3-1967 was without authority of law. As already stated, though at the relevant point of time when the assessment was made there was no provision in the State Act for making an assessment against a dissolved firm, sub-sec. 17 STC 326, SC. of S. 15 was introduced into the State Act, specifically providing for making an assessment against a dissolved firm by Act 9 of 1964 and the said section was given retrospective effect, by virtue of S. 24 of Act No. 9 of 1970 and further, all the orders of assessment made earlier were validated. S. 9 of the Central Act which originally stood had adopted all the provisions of the State ]aw. The question whether subsequent amendments made to the State Act, were also applicable in respect of assessments to be made under the Central Act, specifical]y came up for consideration before a division bench of this Court in Mysore Electrical Industries Ltd v. CTO V Circle, Bangalore 27 STC 559 - (1970) 2 Mys.L.J. 263 . This Court held that in view of the definition of the words 'sales Tax Law' and 'General Sales Tax Law' in the Central Act, read with S. 9 of the State Act, not only the State Act as it stood on the date when S. 9 was introduced, but future amendments made to the State Act, also stand automatically adopted with effect from the date when the amendments are enacted. The same view was followed in A. V. Rajshekharappa v. CTO, II Circle, Hubli 35 STC 379 = (1974) 2 Kar.L. J. 119.. In view of this decision it is clear that provisions of S. 15(2) introduced to the State Act by Act 9 of 1964 as also the subsequent amendment made to the State Act by Act 9 of 1970 were clearly applicable to assessments made under the Central Act. Further, the Central Act itself was also amended by the amending Act 28 of 1969 and sub-sec. (2) of S. 9 of the said amending Act validated all orders of assessments made against a dissolved firm. Therefore, the order of the assessing authority made on 19-3-1967 levying Central Sales Tax against the dissolved firm became valid by virtue of the subsequent amendments made to the State Act and the Central Act referred to above.