GOVINDJI PUNSHI Vs. TAHSILDAR SAVANUR SAVANUR DISTRICT DHARWAR

JUDGEMENT

(1.) On a reference made by one of us (Puttaswamy, J.), being of the opinion that the ruling of this Court in Ganesha Narayana Hegde Doddamane v. Commercial Tax Officer [1977] 40 STC 407; (1977) 2 Kar LJ 508 needs reconsideration these cases were posted before us for disposal.

(2.) The petitioners were partners of a firm called "Kantilal Padamshi & Co." of Hubli. This firm was carrying on business in cotton, cotton seeds, etc., and was also a commission agent. The firm was a registered "dealer" both under the Karnataka Sales Tax Act, 1957 (hereinafter referred to as the KST Act), and the Central Sales Tax Act, 1956 (hereinafter referred to as the CST Act). The firm was assessed to taxes for different periods both under the KST and CST Acts. But before the taxes due and payable by the firm could be recovered, the firm came to be dissolved. Thereafter, the Commercial Tax Officer, II Circle, Hubli, Dharwar District (hereinafter referred to as the C.T.O.) served demand notices on the firm demanding payment of a sum of Rs. 1,22,529.56 which included taxes due and payable and the penalty levied under section 13(2) of the KST Act. Payments not having been made by the firm, he issued recovery certificate to the Tahsildar, Savanur, who attached the properties of the petitioners by his order, exhibit A, made on 22nd February, 1973, and notified the sale of the attached properties (exhibits B and C). The petitioners have challenged in these writ petitions exhibits A, B and C.

(3.) Sri W. K. Joshi, learned Advocate, appearing for the petitioners, submitted that a partner is not liable to pay pre-dissolution liability of the firm relying on Ganesha Narayana Hegde's case (1978 )7 CTR(Kar )79 , 1976 (1 )KarLJ233 , [1977 ]40 STC400 (Kar ); . In any event, he argued the payment demanded includes penalty levied and the petitioners cannot be made liable to pay penalty.