HARBANS LAL DECD Vs. SALES TAX OFFICER

JUDGEMENT

(1.) (Oral). In the sales tax law the uucsiion whether a dissolved firm is an assessable unit and legal entity p hi:s loo often been raised. It arose under the Punjab Sales-tax Act. The Supreme Court in State of Punjab v. Jullundur Vegetables Syndicate, ( 1966) 17 S.T.C. 326( I ) held that a dissolved firm could not be a.ssesset! The same question nose under the Central Provinces and Brar Sales-tax Act, 1947. In Additional Tahsildar v. Gendak'.!. (1968) 21 S.T.C. 263(2) the Supreme Court held following Jullundur case that a dissolved firm was not an assessable unit. Recently it arose under the Bombay Sales-tax Act of 1953 and the Bombay Sales-tax Act, 1959. This time the Supreme Court in Murarilal Mahabir Prasad v. B. R. Vaid, (1976) 37 S.T.C. 77(3) held by a majority (Chandrachud and Sarkaria JJ., A. C. Gupta J. dissenting) that a firm on dissolution did not cease to be an assessable unit for the purpose of sales-tax. In this writ petition the question has now arisen with regard to the Bengal Sales-lax Act 1941 as extended to Delhi.

(2.) The facts of the present case are these. A firm G. L. Amar Nath Si Company was carrying on business at Delhi. It was a partnership firm. It was formed on January 24, 1950. In 1965 two of the five partners retired. In 1966 one of the remaining three partners retired. The two partners, namely, Harbans Lal and Amar Nath continued to carry on their business till June 10, 1967 when by a deed of dissolution of that date the partnership was dissolved. In the dissolution deed Harbans Lal and Amar Nath agreed that none of them shall carry on business in future under the name of G. L. Amar Nath and Company. So far as this partnership was concerned that was its end.

(3.) By a letter dated October 5, 1967, Amar Nath on behalf of the dissolved firm informed the sales-tax officer that the firm stood dissolved with effect from June 10, 1967 and the registration certificate granted to it should therefore be cancelled. He also sent a copy of the dissolution deed along with the letter.