BANU ASAN Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) This petition seeks to vacate the order by the Collector dated November 18, 1959, and it has been filed in the following circumstances. The Income Tax Officer, Special Circle, Trivandrum, had on September 23, 1953, issued the certificate to recover Rs. 2,62,899-6-0 from the estate of one E. C. Govindan Asan, and the Inspecting Assistant Commissioner of Agricultural Income Tax Quilon, had sent certificate dated December 21, 1953 for recovery of Rs. 33,807-5-0 from the legal representative of the same Govindan Asan. There is yet another certificate dated January 13, 1954 from the Sales Tax Officer, II Circle, Quilon for the recovery of Rs. 1,11,753-6-9 from Messrs. E. C. Govindan Asan and Sons. The heirs of the deceased have raised several objections to their properties being attached and sold in realisation of the aforesaid certificates. His two sons and daughter had objected to certain properties being notified for sale on September 28, 1954, and his two widows had objected before the Collector on September 24, 1954. The sons then brought the matter to the High Court in O. P. 127/54, on which an order was passed on December 2, 1954. In the meantime, the Tahsildar, Quilon, attached some amounts due to the sons and daughter from the Municipality and the sons brought the matter to the High Court through O. P. Nos. 74 and 94 of 1955, which were decided on August 22, 1955. The Tahsildar of Quilon, thereafter heard and rejected the claims, which was followed by O. P. 315/55. The High Court allowed the petition on July 9, 1956, and directed the Collector to proceed under S.34 of the Revenue Recovery Act, 1951. In the proceeding under the aforesaid section, the order dated November 18, 1959, had been passed, which this writ petition seeks to vacate. That order covers the following four categories :

(2.) Obviously the heirs incur no liability to pay the tax of the deceased assessee personally, unless some assets of the deceased be shown to have come into their hands, of which they cannot give satisfactory account. They would to that extent be personally liable, but that follows the finding of the assets of the deceased having not been properly administered. It further follows that before the taxing authority attaches the personal properties of such heirs, the authority must be satisfied about improper administration, and the Collector has not expressly so found in the case before us. In case that be found to be the position, it would make the personal properties of the heirs liable to attachment, which would include what has been settled under the settlement deed in 1949, liable, but there should be finding supported by materials The other ground of the partners being personally liable to meet the arrears of the sales tax, is also partly correct. Nobody disputes that partners incur the liability to personally pay the tax, but that is correct only where the partnership has been assessed to the tax, and, therefore, the order must show whether the sons were partners of the firm, which had been assessed to the tax. Clearly, the income tax is not on the firm, of which the sons were partners, and, therefore, there is no personal liability of the sons to meet the income tax from their own properties. As regards the agricultural income tax the position is the same. The arrears of the sales tax may be of the firm, of which the sons were partners; but there should be finding about their being partners of the firm, which has been assessed to pay the sales tax. It follows that the sons would not be liable to discharge the income tax and agricultural income tax from the personal properties unless they be found not to have properly administered the estate of the deceased. It further follows that they would be liable for sales tax only if found to be partners. The daughter has been exempted, and it is agreed that her exemption would stand. We, therefore, vacate the order of the Collector, and direct his making a fresh order in view of the legal positions clarified above, the parties bearing their costs.