K BALARAMA NAIDU Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE appellants were previously partners of a partnership firm under the name and style of A. L. S. & Co. , Madras. For the assessment year 1978-79, the partnership firm had carried on business. Returns were filed showing the taxable turnover of their business. During check of accounts the assessing officer noticed that the partnership had omitted to include certain other purchases. He, therefore, added an equal amount to the turnover as per accounts for probable omissions and determining the total taxable turnover passed an assessment order. Penalty was also levied under section 12 (3) of the Tamil Nadu General Sales Tax Act, 1959

(2.) THE facts are not in dispute. THE appellants were partners of the firm at the time of its dissolution. A notice was served by the assessing officer on one of the partners only and not on the other partners who were partners of the partnership firm at the time of its dissolution. Section 19a of the Tamil Nadu General Sales Tax Act was brought on the statute book by the Legislature in the wake of the judgment of the Supreme Court in State of Punjab v. Jullundur Vegetables Syndicate 1966 AIR (SC) 1295, 1966 (17) STC 326, 1966 (2) SCR 457, 68 Punjlr 435. THE Supreme Court had in that case held that an assessment of dissolved firm was invalid unless there was a statutory provision permitting such assessment. Since the Tamil Nadu General Sales Tax Act, 1959, as it originally stood did not contain any such specific provision permitting assessment of a dissolved firm, the want of legal sanction was removed by the Legislature by introducing section19a with retrospective effect. Section 19a of the Act deals with the liability to tax of partitioned Hindu family, dissolved firm or other association of persons and lays down that the tax payable under the Act by such a Hindu undivided family, firm or association of persons for the period up to the date of such partition or dissolution shall be assessed as if no such partition or dissolution had taken place, and all the provisions of the Act shall apply accordingly. It also provides that every person who was at the time of such partition or dissolution a member or partner of the Hindu undivided family, firm or association of persons as well as legal representatives of any such person who may have died shall, notwithstanding such partition or dissolution be jointly and severally liable for the payment of the tax, penalty or other amount payable under this act by the family, firm or association of persons, whether the assessment was made prior to or after such partition or dissolution. This section, therefore, is a statutory provision permitting assessment on dissolved partnership firms and fixes the liability both jointly and severally on the partners who were partners at the time of the dissolution. Rule 52 (2) of the Tamil Nadu General Sales Tax Rules, 1959 provides as follows: "where any Hindu undivided family, firm or other association of persons is partitioned, dissolved or discontinued, notice, summons or orders issued under the Act or these rules may be served on any member of the Hindu undivided family, any person who was a partner (not being a minor) or member of the association, as the case may be, immediately before such partition, dissolution or discontinuance. " * A bare reading of the rule unmistakably shows that service of notice, summons or orders issued under the Act on any member of the hindu undivided family, any partner (not being a minor) and any member of the association would be deemed to be proper service in accordance with law provided the service is on any such person or partner who had that status before the partition or dissolution. THE learned single Judge, therefore, rightly repelled the submission raised on behalf of the appellants in the writ petition that service on one partner could not be considered as valid service so as to bind the appellants who, it is not disputed, were the partners of the firm at the time of its dissolution.