COMMISSIONER OF SALES TAX Vs. SAMPAT RAM JAIN

JUDGEMENT

(1.) AT the instance of the Commissioner of Sales Tax, U.P., Lucknow, the Additional Judge (Revisions) Sales Tax, Agra, has submitted this statement of the case under section 11(3) of the U.P. Sales Tax Act for the opinion of this court on the following question of law :-

(2.) SRI Sampat Ram, the assessee in this case, was a partner of the firm which carried on business in the name and style of M/s. Mangal Sen Sita Ram. The firm was dissolved on 21st December, 1964. In respect of the assessment years 1961-62 to 1964-65 the firm was assessed to sales tax which was in arrears. Proceedings for the recovery of the arrears were initiated and tax was sought to be recovered from the assessee by serving upon him a warrant of arrest by the kurk-amin. The assessee made a representation to the Sales Tax officer to withdraw the recovery proceedings against him but this request of the assessee was refused. Thereupon the assessee filed a revision under section 10 and contended before the Judge (Revisions) that no recovery proceeding could be commenced against him without first serving a notice of demand in respect of the arrears and for this contention he relied upon section 3-C(1)(b) of the U.P. Sales Tax Act. This contention prevailed with the Judge (Revisions) who allowed the revision application and directed the Sales Tax Officer to follow the procedure as laid down in section 3(1) of the U.P. Sales Tax Act, before attempting to recover the arrears from the assessee. The Commissioner of Sales Tax applied for a reference under section 11(1) of the Act which has been allowed and this statement of the case has been submitted with the question of law quoted above.

(3.) THE provision quoted above provides for the assessment of a dissolved firm and the liability of its partners in respect of the arrears of tax due against such a firm. In clause (a), a legal fiction has been created as a result of which the assessment against a dissolved firm can be made as if no dissolution had taken place. This means that the procedure for assessment applicable to a live firm would be applicable to a dissolved firm. In the case of a live firm an assessment can be made in the name of the firm and all notices including the notice of demand can be served upon any of the partners. In the case of a dissolved firm also a notice served upon any of the partners would be a sufficient notice upon the remaining partners. Under clause (b) of section 3-C every partner is jointly and severally liable for the payment of the tax due against the dissolved firm and in order to enforce that liability it has been provided that every partner shall be deemed to be a dealer.