STATE OF ANDHRA PRADESH Vs. GODAVARTHI KASIVISWANADHAM

JUDGEMENT

(1.) Godavarthi Venkateswarlu was a dealer in pulses. The Sales-tax Officers inspected his business premises on 4-3-1958. They detected in the course of that inspection, certain discrepancies in his accounts. Venkateswarlu, however, died on 17-5-1958. His son, Kasiviswanatham, the respondent in the Tax Revision Case, as the legal representative of his deceased father, who was the dealer, submitted to the Deputy Commercial Tax Officer, Tenali, the return for the year 1957-58 (i.e. from 1-4-1957 to 31-3-1958) for the purpose of sales tax assessment. He also produced all the accounts maintained by the deceased dealer. The net turnover reported in the return was Rs. 32,324-13-0. The Deputy Commercial Tax Officer, however, did not accept this turnover, as the accounts maintained were found to be not correct. Therefore by his proceedings dated 15-12-1958, the Officer assessed the deceased dealer to the best of his judgment assessment. Later, in his proceedings dated 18-12-1961, the officer also levied a penalty of Rupees 1879 under Section 14 (2) of the Andhra Pradesh General Sales Tax Act 1957 (hereinafter called the Sales Tax Act). The respondent preferred an appeal against this before the Assistant Commissioner. The respondent carried the matter in Second Appeal to the Sales Tax Appellate Tribunal . The Tribunal allowed the appeal and set aside the levy of penalty holding that the alleged concealmentshad occurred prior to the death of the respondents father (i.e. the dealer), that the respondent was not conscious of them and the respondent could not be held responsible for them and could not be pernalised for the acts of his father. The principle of Actio Personalis Moritur Cum Persona was invoked by the Tribunal to the aid of the respondent-appellant. The State has filed this revision case against the said order of the Tribunal raising the contention "whether the legal heir of a deceased dealer, who succeeded to the business of his father, is not liable for the penalty under Section 14 (2), particularly when the return which gave rise to the best judgement assessment was filed by him"

(2.) The revision case orginally came up before a Division Bench consisting of Basi Reddy, J. and one of us viz., Sambasivarao, J. The learned Advocate for the respondent contended before the Divisional Bench, that Rule 23 (1) of the Rules framed under the Sales Tax Act, under which penalty was levied against the respondent, is ultra vires, in that, whereas section 39 (2) (o) of the act speaks of the the assessment and revcovery of tax only and there is no reference there in to penalty, Rule 23 (1) which purports to have been framed under the powers conferred by the aforesaid Section 39 (2) (o) seeks to impose not only tax, but also penalty in respect of business of the deceased person. In view of this important question, the Division Bench referred the matter to the Full Bench. Thus the matter has come up before us.

(3.) The important question that arises, thus, for consideration by us is, whether Rule 23 (1) of the Rules in ultra vires the power of the rule-making authority. Section 39 of the Sales Tax Act confers on the State Government power to make rules. Portions of that section which are relevant for the present consideration are as follows: 39 (1):-The State Government may make rules to carry out the purposes of this Act. (2):-In partiular and without prejudice to the generality of the foregoing power, such rules may provide for- (a) to (n) .......................................................................... (o) the assessment and recovery of tax under this Act in respect of a business which is discontinued or the ownership of which has changed or in respect of a business of a deceased person......................... Rule 23, under which the impugned penalty was levied, is in the following terms :- "23. (1):- Where any dealer doing business in prospect of which tax is payable under this Act, is dead, the executor, administrator, successor in title or other legal representative of the deceased dealer shall, in respect of such business, be liable to submit the returns due under these rules, 23 (1):-and to assessment under Section 5,5-A, 6 or 11 or any notification under Section 9 (1) and to pay out of the estate of the deceased dealer, to the tax and/or any penalty assessed or levied as payable by the deceased dealer. (2):-The provisions relating to appeals and revision shall be applicable to assessments made under sub-rule (1) as if the Executor, Administrator, successor in title or other legal representative were himself the dealer. (3):-The provisions of sub-rules (1) and (2) shall apply mutatis mutandis to a partnership firm of which the managing partners have died".