GHANSHYAMDAS CHHOTALAL Vs. SALES TAX OFFICER

JUDGEMENT

(1.) BY this application under Articles 226 and 227 of the Constitution, the petitioner questions the legality of the assessment to sales tax made against a partnership firm doing business under the name and style of M/s Chhotalal Keshaoram and co. , Rajanandgaon, by an order passed by the Sales Tax Officer, Raipur, on 20th July 1954. By that order the taxable turnover of the firm for the period from 17th february 1950 to 30th November 1951 was determined at Rs. 1,96,000/-and the amount of sales tax payable by the firm was found to be Rs. 6,125/ -. The petitioner also challenges the legality of the notices issued to the' firm in Form XII on 8th December 1952, 23rd October 1953, 6th May 1954 and 24th May 1954, under Section 11 (5) of the Central Provinces and Berar Sales Tax Act, 1947, (here, inafter referred to as the Act), pursuant to which the impugned assessment was made. He prays that the said notices, the assessment order made by the Sales tax Officer, Raipur, the demand notices for payment of Rs. 6125/-, and the decisions of the Appellate Assistant Commissioner of Sales Tax, Raipur, and the commissioner of Sales Tax, Madhya Pradesh, upholding the assessment made by the Sales Tax Officer be quashed by the issue of a writ of certiorari.

(2.) THE material facts are that on nth January and 19th January 1949 the petitioner and four other persons, including one Girdharilal Govindji, executed a deed of partnership for doing business of purchase and sale of Tendu leaves grown in, plucked and collected from Korar Range, Kanker Forest, for the seasons during the years 1949, 1950 and 1951 ending with 31st March 1952. The partnership actually came into existence on 6th December 1948. One of the terms of the partnership was that it would last for a period of three years ending on 31st March 1952 and that it shall not be terminated during the term of the Korar forest contract which also terminated on 31st March 1952. This partnership was a 'dealer' as defined by section a (c) of the Act. It did not get itself registered as required by Section 8. It did not file any returns even when notices under Section 10 requiring it to file returns were served on it when the Assistant Commissioner of Sales Tax found that the turnover of the firm exceeded the taxable quantum on 22nd November 1949 and it was liable to submit returns from, 17th February 1950. In response to the notices issued under Section 11 (5), the firm put an appearance before the sales Tax Officer, Raipur, and contested its liability to assessment. Before the Sales Tax Officer, it was contended on behalf of the firm that it was "dissolved by a deed executed on 13th September 1949; that under the terms of dissolution the lease of the forest range in respect of the seasons 1950 and 1951 was made over to Girdharilal Govindji who agreed to furnish security to the petitioner for regular payment of all instalments of lease-money in respect of the unexpired term of the forest lease; that Tendu leaves during the season 1950 were plucked and collected by Girdharilal alone; that on 28th February 1951. Girdharilal transferred to the applicant the lease in respect of the unexpired period of the year 1951 which, was then worked by the petitioner jointly with M/s. Monanlal Hargovinddas. The Sales Tax Officer rejected this contention and by an order passed on 20th July 1954 held that there was no dissolution of the firm during the material period; and that in this period its taxable turnover amounted to Rs. 1,96,000/- and it was liable to pay Rs. 6125/- as sales tax". On 5th September, 1954, a notice for the payment of the amount of tax was issued in the name of the firm.

(3.) THE firm then preferred an appeal before the Appellate Assistant Commissioner of Sales Tax, Raipur, objecting to the assessment made by the Sales Tax Officer inter alia on the grounds that the notices issued under Section 11 (5) of the Act were barred by time, and that the firm, bad been dissolved on 13th September 1949. The Appellate Assistant Commissioner rejected the contention about limitation. He, however, came to the conclusion that the firm, was dissolved on 13th September 1949 but as by the dissolution deed dated the 13th September 1949 and the subsequent agreement concluded on 28th February 1951, the petitioner-Ghanshyamadas (became the transferee of the business of the firm M/s. Chhotalal Keshaoram and Co. , he was liable under Section 18 of the Act for the payment of the tax for the period, and consequently liable to pay the tax assessed by the Sales Tax Officer. The Appellate Assistant Commissioner also added :