LAWS(MPH)-1965-7-8

MANGALCHAND Vs. SALES TAX OFFICER

Decided On July 22, 1965
MANGALCHAND Appellant
V/S
SALES TAX OFFICER Respondents

JUDGEMENT

(1.) BY this application under Article 226 of the Constitution, the petitioners seek a writ of certiorari for quashing proceedings initiated by the opponent, the Sales Tax Officer-cum-Additional Tehsildar, Narsinghpur, for recovery from them as arrears of land revenue of sales tax amount due from a firm doing business under the name and style of "komalchand Bhupendrasingh" at Ramward in Kandeli town of Narsinghpur Tehsil. The said firm was registered as a "dealer" under the Central Provinces and Berar Sales Tax Act, 1947 (hereinafter referred to as the "act of 1947") and held a certificate of registration bearing No. NPR-200.

(2.) THE petitioners' case is that in 1947 a joint family consisting of themselves and three other sons of the petitioner-Mangalchand-was doing business in grains, oil-seeds, kirana, that it was registered as a. dealer under the Act of 1947 and a registration certificate bearing No. NPR-85 was issued to it; that in the application which the joint family firm made for registration, the principal place of business was mentioned as "mangalchand Bhikamchand, Gotegaon" and the additional place of business was stated to be "komalchand Bhupendrasingh, Ramward, Kandeli town (Narsinghpur Tehsil)"; that the additional place of business did not identify the business of "komalchand Bhupendrasingh" as business of the joint family firm ; that the firm of "komalchand Bhupendrasingh" had a separate existence by itself and was doing business under a separate registration certificate bearing No. NPR-200 ; that on or about 6th November, 1953, the joint family disrupted and the four petitioners thereafter formed a partnership by a deed dated the 26th February, 1954, and since then were doing business in the name of Mangalchand Bhikamchand; that the liability of this partnership firm was limited to their own dealings ; that they could not be made liable for any liability of any other person or persons in respect of any period ; and that the joint family firm or the partnership firm after its constitution did not do any business at the additional address. The petitioners further say that the firm Komalchand Bhupendrasingh wound up its business in or about 1955; that in respect of certain assessments of sales tax made against that firm the opponent is seeking to recover from them, that is the petitioners, as arrears of land revenue an amount of Rs. 8,467. 44 P. purporting to do so under Section 23 of the Madhya Pradesh General Sales Tax Act, 1958 ; and that they are in no way liable to pay this amount due from the firm Komalchand Bhupendrasingh. The petitioners also complain that despite several protests and representations, the Sales Tax Officer-cum-Additional Tehsildar, Narsinghpur, is attempting to recover the amount from them acting mala fide and in a high-handed manner without giving them an opportunity to show that they are in no way liable for any dues recoverable from the firm Komalchand Bhupendrasingh and to contest the initial liability as also the details of transactions and quantification ; that the opponent was bound to inquire into judicially and adjudicate upon their objections and then to pass an order so as to enable them to challenge any adverse order before the appropriate higher authorities; and that the recovery proceedings initiated by the opponent are wholly without jurisdiction.

(3.) IN the return filed by the opponent, it is not disputed that the firms Mangalchand Bhikamchand and Komalchand Bhupendrasingh were registered separately as dealers and that separate registration certificates bearing different numbers were issued to them. It is also admitted that an order assessing the firm Komalchand Bhupendrasingh to tax in the sum of Rs. 8,467. 44 P. for the period from 10th February, 1948, to 2nd November, 1956, was passed on 18th February, 1960. In justification of the recovery proceedings commenced against the petitioners, it has been repeatedly stated in the return that there is ample material on record to show that during the assessment period in question the joint family of Mangalchand Bhikamchand had proprietary interest in the firm known as Komalchand Bhupendra-singh and was carrying on business in gold, silver and money-lending, in addition to the business of grains, oil-seeds and kirana. One of the circumstances stated in the return as showing that the business of Komalchand Bhupendrasingh was identical with the business of Mangalchand Bhikamchand and that the joint Hindu family was the owner of both the businesses is that in the application dated 3rd August, 1947, which the joint family made under Section 8 of the 1947 Act for registration of its business, it was stated that the petitioners as members of the joint family had interest in the firm Komalchand Bhupendrasingh and the additional place of business was shown to be "komalchand Bhupendrasingh, Ramward, Kandeli (Narsinghpur Tehsil)"; and that the registration certificate No. NPR-85, which was issued to the joint family, also permitted it to do business free of tax for purposes of manufacture for sale, for re-sale and for use in the execution of contracts, not only in grains and kirana but also in silver and gold, and the additional place of business was stated therein to be "komalchand Bhupendrasingh, Ramward in Kandeli town (Narsinghpur Tehsil)". The opponent, while not disputing that the partnership deed was executed on 26th February, 1954, showing the four petitioners as partners, has made the following statement in the return with regard to the petitioners' partnership-It is not clear from the deed of partnership as to what happened to the family business carried on under the name and style of Mangalchand Bhikamchand, Bhikamchand Sawaichand and Komalchand Bhupendrasingh and how the assets of these businesses were disposed off. It is also not stated anywhere as to how the so-called new partnership is allowed to carry on the business under the name and style of Mangalchand Bhikamchand, which was business name of the joint family business. It is not admitted that the so-called partnership is a genuine partnership. The respondents say on the facts already stated that the business is still of the joint family. In any case this business as the successors of the Hindu joint family business is liable for the arrears of taxes of the joint family business. At the time of assessment of the shop styled as Komalchand Bhupendrasingh proper notices were issued. The assertion that assessments made without notice to the petitioner and as such not binding on them is without substance. The petitioners' family was satisfied in disclosing the name of Komalchand as proprietor for the certificate purpose. Komalchand was therefore noticed. The whole family is bound by the orders served in those proceedings. It has not been stated in the return that the petitioners were given notices when assessment against the firm Komalchand Bhupedra-singh was being made. On the other hand, it has been averred that ' a notice was given to Komalchand alone and that was sufficient, and that there was no question of giving a fresh notice of assessment and quantification to the present petitioners. The opponent has also added in the return that as the recovery is being made under the provisions of the M. P. Land Revenue Code, 1959, the petitioners can deposit the tax amount under protest and then file a civil suit for refund of the same claiming that they were in no way liable to pay the tax amount due from the firm Komalchand Bhupendrasingh.