PULAK CHANDRA PAUL Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) These three appeals are directed against the orders See [1975] 36 S.T.C. 98 passed by Amiya Kumar Mookerji, J., whereby the learned Judge dismissed the writ petitions of the appellant.

(2.) The case of the appellant was that he along with his brother Kanak Paul had been carrying on a partnership business under the name and style of M/s. Gopal Chandra Paul & Sons. It was alleged that the firm was a dealer within the meaning of the Bengal Finance (Sales Tax) Act, 1941 and the Central Sales Tax Act, 1956 and held registration certificates under both the Acts. The said partnership firm was dissolved on 17th November, 1972. The appellant intimated respondent No. 1, the Commercial Tax Officer, Chinabazar Charge, about the dissolution of the firm by two separate letters, both dated 21st April, 1973. By the said letters, the appellant requested respondent No. 1 to cancel the registration certificates which were also surrendered along with the said letters. In spite of the dissolution of the firm, respondent No. 1 served notices for the assessment of sales tax under both the said Acts for the periods of 4 quarters ended previous to the day of Aukshay Tritiya, 1376 B. S., 1377 B. S., 1378 B. S. and 1379 B. S. The appellant challenged the said notices and the authority of respondent No. 1 to assess the dissolved firm by filing writ petitions in this court. It was contended by the appellant that in the absence of any provision in either of the said Acts for the assessment of sales tax of a dissolved firm, respondent No. 1 acted illegally and without jurisdiction in issuing the said notices. The said contention of the appellant was overruled by the learned Judge and the writ petitions were dismissed. Hence these appeals.

(3.) The only question that is involved in these appeals is whether a dissolved firm can be assessed under the Bengal Finance (Sales Tax) Act, 1941, or under the Central Sales Tax Act, 1956. Mr. Chakraborty, learned Advocate appearing on behalf of the appellant, has placed strong reliance on the following observation of the Supreme Court in State of Punjab v. Jullundur Vegetables Syndicate [1966] 17 S.T.C. 326 (S.C.): The first question is whether a firm is a separate assessable entity for the purposes of the Act or whether it is only a compendious term used to denote the group of partners. The definition of 'dealer' takes in three categories of assessable units, namely, person, firm or a Hindu joint family. The substantive and the procedural provisions of the Act prescribe the mode of assessment and realisation of the tax assessed on such a dealer. If we read the expression 'firm' in substitution of the word 'dealer', it will be apparent that a firm is an independent assessable unit for the purposes of the Act. Indeed, a firm has been given the same status under the Act as is given to it under the Income-tax Act. Under Section 3 of the Income- tax Act also a 'firm' is treated as a unit of assessment and as a distinct assessable entity. Though under the partnership law a firm is not a legal entity but only consists of individual partners for the time being, for tax law, income-tax as well as sales tax, it is a legal entity. If that be so, on dissolution, the firm ceases to be a legal entity. Thereafter, on principle, unless there is a statutory provision permitting the assessment of a dissolved firm, there is no longer any scope for assessing the firm which ceased to have a legal existence. As in the present case, admittedly, the firm was dissolved before the order of assessment was made, the said order was bad.