JULLUNDUR VEGETABLE SYNDICATE Vs. PUNJAB STATE

JUDGEMENT

(1.) THE present reference has been made to this Court by the Financial Commissioner (Revenue), Punjab, by his order dated the 11th April, 1959, under the provisions of section 22 of the East Punjab General Sales Tax Act, 1948, and has arisen in the following circumstances :- Messrs Jullundur Vegetable Syndicate which is a partnership firm started their business of selling vegetables and fruits at Jullundur on the 4th October, 1952, and carried on the same right up to the end of the year of assessment, i.e. up to the 31st March, 1953, and even for some period after that. Proceedings for assessment of the sales tax were taken against them and an assessment of the same was at one time made on the 30th May, 1953. This assessment order was later quashed on the 11th April, 1955, by the Financial Commissioner on the ground that the authority who had made the assessment had no jurisdiction to do so. The assessment was made afresh on the 20th October, 1956, and in this the taxable turnover of the firm was taken to be Rs. 15,04,091-11-3, and the tax payable was assessed at Rs. 47,002-14-0. In appeal by the assessees, the Deputy Excise and Taxation Commissioner reduced the figure of turnover to Rs. 9,61,591-11-3 and the tax payable to Rs. 30,049-12-0. When the assessees went up in revision to the Financial Commissioner against the aforesaid appellate order they raised a point that the assessee-firm had been dissolved with effect from the 11th July, 1953, and a notice of dissolution had been given to the Department in pursuance of section 16 of the Act on the 18th July, 1953, and that the assessable unit (the firm) having come to an end no assessment proceedings could be taken against them. Several other points were also raised but in the present proceedings we are not concerned with them. The Financial Commissioner turned down the aforesaid contention of the assessees on the short ground that the taxable period was from the 4th October, 1952, to 31st March, 1953, and the assessee-firm had been admittedly in existence during this entire period and could, therefore, be taxed for the same. The assessees then made an application under section 22 of the Act to the Financial Commissioner praying for reference of the case to the High Court on the various points of law including the one relating to the non-assessability of the assessee-firm on the ground of its having been dissolved on the 11th July, 1953. The learned Financial Commissioner refused to make a reference on the other points, but he has referred the case to this Court on the aforesaid point of non-assessability of the firm because of its dissolution. No law point actually has been framed by the learned Financial Commissioner in his order of reference but the facts giving rise to this reference are stated in his order.

(2.) ON behalf of the assessee-firm reliance is placed on a case Jagat Behari Tandon and Another v. Sales Tax Officer, Etawah and Another ([1957] 8 S.T.C. 459.), which was decided by a Division Bench of the Allahabad High Court consisting of Mootham, C.J., and Agarwala, J., which to a very great extent supports his contention that a firm after its dissolution cannot be assessed to sales tax. It was observed in the penultimate paragraph of that judgment as under :-

(3.) THE case will be placed before the Honourable the Chief Justice for appropriate orders. MEHAR SINGH, J. - I agree. In pursuance of the the abovesaid Order of Reference, the reference came on for hearing before the Full Bench :- H. L. Sibal and S. C. Sibal, for the petitioner. H. S. Doabia (Additional Advocate-General) and A. M. Suri, for the respondent.