MADAN MOHAN Vs. DISTRICT EXCISE AND TAXATION OFFICER

JUDGEMENT

(1.) MADAN Mohan and M/s. Mangat Rai Madan Mohan, through Madan Mohan, partner of the firm, have approached this Court under Article 226 of the Constitution for appropriate writs, orders or directions on the following allegations. M/s. Mangat Rai Madan Mohan, Kot Kapura, was a partnership concern consisting of two partners, namely Mangat Rai and Madan Mohan ; it came into existence under a deed of partnership on 1st April, 1959, and carried on the business of commission agents at Kot Kapura. For the year 1959-60, this firm was assessed under the Punjab General Sales Tax Act on the 24th March, 1961, and for the year 1960-61 on 29th July, 1961. The amounts assessed were duly paid. The firm was dissolved by a dissolution deed dated 31st May, 1962, with effect from the same day, and the assets and liabilities were divided between the partners, with the result that the firm came to an end on that very day. The partners of the dissolved firm did not do business of commission agency or any other business jointly as partners or otherwise after the date of the dissolution. On 3rd August, 1963, the firm through its partners received from the District Excise and Taxation Officer, Bhatinda, respondent No. 1, notice for reasssessment of sales tax for the years 1959-60 and 1960-61 with a direction to appear before him on 16th August, 1963. The, case was adjourned from time to time and on 23rd September, 1963, the petitioners filed an application that since the firm had been dissolved before the notice for reassessment was issued, the said notice was illegal. No order was passed on this application nor was any communicated to the petitioners and. the case was adjourned to 4th October, 1963, for reassessment. On 28th September, 1963, the petitioners sent an application through their Advocate to respondent No. 1 for stay of proceedings so as to enable them to approach this Court on the writ side and obtain a stay order. This prayer was not acceded to and the petitioners were informed that the assessment would be finalized on 4th October, 1963. On the last mentioned date, some accounts of the petitioners' firm were seen by respondent No. 1 but no order of assessment was made. On 15th October, 1963, the petitioners received a notice of demand dated 11th October, 1963, for the year 1959-60 but there was no information about the assessment for the year 1960-61. After narrating these facts, it is averred that the assessment orders and proceedings for the. years 1959-60 and 1960-61 are illegal, without jurisdiction and bad in law on the ground that no reassessment proceedings could legally start after the dissolution of the firm. Reliance in this connection has been placed on a Full Bench decision of this Court in Jullundur Vegetable Syndicate v. Punjab State 64 P. L. R. 351, and indeed this is the only point on which stress has been laid on behalf of the petitioners.

(2.) IN the return which was filed on 20th November, 1963, reliance was placed on the amendment effected in the Punjab General Sales Tax Act and it was pleaded that since the case of the petitioners for the years 1959-60 and 1960-61 for the purpose of reassessment were pending before the Assessing Authority, the assessments were framed by him in the light of the provisions of the amended Act and the assessments had been actually made under Section 11-A within the prescribed period of four years.

(3.) THE petitioners placed on the record additional grounds dated 30th October, 1963, in which it was averred that the firm had been dissolved on 31st May, 1962, and the information of this dissolution was given to the Assessing Authority on 2nd June, 1962, and that in spite of this information having been brought to the notice of the Assessing Authority, the impugned orders were passed which are wholly illegal and in excess of jurisdiction. In the affidavit in reply sworn by the Excise and Taxation Commissioner on 28th November, 1963, it was pleaded that the Assessing Authority had definite information in his possession that part of the petitioners' turnover for the years 1959-60 and 1960-61 had escaped assessment. This had been detected by the Assessing Authority in the course of inspection of the petitioners' business premises on 19th May, 1962, when the petitioners were found in possession of "c" Forms (both portions original and duplicate) for the said two years. According to Section 11-A of the Punjab General Sales Tax Act, the Assessing Authority possessing definite information of escaped assessment could frame reassessment. It was expressly denied that the petitioners had sent any intimation about the dissolution of the firm on 2nd June, 1962. Such information was sent only on 3rd August, 1962, though they were required to do so under the law within 30 days of the date of the change in the constitution of the firm. As the petitioners' case for the years 1959-60 and 1960-61 for purpose of reassessment were pending before the Assessing Authority, the impugned assessment was in accordance with law.