Judgment

PATHAK, J. :- These appeals by special leave are directed against the judgment and order dated February 14, 1978 of the High Court of Kerala dismissing two tax revision petitions arising out of assessments made under the Kerala General Sales Tax Act, 1963.

2. The respondent, Messrs. K. Kelukutty is a partnership firm dealing in timber. It consists of six partners. It filed returns of its taxable turnover for the assessment years 1968-69 and 1969-70 under the Kerala General Sales Tax Act, 1963, and the assessments were completed by the Sales Tax Officer. Subsequently, the Sales Tax Officer discovered that the partners of the respondent firm owned a Saw Mill, and the Saw Mill was run by a partnership firm Messrs. K. K. K. Sons Saw Mills which .consisted of the same partners as the respondent firm. He found that during the assessment years 1968-69 and 1969-70 they had sold saw dust from the mill, but, had not been assessed to sales tax on that turnover. The Sales Tax Officer took the view that as both Messrs. K. Kelukutty and Messrs. K. K. K. Sons Saw Mills consisted of identical partners, the two businesses carried on respectively by them had to be treated as the business of a single partnership firm and, therefore, the turnover of the sale of saw dust had to be included in the earlier assessments made on the respondent firm. The assessment orders were upheld by the Appellate Assistant Commissioner, Sales Tax. Thereafter, the appeals field by the respondent firm before the Sales Tax Appellate Tribunal were allowed by its order dated March 30, 1976 and the cases were remanded for fresh consideration. The Revenue applied to the High Court in revision, Tax Revision Cases Nos. 6 and 9 of 1977, on the following two questions :-

(A) Was the Appellate Tribunal justified in law in holding that the reasoning in the decision reported in 70 ITR 843 : (AIR 1969 Punj 8) is applicable to the instant case and directing a further investigation and de novo disposal of the matter, in the light of the observations contained in paragraph 15 of the order?

(B) In the light of admitted or proved fact that the partners of the assessees firm and that of the firm K. K. K. Saw Mills are the same, was the Appellate Tribunal justified in its view that there is no bar in there being two firms with the same partners, carrying on business independently? Is not the said approach and view against the principles of Partnership Act, and the ratio of the decision reported in 21 STC 72 and (1946) 14 ITR 272 (Bom)?

3. On February 14, 1978, the High Court of Kerala dismissed the two revision petitions in the view that Messrs. K. K. K. Sons Saw Mills was a partnership firm distinct from the respondent firm for the purposes of sales tax assessment and the turnover of one could not be included in the turnover of the other. Reliance was placed by the High Court on the decision of this Court in State of Punjab v. M/s. Jullunder Vegetables Syndicate, 17 STC 326 .

4. The word "dealer" has been defined by Cl. (viii) of S. 2 of the Kerala General Sales Tax Act to mean "any person who carries on the business of buying, selling, supplying or distributing goods ................." and the word "person" has been defined by Cl. (xvi-A) of S. 2 of the Act as including a firm. Therefore, a partnership firm must be regarded under that Act as an assessable entity separate and distinct from its individual partners. That would be in line with the view taken by this Court respecting a partnership firm as an assessable entity under the Income Tax Act. See Commr. of Income-Tax, West Bengal v. A. W. Figgies and Co., 24 ITR 405. The question remains, however, whether when the partners constituting a partnership firm carrying on one business constitute thereafter another partnership firm carrying on a separate and distinct business are there two distinct partnership firms in whose hands the turnover of the two businesses falls to be respectively assessed or is there in law only a single part