In the absence of a statutory provision permitting the assessment of a dissolved firm, no valid assessment order can be made if the dissolution took place before the order was made.

Judgment

BHARGAVA, J.

( 1 ) THE appellant-firm was carrying on business as commission agents in cotton and food-grains in Punjab, so that its income in respect of the year 1959-60 became liable to sales tax under the Punjab General Sales Tax Act (No. 46 of 1948) (hereinafter referred to as "the Act" ). The appellant did not submit any return, and consequently, a notice under section 11 (5) of the Act was issued, and the case was fixed for 1/07/1960. The appellant then filed a petition under Article 226 of the Constitution, challenging the imposition of purchase tax on cotton, and proceedings in the assessment of sales tax were stayed under the orders of the High court. After the decision of the High court in that writ petition, proceedings were resumed on 30/11/1961. Then, there were various dates fixed in the proceedings and adjournments were granted at the request of the appellant. Ultimately, 17/02/1962, was fixed for final hearing. On that date, information was given on behalf of the appellant that the firm had ceased to work in February, 1961, and that, subsequently, a formal document evidencing the dissolution of the firm was executed on 8/08/1961. The Assessing Authority disregarded this claim that the appellant could not be assessed on account of the dissolution as a. firm, and proceeded to pass an order of assessment on 12/03/1962. Thereupon, the appellant filed a petition under Article-226 of the Constitution in the Punjab High court, praying for the quashing of this order of assessment on the ground that no such order could be made after the dissolution of the appellant-firm. The High court dismissed the petition, and consequently, the appellant has come up to this court on certificate granted by the High court. The point raised on behalf of the appellant was that, under the Act, there was no provision for making an assessment after the dissolution of a firm, even in respect of income earned by the firmwhile it was in existence, and consequently, the order passed by the Assessing Authority on 12/03/1962, was void. The High court in dealing with the petition, held that the following facts were admitted:- (1) that the firm was in existence and actually did business during the period 1959-60 for which assessment has been made; (2) that proceedings were initiated long before the alleged date of dissolution of the firm; and (3) that no formal intimation as required under section 16 of the Act relating to the dissolution of the firm was given to the prescribed authority and intimation of the dissolution was given only by the counsel during one of the hearings before the final assessment order was passed. On these facts, the High court took the view that the dissolution of the firm did not stand in the way of the Assessing Authority passing the order of assessment, because it was alleged that the dissolution took place after the assessment proceedings had been initiated and the intimation of the dissolution was not given until shortly before the final order of assessment was passed. This view taken by the High court has to be held to be incorrect because of the decision of this court in the State of Punjab v. M/s. Jullundur Vegetables Syndicate. That was a case in which the assessee-firm was, no doubt, dissolved before assessment proceedings were started, but this court held that, while there was no provision in the Punjab General Sales Tax Act for making assessment after dissolution of a firm, no valid assessment order could be made if the dissolution took place before that order of assessment was made. Subba Rao, J. , as he then was, speaking for the court, held: "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