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1980 Supreme(Del) 266
IN THE HIGH COURT OF DELHI AT NEW DELHI
S.S. Chadha, J.
CHETAN DASS & CO. AND OTHERS
Versus
SALES TAX OFFICER AND ASSESSING AUTHORITY, WARD NO. 30, NEW DELHI AND ANOTHER
C.W.P. No. 622 of 1974
Decided On: Decided On : 29-09-1980
V. S. Desai with Aloke K. Bhattacharya and K. R. Nagraja, for the petitioners.
R. C. Chawla, for the respondents.
A dissolved firm cannot be assessed to sales tax.
Headnote:
SALES TAX - REFUND - DISSOLVED FIRM - NO ASSESSMENT MADE - NO JURISDICTION TO ASSESS - RETURNS FURNISHED TO BE TAKEN AS CORRECT AND COMPLETE - TAX PAID ON SELF-ASSESSMENT BASIS - REFUND OF TAX DEPOSITED WITH RETURNS - NOT ALLOWABLE.
Fact of the Case:
The petitioner firm, M/s. Piara Ram Chetan Dass, was dissolved on 9th September, 1969. The firm had been filing quarterly returns and depositing the tax due on self-assessment basis with the Government both under the Central Sales Tax Act, 1956 (Central Act) and the Bengal Finance (Sales Tax) Act, 1941, as extended to the Union Territory of Delhi (local Act). After the dissolution of the firm, the petitioners, as the surviving partners and legal representatives of the deceased partner, filed applications claiming refund of the tax deposited with the four quarterly returns in each year. The applications were rejected on the ground that no assessment could be framed being a dissolved firm and without framing the assessment orders, no refund could accrue.
Finding of the Court:
The court held that an assessment on a dissolved firm cannot be made, whether the proceedings were initiated before or after the firm was dissolved. The notified authority/assessing authority applied the law laid down by the Supreme Court and did not rightly assess the firm to any tax and filed the case considering it as a case of dissolved firm. No amount of tax due from the dealer-firm has been assessed under section 11 of the local Act.
Issues: Whether a dissolved firm can be assessed to sales tax?
Ratio Decidendi: The court relied on the decision of the Supreme Court in State of Punjab v. Jullundur Vegetables Syndicate [1966] 17 STC 326 (SC), which held that a dissolved firm cannot be assessed to sales tax. The court held that the material provisions of the East Punjab General Sales Tax Act, 1948, are in pari materia with the provisions of the Central Act and the local Act. Therefore, an assessment on a dissolved firm cannot be made, whether the proceedings were initiated before or after the firm was dissolved.
Final Decision: The court dismissed the writ petitions filed by the petitioners.
S.S. CHADHA, J.
This judgment will dispose C.W.P. Nos. 622 to 634 of 1974 filed under articles 226 and 227 of the Constitution of India as they raise common question of facts and law.
M/s. Piara Ram Chetan Dass, petitioner No. 1 (hereinafter called as the firm), was a partnership firm consisting of three partners, namely, (1) Chetan Dass Bhatia, (2) Ram Lal Bhatia, and (3) Lachman Dass Bhatia. It had its office situated at No. 2046, Katra Tobacco, Khari Baoli, Delhi, and its branch office named and styled as M/s. Rama Hing Company also having its place of business at Katra Tobacco, Khari Baoli, Delhi. Both the head office and branch office carried on the business of purchase, sale and manufacturing of compound hing at their respective places of business mentioned above. The firm also had a godown situated at 15, Kolhapur Road, Delhi. The firm and its branch were registered as a dealer under the Central Sales Tax Act, 1956 (hereinafter referred to as the Central Act), vide registration certificate No. 473 granted to it under the Central Act. The said registration certificate prescribed quarterly returns of turnover for the firm. The firm and its branch were also registered as dealer under the Bengal Finance (Sales Tax) Act, 1941, as extended to the Union Territory of Delhi (hereinafter called the local Act), vide registration certificate No. 981-A granted to it under the local Act. The said registration certificate also prescribed quarterly returns of the turnover under section 10 of the local Act for the firm. The firm had been filing its quarterly returns and depositing the tax due on self-assessment basis with the Government both under the Central Act and the local Act.
Before the notified authority/assessing authority concerned under the Central Act/local Act could accept the returns furnished by the firm as correct and complete or frame an assessment to determine the tax due from the firm under section 9 of the Central Act read with section 11 of the local Act or enable it to adjust the amount paid along with the return against the tax determined to be due from it, the firm was dissolved with effect from 9th September, 1969. The notified authority/assessing authority was notified on 11th September, 1969, of the dissolution of the firm. The Registrar of Firms was also informed on 18th September, 1969, that the firm M/s. Piara Ram Chetan Dass had been dissolved with effect from 9th September, 1969. The assessing authority issued and served upon the firm a notice dated 29th November, 1966, in the prescribed form S.T. XIV under section 11 read with section 14 of the local Act with respect to the quarterly returns filed under the local Act for the year 1965-66. This is the subject-matter of C.W.P. No. 634 of 1974. In all other cases for the purpose of making an assessment for the respective years, the notices were issued and served upon the firm after 9th September, 1969, the date of dissolution of the firm.
The petitioners appeared before the notified authority/assessing authority in response to the notices in the prescribed form and raised written objections assailing the jurisdiction of the notified authority/assessing authority to frame an assessment on the ground that there was no provision in the Central Act/local Act authorising him to make an assessment against the dissolved firm and pleaded for the vacation of the notice being wholly unwarranted, illegal and without jurisdiction. The notified authority/assessing authority went into the question whether M/s. Piara Ram Chetan Dass, the dealer-firm, was dissolved with effect from 9th September, 1969. The notified authority/assessing authority recorded a finding that the factum of dissolution of the firm was established in the case and it was held accordingly. The notified authority/assessing authority noticed the law laid down by the Supreme Court in the case of State of Punjab v. Jullundur Vegetables Syndicate [1966] 17 STC 326 (SC), on the point that a dissolve
