Back
1991 Supreme(Mad) 787
High Court of Judicature at Madras
THE HONOURABLE CHIEF JUSTICE DR. ANAND & THE HONOURABLE MR. JUSTICE KANAKARAJ
N. N. Subramaniam - Appellant
Versus
State of Tamil Nadu - Respondents
Tax Case Nos. 1186 and 1187 of 1982
Decided On : 23 October 1991
Service on one of the quondam partners of a dissolved firm is deemed to be service on all the quondam partners and the period of limitation for filing an appeal against the assessment order runs from the date of service on any one of the quondam partners.
Headnote:
SALES TAX - ASSESSMENT - SERVICE OF NOTICE - DISSOLVED FIRM - SERVICE ON ONE OF THE QUONDAM PARTNERS - WHETHER SUFFICIENT - TAMIL NADU GENERAL SALES TAX ACT, 1959, SECTION 19A, RULE 52(2) OF THE TAMIL NADU GENERAL SALES TAX RULES, 1959.
Fact of the Case:
The petitioner, a partner in a dissolved firm, challenged the assessment orders passed against the firm on the ground that he was not served with the assessment orders and therefore, the appeals filed by him were not barred by limitation.
Finding of the Court:
The court held that service on one of the quondam partners of a dissolved firm is deemed to be service on all the quondam partners and the period of limitation for filing an appeal against the assessment order runs from the date of service on any one of the quondam partners.
Issues: Whether service on one of the quondam partners of a dissolved firm is sufficient to bind all the quondam partners.
Ratio Decidendi: The court relied on section 19A of the Tamil Nadu General Sales Tax Act, 1959 and rule 52(2) of the Tamil Nadu General Sales Tax Rules, 1959, which provide that service of notice, summons or orders issued under the Act on any member of a Hindu undivided family, any partner (not being a minor) and any member of the association would be deemed to be proper service in accordance with law provided the service is on any such person or partner who had that status before the partition or dissolution.
Final Decision: The court dismissed the tax revision cases filed by the petitioner.
KANAKARAJ, J.
M/s. Ramakrishna and Company, a partnership. Firm comprising of three partners, were dealers in peas, fried peas and puffed rice. For the assessment year 1973-74, the firm reported a total and taxable turnover of Rs. 2, 85, 928.37 and Rs. 44, 480.93. The assessing authority issued summons for the production of the records. But the assessee failed to respond. After issuing a notice the assessing authority proceeded to assess the firm for the year 1973-74 on a total and taxable turnover of Rs. 12, 43, 713.48, taxable at 3 1/2 per cent. For the assessment year 1974-75 they had reported a total and taxable turnover of Rs. 39, 833.23 and Rs. 19, 144.25, respectively. However, when summons was issued for the production of the accounts the assessee did not produce the accounts. Due to certain irregularities the returns were rejected as incorrect and incomplete and the assessing authority proceeded to resort to best judgment assessment. The proposal notice was served on two partners, but they did not respond. The assessing authority therefore assessed the firm on a total and taxable turnover of Rs. 88, 568.21 and Rs. 73, 132.46 for the assessment year 1974-75, which order was passed on July, 16, 1976. A penalty of Rs. 639 was imposed under section12(3) of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act").
2. Against the said two orders of assessments the petitioner herein namely, N. N. Subramaniam filed two appeals before the Appellate Assistant Commissioner. There was a delay of 2, 428 days in firing the appeal against the assessment order dated February 21, 1975 (1973-74) and a delay of 1883 days in filing the appeal against the assessment order dated July 15, 1976 (1974-75). The petitioner filed two petitions, M.P. Nos. 262 and 263 of 1981, for condonation of the delay in filing the appeals. The appellate authority dismissed these petitions and rejected the appeals as time barred. Second appeals were therefore filed before the Tamil Nadu Sales Tax Appellate Tribunal and they were dismissed by the Tribunal on September 4, 1982. These two tax revision cases are against the said common order of the Tribunal.
3. Mr. C. Natarajan, learned counsel appearing for the petitioner, contends that the partnership firm was dissolved on December 10, 1974 and thereafter there was no relationship of agency between erstwhile partners. Argues, Mr. Natarajan that a proper compliance with the provisions of the Act, requires that each of quondam partners should have been individually served with notice and also served with the assessment orders. According to him neither section 19A of the Act, nor rule 52 of the Tamil Nadu General Sales Tax Rules (hereinafter called "the TNGST Rules" detract from the necessity of serving each of the erstwhile partners. Inasmuch as the petitioner had not been served with the assessment orders, the contention is that he is entitled to file an appeal and the alleged delay reckoned from the date of the service on the other partners cannot be held against him. To elaborate the point Mr. Natarajan says that the fiction contemplated in section19-A of the Act can he extended only to a logical end and not beyond. The Legislature did mean to extend the fiction to the extent of holding that service on one erstwhile partner should he equated with the service on the other erstwhile partners and that limitation will start running from the date of service on one of the erstwhile partners even against the partners not served with the assessment orders. It is also contended that against an order of assessment made against a firm, every partner had a right to file an appeal. In any event a construction of the statute which avoids manifest injustice should be adopted and at least one appeal against the order of assessment should be allowed. Therefore it is contended that the orders of the Tribunal and the Appellate Assistant Commissioner are liable to be set aside and the appeals hear
