Prataprai and Company, which was a partnership firm, was dissolved on 31st March, 1966. The petitioner was one of the partners of the quondam firm. On 31st March, 1966, a dissolution of the partnership was effected by a deed in writing and the scheme of dissolution was set out in the said instrument. For the year 1965-66 the firm was assessed to sales tax under the provisions of the Madras General Sales Tax Act, 1959. The assessing officer, after scrutinising the deed of dissolution, found that stocks of the value of Rs. 97, 790 were taken over by one of the partners in lieu of his share of the capital and assets of the quondam partnership firm. In that connection and consequent upon the accounting and adjustment as agreed to, the petitioner and another took over stocks of the value of Rs. 97, 790. In the return submitted by the quondam partnership firm for the assessment year in question, this turnover was not brought in, as, according to the petitioner, there was no transfer of property by one to the other for valuable consideration and, therefore, there was no sale of stocks of the value of Rs. 97, 790 from one set of partners to the other set of partners who took over such stocks. The assessing authority, in the course of assessment proceedings, was of the view that the quondam partnership firm which was a registered dealer, did not disclose in its returns the aforesaid turnover which, according to the assessing authority, represented the sale value of the goods sold to the petitioner and another. He, therefore, proposed to bring to tax such a turnover which was not brought into the returns, and also proposed to levy a penalty for the non-disclosure of the turnover in the usual course. Relying upon clause 5 in the deed, which stated that the stock-in-trade belonging to the partnership business was taken over by the petitioner and another at the book value, the assessing authority being of the view that such taking over constitutes a sale of stock by the partnership firm to two of its quondam partners and as rule 6(d) of the Madras General Sales Tax Rules, 1959, was not available to the petitioner to claim an exemption, rejected the objection regarding the inclusion of the turnover as above and brought it to tax. The petitioner unsuccessfully appealed to the Appellate Assistant Commissioner who confirmed the order of assessment including the levy of penalty. In the matter of the quantum of penalty, however, there was a reduction. It is as against the order of the Appellate Assistant Commissioner dated 25th February, 1967, the present writ petition has been filed. The claim of the petitioner is that the turnover which is relatable to transactions and adjustments made inter se between partners of a partnership firm in the course of dissolution does not reflect the ordinary elements which should be present in a sale, and there being no sale, no sales tax is leviable and a fortiori a penalty on the alleged escapement of turnover. It is contended that the instrument of partnership merely reflects a scheme of accounting and adjustment of the rights of partners and in order to implement such an agreed formula amongst the quondam partners of the firm if any stock is taken over or transferred at the book value from one set of partners of the firm to the other group of partners, it is only in the normal course of adjustment of rights of partnership assets and such transaction does not involve a transfer of property in the goods from one to the other and therefore not a sale. The learned Government Pleader appearing for the revenue contends to the contrary.What is dissolution of a partnership firm ? It is a technical expression. Under section 39 of the Partnership Act

"the dissolution of partnership between all the partners of a firm is called the dissolution of the firm." *

As partnership springs from a contract and as a contract could be discharged by mutual agreement, so also the jural relationship created by an agreeme