Liability to attachment and sale in execution of decree.

This writ petition raises the question, i.e., if a person happens to be a common partner in two firms, the State, while realising the arrears of sales tax due from one of the firms or from him as a partner thereof, is entitled to seize the movable properties of the other firm, of which also he is a partner, which firm, however, is not liable for the sales tax in question.

The brief facts are: the dealer, Azimunnissa and one Abdul Majid Sahib were carrying on business under the name and style of H.M.S. Kurshid &38; Co., from the year 1954 and the firm was dissolved in 1958. A sum of Rs. 16,724-39 nP. is due from this firm by way of sales tax for the assessment years, 1955-56 and 1956-57. The petitioner is carrying on business as a firm under the name and style of K.O. Mohamed Sulaiman &38; Co. This is a partnership concern which was started in 1951 and it is still carrying on business as a firm. Azimunissa, referred to earlier, is also a partner of the petitioner firm. For the realisation of the arrears of sales tax, Rs. 16,724-39 nP. aforesaid due and recoverable from Azimunnissa, as one of the partners of H.M. S. Kurshid &38; Co., the Department seized the Avery Weighing Machines and thousand hides and skins from the premises of petitioner, K.O. Mohamed Sulaiman &38; Co. It is not disputed that the aforesaid movables are the assets of the firm, K.O. Mohamed Sulaiman &38; Co. It is alleged that the weighing machines belong to the petitioner firm, while the hides and skins were held by it as bailee on behalf of the customers for export. For the purpose of the present enquiry that does not make any different. On representations made by the petitioner, the attachment of the Avery Machines has not been effected and they have been returned to the petitioner.

This writ petition has been filed questioning the right of the State to seize and take possession of specific items of assets (in the insant case, movables) belonging to the petitioner firm for realising the arrears of sales tax due from a dealer (in respect of his other business activities) on the ground that he happens to be a partner of the petitioner firm. Mr. V. K. Thiruvenkatachari, learned Counsel for the petitioner, contended that for realising the arrears of sales tax due from a dealer from out of his assets, the State can claim and assert only such rights as the dealer himself has over those assets and the State cannot claim any higher or superior right. He urged that so long as the partnership is a going concern and there has been no dissolution and settlement of accounts amongst the partners inter se, no partner can assert or predicate that he is the owner of any particular share in any particular asset, movable or immovable, and that it is only after a dissolution and settlement of accounts he may become the owner of any item of partnership property depending upon the terms of dissolution and settlement. Until dissolution the member of the partnership cannot claim a right to separate enjoyment and possession of any asset of the firm ; nor can he exclude or prevent the firm or the partners of the firm from enjoying and being in possession of the property on behalf of the firm. According to learned Counsel the result, therefore is that no person, whether State or any creditor, to whom moneys are due from an individual partner of a firm can, under the guise of recovering such moneys, take physical possession by seizure, thus excluding and preventing the partners of the firm from using and being in enjoyment and possession of the assets of the firm. Learned Counsel contends that the State may have a right to obtain a garnishee order or file a suit for dissolution and for taking of accounts for the purpose of working out the rights of the dealer with a view to obtain satisfaction of the claim out of any assets that may be allotted or allottable to the dealer on such dissolution and settlement of accounts, and that till that stage is reached, the State cannot possib