Prosecution of individual partner of a firm held unsustainable.

This is a revision by the first accused in C.C. No. 211 of 1950 on the file of the Sub-Divisional Magistrate of Srikakulam. The prosecution is for an offence under section 15(b) of the Madras General Salesh Tax Act. The first accused, the second accused and another who is the son of the first accused are partners of a firm called Behara Latchanna Patnaick and Sons and Kallepalli Chiranjeevi. The firm was doing business for a very long time and the notice of assessment for the year 1946-47 was served on them on 12th July, 1949. Notice was served on Satyanarayana the son of B.L. Patnaick. Then the first accused and his son Satyanarayna who themselves constituted a separate firm presented a petition to the Commercial Tax Officer, Vishakapatnam admitting the liability and paying half the amount assessed and stated therein that the firm was dissolved on 1st October, 1948, and asked for the notice to be issued for the half share of the other partner to the second accused in the case. For failure to pay the taxes assessed a complaint was laid against the first and the second accused and they were convicted for non-payment of the tax.

Mr. Dikshitulu appearing for the petitioner contends that it is not the firm that has been prosecuted but that two of the partners of the firm are individually prosecuted for non-payment of the tax and such a prosecution cannot lie against them individually. In support of his contention he has relied upon the ruling of Subba Rao, J., in the Public Prosecutor v. Jacob Nadar1. In that case there were two partners but one of them alone was prosecuted for non-payment of the tax. Subba Rao, J., observed that though Jacob might be made liable if the proper procedure had been followed as a partner of the firm on that question he did not express his final opinion. Jacob was not liable as the firm was the person who made the default and who should have been prosecuted. Earlier he observed:

“Asa defaulter in this case is the firm, the firm should have been prosecuted for contravening the provisions of section 15.”

He also referred to the judgment of Chandrasekhara Ayyar, J., in Akula Paddayya Naidu, In re2, on which strong reliance is placed by the learned Public Prosecutor. In the case of Akula Paddayya Naidu, In re2, there were two partners and both of them were prosecuted. Subba Rao, J., referring to this case has observed:

“As both the partners were made accused, the learned Judge presumably treated the firm as accused and convicted both the partners who constituted the firm.”

He further added that in the case before him he could not treat the firm as the accused as one of the accused only was prosecuted in his personal capacity. These observations will apply with equal force to the facts of this case. Behara Latchanna Patnaick and Sons constituted one firm and this firm along with Kallepalli Chiranjeevi constituted another firm which is now assessed and on which tax is levied. To prosecute this firm there are undoubtedly three partners namely the first accused in this case, his son Satyanarayana who is not an accused before the Court and the other partner, Kallepalli Chiranjeevi (second accused). If all the three partners had been made accused, then it could well be contended that the firm had been prosecuted. But the omission of one of the partners renders it difficult to say that the firm as such is prosecuted though every partner individually is liable to pay the tax. On the facts of this case, I must hold that it is not the firm Behara Latchanna Patnaick and Sons and Sri Kallepalli Chiranjeevi that is prosecuted but only two of the partners of the firm, namely the first and second accused, are prosecuted in their individual capacity. Such a prosecution cannot lie within the ruling of Subba Rao, J., in the Public Prosecutor v. Jacob Nadar1. I must therefore set aside the conviction and sentence of the petitioner herein who is the first accused. The second accused has not preferred any revision. Under s