1968 (8) TMI 171 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Is the assessment barred by limitation?
2. Is the Tribunal bound to decide the question of limitation, whether it be urged or not?
3. Is the assessment made on the firm after its dissolution permissible?

Detailed Analysis:

1. Is the assessment barred by limitation?
The petitioner argued that the assessments for 1953-54 and 1954-55 were made on October 28, 1959, beyond the prescribed period, thus barred by limitation. The Tribunal initially noted that the question of limitation was not pressed by the petitioner's counsel. The High Court clarified that under the Hyderabad General Sales Tax Act, there was no time limit for original assessments. The proviso to section 41 of the Andhra Pradesh General Sales Tax Act saved the right of the State to assess without a time limit, thus dismissing the limitation argument. This view was supported by precedent cases, including Swastik Oil Mills Ltd. v. H.B. Munshi, which upheld the continuity of assessment rights under repealed acts.

2. Is the Tribunal bound to decide the question of limitation, whether it be urged or not?
The Tribunal did not address the limitation issue as it was expressly given up by the petitioner's counsel. The High Court held that when a point of law is expressly abandoned by the counsel, it cannot be contended that the Tribunal failed to decide the question of law. Hence, the Tribunal was not bound to decide the limitation issue once it was not pressed.

3. Is the assessment made on the firm after its dissolution permissible?
The petitioner contended that assessments made on a dissolved firm were invalid as per Supreme Court rulings in State of Punjab v. Jullundur Vegetables Syndicate and Additional Tahsildar v. Gendalal. However, the Andhra Pradesh General Sales Tax (Amendment) Act, 1968, introduced section 15-B, which retroactively validated assessments on dissolved firms. Thus, the High Court found that the assessments were permissible under the amended law.

Writ Petitions:
The writ petitions challenged the demand notices served on Mohanlal for tax arrears. Mohanlal claimed he was unaware of the assessments and that the firm had dissolved, thus the assessments were invalid. The counter-affidavit by the Commercial Tax Officer denied any notification of the firm's dissolution and stated that assessments were made following due process. The High Court upheld the assessments, noting that the firm was represented throughout the proceedings and that the dissolution was not intimated to the authorities. The Court also dismissed the plea for separate notices to each partner, affirming that notice to the managing partner sufficed.

Conclusion:
Both tax revision cases and writ petitions were dismissed. The High Court found no merit in the limitation argument, upheld the validity of assessments on dissolved firms under the amended law, and confirmed that proper procedures were followed in serving notices and conducting assessments. The writ petitions were dismissed, with costs awarded in Writ Petition No. 718 of 1966 and no costs in Writ Petition No. 719 of 1966.