1980 (9) TMI 266 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Jurisdiction of the notified authority/assessing authority to assess a dissolved firm.
2. Entitlement to refund of tax deposited by the dissolved firm.
3. Nature of the order dated 31st March, 1970, and whether it constitutes an assessment order.
4. Alternative remedies available to the petitioners.

Detailed Analysis:

1. Jurisdiction of the notified authority/assessing authority to assess a dissolved firm:

The core issue was whether the notified authority/assessing authority had the jurisdiction to assess a dissolved firm. The firm, M/s. Piara Ram Chetan Dass, was dissolved with effect from 9th September 1969. Notices for assessment were issued after the dissolution, except for one case pertaining to the year 1965-66. The Supreme Court's precedent in State of Punjab v. Jullundur Vegetables Syndicate [1966] 17 STC 326 (SC) was applied, which held that a dissolved firm cannot be assessed. The judgment emphasized that a firm, upon dissolution, loses its status as a legal entity, and unless explicitly provided by statute, no assessment can be made on a dissolved firm. Consequently, the notified authority/assessing authority did not assess the firm to any tax and filed the case accordingly.

2. Entitlement to refund of tax deposited by the dissolved firm:

The petitioners, as surviving partners and legal representatives, sought a refund of the tax deposited with the quarterly returns. They argued that since no assessment was made, the tax paid should be refundable under section 9 of the Central Act read with section 12 of the local Act. However, the authorities rejected the refund applications, reasoning that without an assessment order, no refund could accrue. The court upheld this view, stating that the refund under section 12 of the local Act applies to amounts paid in excess of the tax due. Since no assessment was made due to the dissolution, there was no basis to determine if the tax paid was in excess.

3. Nature of the order dated 31st March, 1970, and whether it constitutes an assessment order:

The petitioners contended that the order dated 31st March, 1970, should be considered an assessment order. The Financial Commissioner, however, inferred that it could not be an assessment order because the notified authority/assessing authority upheld the objections regarding jurisdiction and did not assess any tax. The court agreed with this inference, noting that the order did not determine any tax liability and merely filed the case, acknowledging the firm's dissolution.

4. Alternative remedies available to the petitioners:

The respondents argued that the petitioners did not avail themselves of the alternative and efficacious remedy under section 21(2) of the local Act. The court noted this objection but did not delve deeply into it, as the primary issues were resolved on the substantive grounds discussed above.

Conclusion:

The court concluded that the authorities correctly rejected the applications for refund, as the returns had to be taken as correct and complete due to the lack of jurisdiction to assess the dissolved firm. The writ petitions were dismissed, and no order as to costs was made due to the specific facts and circumstances of the case.

Petitions dismissed.