1984 (7) TMI 342 - HC - VAT and Sales Tax

Summary

Issues: Validity of refusal to rectify assessment order under section 25-A of Karnataka Sales Tax Act.

The judgment of the Court, delivered by JAGANNATHA SHETTY, J., pertains to revision petitions challenging the assessing authority's refusal to rectify an assessment order under section 25-A of the Karnataka Sales Tax Act. The petitioner, a partner in a dissolved firm, contested an ex parte assessment order issued by the assessing officer. The petitioner argued that no proposition notice was served on him before the assessment, leading to alleged errors in the assessment order. The assessing authority rejected the petitioner's request for rectification, stating that the notice served on the other partner was sufficient. The petitioner's subsequent appeals were also unsuccessful, with the Karnataka Appellate Tribunal opining that notice to one partner sufficed and the absence of a proposition notice did not warrant rectification under section 25-A.

The petitioner's counsel contended that individual notices should have been served on each partner post-dissolution, citing a Supreme Court decision. The counsel relied on the case of Income-tax Officer v. Mrs. A. Sattler, where it was held that assessment without notice to all partners post-dissolution is not binding. The Government Advocate highlighted Supreme Court decisions on discontinued associations and dissolved firms' liability for assessment, emphasizing the continuity in assessment proceedings despite dissolution.

The Court referenced section 44 of the Income-tax Act, 1922, which is akin to rule 43 of the Karnataka Sales Tax Rules, emphasizing joint and several liability of partners post-dissolution. The Court noted the applicability of section 15(2) of the Karnataka Sales Tax Act, which mandates assessment as if no dissolution occurred. The Court found that notice to one partner sufficed for assessment of dissolved firms, aligning with the Supreme Court's precedent in Raja Reddy Mallaram's case. The Court also cited a local decision supporting notice service on any partner for tax assessment post-dissolution.

In conclusion, the Court held that the assessing authority was not at fault for refusing to rectify the assessment orders. The petitions were dismissed, and no costs were awarded. The Court's decision was guided by the precedence of larger Bench judgments, emphasizing adherence to the law's continuity in assessment proceedings despite firm dissolution.