1985 (5) TMI 212 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to assessment orders under the Karnataka Sales Tax Act for the years 1972-73 and 1973-74 due to dissolution of a partnership firm without proper notice to ex-partners.

Analysis:
The petitioner, an ex-partner of a dissolved partnership firm, challenged assessment orders made by the Commercial Tax Officer without issuing notices to all ex-partners. The petitioner argued that assessments made post-dissolution without proper notice were illegal. The petitioner relied on a Division Bench ruling in S.M. Suligavi's case, emphasizing the necessity of serving notices on ex-partners for recovery proceedings.

The Government Advocate, citing P.K. Ahmed's case, contended that assessments on dissolved firms after serving notice on one ex-partner were valid. The Court referred to Rule 43(2) of the Karnataka Sales Tax Rules, allowing service of notices on any ex-partner of a dissolved firm. The judgment highlighted the Supreme Court's decision in Raja Reddy Mallaram and a Division Bench ruling in K.L. Parvathamma's case, supporting the service of notices on ex-partners post-dissolution.

The Court reconciled the conflicting rulings by stating that notice to all ex-partners was not mandatory for assessments on dissolved firms under the Karnataka Sales Tax Act. The judgment differentiated between recovery and assessment procedures, upholding the validity of assessments without individual notices to all ex-partners. The Court emphasized the applicability of Rule 43(2) in such cases and rejected the petitioner's contentions based on Suligavi's case.

In conclusion, the Court dismissed the writ petitions, affirming the validity of the assessment orders under the Karnataka Sales Tax Act. The judgment discharged the rule issued and stated that no costs were to be incurred.