1991 (10) TMI 281 - HC - VAT and Sales Tax

Issues Involved:
1. Validity of service of notice on dissolved partnership firm.
2. Interpretation of Section 19A of the Tamil Nadu General Sales Tax Act and Rule 52(2) of the TNGST Rules.
3. Applicability of limitation period for filing appeals by partners of a dissolved firm.
4. Comparison with provisions under the Income-tax Act.

Issue-wise Detailed Analysis:

1. Validity of Service of Notice on Dissolved Partnership Firm:
The court examined whether the service of notice on one partner of a dissolved firm suffices for the entire firm. The firm, M/s. Ramakrishna and Company, was dissolved on December 10, 1974. For the assessment years 1973-74 and 1974-75, notices were served on various partners, but not all partners received them. The court held that under Rule 52(2) of the TNGST Rules, notice served on any one of the partners before dissolution is valid for the entire firm. This rule allows the service of notice, summons, or orders on any person who was a partner immediately before the dissolution.

2. Interpretation of Section 19A of the Tamil Nadu General Sales Tax Act and Rule 52(2) of the TNGST Rules:
Section 19A(a) of the Act maintains that tax payable by a firm up to the date of dissolution shall be assessed as if no dissolution occurred, and all provisions of the Act apply accordingly. Section 19A(b) states that every person who was a partner at the time of dissolution is jointly and severally liable for the tax, penalty, or other amounts payable by the firm, regardless of whether the assessment was made before or after dissolution. Rule 52(2) complements this by allowing service of notice on any partner of the dissolved firm. The court emphasized that the fiction created by Section 19A extends to the service of assessment orders, supporting the validity of notices served on individual partners.

3. Applicability of Limitation Period for Filing Appeals by Partners of a Dissolved Firm:
The petitioner argued that since he was not individually served with the assessment orders, the limitation period for filing an appeal should not apply to him. The court rejected this argument, stating that the limitation period starts from the date of service on any one of the partners. For the assessment years 1973-74 and 1974-75, the notices were served on partners Angamuthu and Jayaraman, respectively. Consequently, the appeals filed by the petitioner were deemed time-barred as they were filed well beyond the statutory period of 30 days from the service of the assessment orders on the other partners.

4. Comparison with Provisions under the Income-tax Act:
The court compared the provisions of the TNGST Act with those of the Income-tax Act, 1922, and 1961. Under the Income-tax Act, similar provisions allow for the assessment of dissolved firms and service of notices on any partner. The court cited cases such as Commissioner of Income-tax v. S.K. Bose and Commissioner of Income-tax v. Raja Reddy Mallaram, which upheld the validity of assessments and service of notices on any partner of a dissolved firm. These precedents reinforced the court's interpretation that service on one partner suffices and that the limitation period for appeals begins from such service.

Conclusion:
The court dismissed the tax revision cases, upholding the orders of the Tribunal and the Appellate Assistant Commissioner. The service of notice on any one of the partners of a dissolved firm is valid, and the limitation period for filing appeals starts from the date of such service. The appeals filed by the petitioner were thus barred by limitation. The judgment emphasizes the joint and several liability of partners in a dissolved firm and the sufficiency of serving notices on any one partner under the TNGST Rules.

← Previous Next →