9911796707
TMI Blog1959 (12) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional Collector of Sales Tax who heard the revision application against the said dismissal order also confirmed the order of the Assistant Collector. The facts of the case are as under: 3.. One Maganlal Talakshi was carrying on a business in the name of R. Maganlal & Co. The business was of selling bidis and Messrs R. Maganlal Co. had the sole agency to sell bidis manufactured by Messrs Thakur Savendekar & Co. The firm of Messrs R. Maganlal & Co. was registered as a dealer under registration certificate No. 10K 447. At the time when this application was made, Maganlal Talakshi was carrying on, business with one Kantilal Maganlal as his partner, but it is understood that Kantilal Maganlal left the partnership soon after the firm was reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice of demand against the applicant. It is urged that the amount was due from the firm, when it was a proprietary concern of Maganlal Talakshi and the applicant is not liable for its debts on any account either under the Partnership Act or the Sales Tax Act. 6.. It may be that the liability of a partner for the debts of a firm is confined to the time while he is a partner under the Indian Partnership Act, but it is not so under the Sales Tax Act. If, therefore, liability can be fastened under the Sales Tax Act reference to the Partnership Act becomes irrelevant. It is also stated that section 25, under which the information was given to the Sales Tax Officer, about the change in the partnership, was merely procedural and that secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to a new partnership under section 26(1), and the transferee, therefore, becomes liable to pay the tax in respect of such business remaining unpaid at the time of the transfer as if he were the dealer liable to pay such tax. The fact that in this matter the Sales Tax Officer did not take any action on the information supplied under section 25 cannot affect the legal liability created by the Sales Tax Act in the circumstances of the case. 10.. In support of his argument, Mr. Patel has cited the case of Rameshwar Dass v. Excise and Taxation Commissioner, Pepsu, Patiala and Others[1959] 10 S.T.C. 218. In that case there was a syndicate which was registered as a dealer. The syndicate had some associations as its members. These associations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the said section regarding penalty. This was conceded by Mr. Chaudhari. 12.. Now the only point that remains to be considered is whether a partner is liable for the tax dues of the firm. In suport of his argument that a partner is not liable for the tax liability of the firm Mr. Patel has cited the case of Lalji v. The Assistant Commissioner, Sales Tax, Raipur[1958] 9 S.T.C. 571. In that case it was held that where the department only assessed the firm, the arrears of tax are, in the first instance, recoverable from its assets. Until the assets are realised or cannot be found, the action of the taxing authorities to try to realise the amounts of tax from the partners personally is premature. Their Lordships have further observed, "We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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