9911796707
TMI Blog1970 (12) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... arch, 1961, and 31st March, 1962. The validity of these assessment orders was challenged by the petitioner in this court in Writ Petitions Nos. 246 to 248 of 1966, on the ground that the respondent had no power to assess a dissolved firm. This court, perhaps, for want of requisite evidence, while allowing those petitions, issued the following directions: "(1) The officer will call for and examine the deed of partnership on the basis of which three persons were trading as partners during the three relevant years according to the case of the petitioner, and on the basis thereof and on such further enquiry as he may find it necessary to conduct, decide whether the three persons, S.B. Navalgi and his two sons R.S. Navalgi and S.S. Navalgi, were trading as partners during the three years ending 31st March, 1960, 1961 and 1962. The petitioner is directed to produce the partnership deed before the officer when called upon to do so; (2) If the officer finds that there was no such partnership but that the trade was throughout being conducted by the individual S.B. Navalgi, then the assessment orders dated 30th November, 1962, impugned in these writ petitions shall stand declared inopera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment orders dated 30th November, 1962, made on the firm M/s. N.B. Navalgi, as inoperative and ineffective, if the deed of partnership did not contain any clause preventing the dissolution under section 42(c) of the Partnership Act, since admittedly, there is no such clause, the reassessment orders dated 23rd January, 1969, made by the respondent are ex facie without jurisdiction and are liable to be set aside. 5.. The contention of the learned counsel, in our opinion, is well founded. The learned High Court Government Pleader appearing for the respondent did not rightly support the conclusion of the respondent that the partnership deed contains a clause preventing dissolution under section 42(c). When there is no such clause, para. 3 of the order of this court becomes operative and consequently, the assessment orders dated 30th November, 1962, stand declared inoperative and ineffective. When para. 3 of the order becomes operative, the respondent had no jurisdiction to proceed under para. 4. The learned High Court Government Pleader however contended that the original orders of assessments dated 30th November, 1962, despite the declaration of this court as being inoperati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the assessment of the sales tax on a dissolved firm was not authorised by law. The latter part of the section positively says that the sales tax so levied, assessed or collected shall be deemed to have been validly levied, assessed and collected in accordance with law. Certain consequences follow from these savings which are to be found in clauses (a) to (c). Clause (a) again a deeming clause, directs that all acts, proceedings or things done or taken by any authority, officer or person in connection with the levy, assessment or collection of such sales tax shall, for all purposes, be deemed to be and to have always been, done or taken in accordance with law. Clause (b) bars any suit or other proceeding for refund of tax so paid, and clause (c) says that no court shall enforce any decree or order directing the refund of any tax so paid. 7.. The object of the above section is the validation of the assessments made on dissolved firms and other entities about which we are not concerned, notwithstanding anything contained in any judgment, decree or order of any court. It is well established that the Legislature can make retrospective law validating invalid assessments, but no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said to take place effectively. The most important condition, of course, is that the Legislature must possess the power to impose the tax, for, if it does not, the action must ever remain ineffective and illegal. Granted legislative competence, it is not sufficient to declare merely that the decision of the court shall not bind for that is tantamount to reversing the decision in exercise of judicial power which the Legislature does not possess or exercise. A court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. Ordinarily, a court holds a tax to be invalidly imposed because the power to tax is wanting or the statute or the rules or both are invalid or do not sufficiently create the jurisdiction. Validation of a tax so declared illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed and the tax thus made legal. Sometimes, this is done by providing for jurisdiction where jurisdiction had not been properly invested before. Sometimes, this is done by re-enacting retrospectively a valid and legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rescription as to limitation contemplated by the section, and that, in view of this, section 7 fails to validate the reassessments. Upholding those contentions, the High Court allowed the writ petition and quashed the assessments. In the appeal preferred by the State of Tamil Nadu, the Supreme Court affirmed the decision of the High Court of Madras, observing that section 7 of the Madras Entertainments Tax (Amendment) Act, 1966, was invalid in so far as it attempts to validate invalid assessment without removing the basis of its invalidity. 12.. The case before us falls, in our opinion, within the rule laid down in the above decisions. This court in the previous writ petitions declared the assessment orders made on the dissolved firm as invalid and ineffective, as the Act contained no provision authorising such assessments. The State Legislature by enacting section 24 of the amending Act, has declared that those assessment orders, notwithstanding the declaration of any court, must be held to be valid. The Legislature has not removed the cause of its ineffectiveness or supplied power to assess the dissolved firm at the time when the said assessment orders were made. A court's deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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