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TMI Blog1973 (10) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the Madhya Pradesh General Sales Tax Act, 1958, retrospectively so as to set at naught the Supreme Court decision. This question arose on the following facts. There were two periods of assessment, that is, from 22nd October, 1949, to 9th November, 1950, and from 10th November, 1950, to 30th November, 1951. The sales tax authorities assessed the petitioner to sales tax and the matter was ultimately decided by their Lordships of the Supreme Court in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax[1963] 14 S.T.C. 976 (S.C.). Thereafter, the State Legislature passed the Madhya Pradesh General Sales Tax (Second Amendment) Act, 1964 (Act No. 20 of 1964) and by section 7 of the Amendment Act, a new section 18-A was inserted retrospectively, as section 21(2) of the Amendment Act provided that the amendment made by section 7 thereof shall be deemed to have formed part of the principal Act from the commencement thereof. Subsequently, another Amendment Act was also passed, viz., the Madhya Pradesh General Sales Tax (Amendment and Validation) Act, 1967 (Act No. 23 of 1967). It is the contention of the petitioner in this writ petition that the State Legislature could not ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et at naught the Supreme Court decision between the same parties which is reported in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax[1963] 14 S.T.C. 976 (S.C.). This action of the State Legislature is challenged as unconstitutional on two grounds, namely, that the principle of res judicata being applicable, the State Legislature could not nullify a decision of the Supreme Court and, secondly, as article 141 of the Constitution of India provides that the law declared by the Supreme Court shall be the law of the land, the State Legislature could not nullify that declaration of the Supreme Court. In the present case, we are not concerned with the M.P. General Sales Tax (Amendment and Validation) Act, 1967, which amended other sections; but we may be concerned with section 10 of the said Act which amended section 52 of the principal Act relating to the period of five years. 4.. Learned counsel for the petitioner invited attention to the pronouncements of their Lordships of the Supreme Court in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax[1963] 14 S.T.C. 976 (S.C.)., Satyadhan v. Smt. Deorajin DebiA.I.R. 1960 S.C. 941., Official Assignee v. H. Basavanna A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it cannot declare ineffective a law declared by the Supreme Court, although it may have power to amend an enactment retrospectively. That would be the effect of article 141 of the Constitution of India. Further on, their Lordships found that although the M.P. Koyala Upkar (Manyatakaran) Adhiniyam, 1964, purported to declare the law validating a cess, section 51 of the C.P. Local Self-Government Act, 1920, was absolutely untouched and the same had not been amended. In that view, their Lordships declared section 3 of the M.P. Koyala Upkar (Manyatakaran) Adhiniyam, 1964, ineffective inasmuch as it could not be deemed to have amended section 51(2) of the C.P. Local Self-Government Act, 1920. That case, in our opinion, will clearly be distinguishable. If the Legislature had amended section 51(2) of the C.P. Local Self-Government Act, 1920, retrospectively, such a law would probably have been upheld by their Lordships of the Supreme Court. 6. In this connection we might advert to the pronouncement of their Lordships of the Supreme Court in the following cases, viz., State of Kerala v. Joseph and Co.[1970] 25 S.T.C. 483 (S.C.)., Hira Lal Rattan Lal v. Sales Tax Officer[1973] 31 S.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .' 21.. Certain amendments made by this Act to have retrospective effect.(1) Amendment made by section 2 shall be deemed to have come into force with effect from the 15th day of August, 1962. (2) Amendments made by section 7 and clauses (a) and (d) of section 9 shall be deemed to have formed part of the principal Act from the commencement thereof." The effect of the said sections was that section 18-A of Amendment Act No. 20 of 1964 will be deemed to have been inserted retrospectively right from the commencement of the principal Act. 8.. Subsequently, the M.P. General Sales Tax (Amendment and Validation) Act, 1967, by section 10, amended section 52 of the principal Act. Section 10 is as follows: "10. Amendment of section 52.-After sub-section (1) of section 52 of the principal Act, the following sub-section shall be inserted, namely: '(1-a) Notwithstanding anything contained in sub-section (1) a dealer registered or licensed under any of the repealed Acts who has not been assessed to tax for any period prior to the commencement of this Act shall be assessed to tax in accordance with the provisions of the repealed Acts as if this Act had not been passed, subject however to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mily firm transferred its assets and liabilities to the partnership-firm except the liability for taxes, that is, income-tax and sales tax. However, such an agreement between the transferor and the transferee will certainly not be binding on the taxing authorities; but the taxing authorities will be governed by the statutory provisions only. 11.. The amount due from the transferor-firm was Rs. 5,525. The taxing authorities started proceedings against the transferee-firm by issuing a notice dated 16th March, 1971 (petitioner's annexure A-1), demanding the payment of the amount from the transferee-firm. Hence this writ petition. We have already indicated that the taxing authorities will not be bound by any agreement between the transferor and the transferee firms, but they will certainly be bound by the statutory provisions. 12.. Before considering the instant question we may take note of the fact as to how the petitioner-firm has been changing its legal identity. Originally, when there was a joint Hindu family firm, two brothers, viz., Ghanshyamdas and Rameshchandra, formed that firm as members of the joint Hindu family. That deed, however, is not on record. Subsequently, by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the part of his business which is not so transferred, as if the goods have been sold by him, unless the tax on such goods is leviable on the last sale. (3) Where any goods have already been subjected to tax under this Act, nothing contained in sub-section (1) or sub-section (2) shall render such goods liable to tax for the second time. (4) When a dealer is a firm or association of persons or a joint Hindu family and such firm, association or family has discontinued business- (a) the tax payable under this Act by such firm, association or family for the period up to the date of such discontinuance may be assessed and determined as if no such discontinuance had taken place; and (b) every person who was at the time of such discontinuance a partner of such firm or a member of such association or family shall, notwithstanding such discontinuance, be liable severally and jointly for the payment of the tax assessed as payable by such firm, association or family, whether such assessment is made prior to or after such discontinuance and, subject as aforesaid the provisions of this Act shall apply as if every such person or partner were himself a dealer: Provided that when it is fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -firm. In the present case, the period of sales tax due was relating to 17th February, 1950, to 31st January, 1951. In this connection we might advert to the following cases which would support the contention raised on behalf of the petitioner, namely, State of Bombay v. Morarji Padamsey[1956] 7 S.T.C. 704., Hatim Mahmood v. Assistant Commercial Tax Officer, Mount Road, Madras[1959] 10 S.T.C. 510. and Deputy Commercial Tax Officer v. Sha Sukraj Peerajee[1968] 21 S.T.C. 5 (S.C.). Therefore, we are of the opinion that the petition deserves to succeed partly. We, accordingly, quash the order dated 29th April, 1971 (petitioner's annexure A-3), as also the demand notice (petitioner's annexure A-4) partly, stating that although the liability of the members or partners of the transferee-firm is there, an attempt should be made to recover the amount from the members or partners of the transferorfirm in the first instance and, in the alternative, from the members or partners of the transferee-firm. To that extent, we would modify the said order and the notice and issue a writ of mandamus accordingly. Consequently, this petition succeeds partly and is allowed to the extent indicated above. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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