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TMI Blog1980 (9) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... s the Central Act), vide registration certificate No. 473 granted to it under the Central Act. The said registration certificate prescribed quarterly returns of turnover for the firm. The firm and its branch were also registered as dealer under the Bengal Finance (Sales Tax) Act, 1941, as extended to the Union Territory of Delhi (hereinafter called the local Act), vide registration certificate No. 981-A granted to it under the local Act. The said registration certificate also prescribed quarterly returns of the turnover under section 10 of the local Act for the firm. The firm had been filing its quarterly returns and depositing the tax due on self-assessment basis with the Government both under the Central Act and the local Act. Before the notified authority/assessing authority concerned under the Central Act/local Act could accept the returns furnished by the firm as correct and complete or frame an assessment to determine the tax due from. the firm under section 9 of the Central Act read with section 11 of the local Act or enable it to adjust the amount paid along with the return against the tax determined to be due from it, the firm was dissolved with effect from 9th September ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returns towards the tax were never appropriated towards the revenue and that the amount in each case was lying with the sales tax department as money belonging to the partners of the firm for and on their behalf. By an identical order in each case, the applications were rejected on the ground that no assessment could be framed being a dissolved firm and without framing the assessment orders, no refund could accrue. The petitioners then filed a revision petition in each case before the Commissioner of Sales Tax. The revision petition was dismissed by the Assistant Commissioner (Sales Tax), New Delhi, by an identical order holding that the notified authority/ assessing authority was justified in rejecting the petitioners' application for refund of amount deposited along with the returns as the notified authority/assessing authority had not framed any assessment against the dissolved firm and the case was filed without making any assessment. The petitioners then filed a second revision in each case before the Financial Commissioner, Delhi Administration, Delhi. Before the Financial Commissioner, the petitioners urged the following pleas: 1.. That the order dated 31st March, 1970, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h September, 1969, had been executed by all the partners inter se and they had voluntarily submitted to the dissolution, that the assets and liabilities had been actually divided as per the deed of dissolution, that there was no closing stock left with the firm at the time of the dissolution of the firm, that the firm had not operated any bank account after the dissolution and the account standing to the credit to the partnership firm had been divided amongst the partners, that the premises in which the firm was conducting business had been taken over by M/s. Chetan Dass Company separately registered with the department and that above all one of the partners Shri Chetan Dass had died in the meanwhile. The factum of the dissolution of the firm and the finding recorded by the notified authority/assessing authority is not questioned by any of the parties before me. Except in one case for the year 1965-66 in which the notice in the prescribed form S.T. XIV under section 11 read with section 14 of the local Act was issued on 29th November, 1966, in all other cases, the notice in the prescribed form S.T. XIV was issued after 9th September, 1969. In all the cases, however, the notified au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expression 'firm' in substitution of the word 'dealer', it will be apparent that a firm is an independent assessable unit for the purposes of the Act. Indeed, a firm has been given the same status under the Act as is given to it under the Income-tax Act. Under section 3 of the Income-tax Act also a 'firm' is treated as a unit of assessment and as a distinct assessable entity. Though under the partnership law a firm is not a legal entity but only consists of individual partners for the time being, for tax law, income-tax as well as sales tax, it is a legal entity. If that be so, on dissolution, the firm ceases to be a legal entity. Thereafter, on principle, unless there is a statutory provision permitting the assessment of a dissolved firm, there is no longer any scope for assessing the firm which ceased to have a legal existence. As in the present case, admittedly, the firm was dissolved before the order of assessment was made, the said order was bad. In this context as we have stated earlier, there cannot be a distinction on principle between an assessment made on a firm under a proceeding initiated before the dissolution and that made in a proceeding started after the dissoluti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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