9911796707
TMI Blog1981 (11) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... family. They carry on Kerana business. Ram Sewak, the plaintiff and Madan Lal, the first defendant were their servants and looked after the business. In Nov., 1953 Ram Charau decided to close the business. On the request of Ram Sewak and Madan Lal, Ram Charan handed over the business to them with the stock worth ₹ 40,125/- which was treated as a loan repayable with interest by them to Ram Charan. Ram Sewak and Madan Lal carried on the business as equal partners. It was decided that out of the profits one Anna in a rupee would be given for charity in favour of a temple of Rashik Siroman Ji Maharaj Biraj-man. The deity was impleaded as the second defendant in the suit through Ram Charan. The business continued in partnership till Nov., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds in the shop was ₹ 54, 117/-. 4. The suit was decreed. The preliminary decree declared and directed-- (1) that the firm was dissolved on 10th of Nov., 1958; (2) that Ram Sewak had not been turned out and that the business had been closed by mutual consent; (3) that no accounting was done; (4) that Ram Sewak, that is, the plaintiff himself, and not Madan Lal, that is, the first defendant, was the accounting party. It was also found that the keys of the safe used to remain with Ram Sewak and it was he who handled cash. 5. A Commissioner was appointed to take the accounts. He found that apart from the profits disclosed by the books, there were concealed profits amounting to ₹ 27,000/-or ₹ 29,000/-. According to the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be determined in that suit and further that in view of the admission of the parties that they had been keeping double set of account for evading payment of Income Tax and sales tax and that they had in fact evaded payment of taxes, the matter may be brought to the notice of the Income Tax and Sales Tax Authorities for such action as they may deem proper. The judgment of the lower appellate Court is dated 9th Sept., 1969. I do not know the result if any, of the direction made by the lower appellate Court for reporting the case to the Tax Authorities. But when I read the judgment I felt that this is one of those cases where the Court should have refused to entertain the suit on the ground of public policy, as it involves directing the recover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is trite that a void agreement cannot be enforced by a Court. 8. In the present case the parties had agreed to carry on business in partnership. There was no illegality in that. The carrying on of business for earning profit was also lawful. But the parties further agreed in the course of carrying on their business that they would conceal some part of their business activity and would not enter certain items in the books of account maintained by them, in order to evade payment of Income Tax and sales tax. It needs no showing that evasion of Income Tax and sales tax is forbidden by law and at any rate defeats the provision of the laws under which Income Tax and sales tax are levied and collected. The object of the agreement to carry o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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