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TMI Blog2025 (3) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings of the department in light findings of the Hon'ble Apex Court in in Civil Appeal No. 5802 of 2005 in the matter of Shabina Abraham Ors. vs. Collector of Central Excise. I find that present appeal has been filed by Shri Nadeem Akhtar, claiming to be the Legal Heir of Late Hasmat Ullah. In this regard, it is conspicuously noted that there is no documentary evidence on record, i.e. order from any competent authority which would otherwise establish Shri Nadeem Akhtar is the Lgal Heir of Late Hasmat Ullah, and thus can defend this case. In the absence of that, in my opinion, there is no locus standi of Shree Nadeem Akhtar to challenge the impugned order or any of its findings." 3.1 Appellant was not present for hearing despite of notice. I have heard Smt Chitra Srivastava learned Authorised representative appearing for revenue. 4.1 I have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 I find that all the proceedings for demand of tax etc are alive till the proprietor is alive and will die with him, as has been held by Hon'ble Supreme Court in the case of M/s Shabina Abraham [2015 (322) E.L.T. 372 (S.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is nothing about dead persons in Section 11, Section 11 is limited only to recovery of sums that are due to the Government. The very opening words in Section 11 show that duty and other sums must first be payable to the Central Government under the Act or the rules. If such sums are not "payable" then the provisions of the Section do not get attracted at all. We have seen that the Act contains no machinery provisions for proceeding against a dead person's legal heirs, such as are contained in the Income Tax Act. Obviously, therefore, duty and other sums do not become "payable" without such machinery provisions. Further, Section 11 deals with modes of recovery of tax payable and does not deal with the subject matter at hand - namely machinery provisions for assessment in the hands of the estate of a dead person and, therefore, does not have much bearing on the matter in issue in the present case. The argument, therefore, as to the insertion of the proviso to Section 11 by an Amendment Act of 2004 so as to provide that if a person from whom some recoveries are due transfers his business to another person, then the excisable goods in the possession of the transferee can also be at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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." (at page 462) The Court went on to consider various High Court decisions and ultimately concluded as follows :- "Strong reliance was placed upon two judgments of this Court. This Court in C.A. Abraham v. Income-tax Officer, Kottayam, speaking through Shah, J., held that S. 44 of the Income-tax Act set up a machinery for assessing the tax liability of firms which have discontinued their business. This was followed by this Court again in Commissioner of Income-tax, Madras v. S.V. Angidi Chettiar. These two decisions are of no help to the Revenue in the present case. Indeed, in a sense they are against it. The Income-tax Act contains an express provision for assessing a dissolved firm. Indeed, but for that provision no assessment could be made under that Act on dissolved firms. For the foregoing reasons we hold that the High Court was right in holding that the assessment order on the dissolved firm could not be supported under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xistence a liability to pay sales-tax may, with a little ingenuity, evade its liability by the voluntary act of dissolution. The dissolution of a firm could therefore, be viewed differently from the death of an individual and the partners could be denied the advantage of their own wrong. But we do not want to strike this new path because the Jullundur case (supra) and the two cases which follow it have likened the dissolution of a firm to the death of an individual. Let us therefore, proceed to examine the other provisions of the 1953 Act." It then went on to quote Section 15(1) of the Bombay Sales Tax Act, 1953 and then arrived at this conclusion : "22. Section 15(1) contains an important clause that action thereunder can be taken by the Collector after giving a notice to the assessee under Section 14(3) of the Act within the prescribed period. Once such a notice is given, the Collector gets the jurisdiction to assess or re-assess the amount of tax due from the dealer and all the provisions of the Act "shall apply accordingly as if the notice were a notice served under" Section 14(3). Section 14(3) speaks of the power of the Collector to assess the amount of tax due from the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal, we have to construe the machinery provisions of those Acts. In accordance with the view taken in the cases cited above, the machinery sections ought to be construed so as to effectuate the charging sections. The construction which we have placed on the machinery provisions of the 1953 Act will give meaning and content to the charging sections, in the sense that our construction will effectuate the provision contained in the charging sections. The resourcefulness and ingenuity which go into well-timed dissolution of firms ought not to be allowed to be used as convenient instruments of tax evasion. As observed by Lord Dunedin in Whitney v. Commissioners of Inland Revenue : "A statute is designed to be workable, and the interpretation thereof by a Court should be to secure that object, unless crucial omission of clear direction makes that end unattainable." Far from there being any crucial omission or a clear direction in the present case which would make the end unattainable, the various provisions to which we have drawn attention leave it in no doubt that a dissolved firm can be assessed on its pre-dissolution turnover." 24. It is clear that on a conjoint reading of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solve the firm, an easy enough thing to do. Nothing, in fact, would be easier to evade a tax liability than to declare that the firm, admittedly liable to pay tax, has been dissolved. Section 19(3) of the 1959 Act not only makes clear what was necessarily implied in the 1953 Act, but it throws additional light on the true construction of the earlier law. But we thought it advisable to keep section 19(3) of the 1959 Act apart while construing the 1953 Act because it is the Courts, not the legislature, who have to construe the laws of the land authoritatively. As said in Craies on Statute Law : Except as a parliamentary exposition, subsequent Acts are not to be relied on as an aid to the construction of prior unambiguous Acts. (6th Ed., p. 146). The limited use which may be made of the language of Section 19(3) of the 1959 Act, though such a course is unnecessary, is for saying that it serves to throw some light on the Act of 1953, in case the argument is that the Act of 1953 is ambiguous. 36. Section 19(3) being quite clear and explicit, it is unnecessary to dwell on the other provisions of the Act of 1959 in order to show that a dissolved firm can be assessed under it. We may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be construed to make it workable can be met by stating that there is no charge to excise duty under the main charging provision of a dead person, which has been referred to while discussing Section 11A read with the definition of "assessee" earlier in this judgment. 28. Learned counsel for the revenue also relied upon the definition of a "person" under the General Clauses Act, 1897. Section 3(42) of the said Act defines "person" as under :- "(42) "Person" shall include any company or association or body of individuals whether incorporated or not." It will be noticed that this definition does not take us any further as it does not include legal representatives of persons who are since deceased. Equally, Section 6 of the Central Excises Act, which prescribes a procedure for registration of certain persons who are engaged in the process of production or manufacture of any specified goods mentioned in the schedule to the said Act does not throw any light on the question at hand as it says nothing about how a dead person's assessment is to continue after his death in respect of excise duty that may have escaped assessment. Also, the judgments cited on behalf of revenue, namel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich empowers the authorities to recover due from a deceased assessee by proceeding against his legal heirs. The way Section 11 and 11A are worded, it is amply clear, the legislature has consciously kept away the legal heirs from answering to liabilities under the Act." (at page 69) 31. The impugned judgment in the present case has referred to Ellis C. Reid's case but has not extracted the real ratio contained therein. It then goes on to say that this is a case of short-levy which has been noticed during the lifetime of the deceased and then goes on to state that equally therefore, legal representatives of a manufacturer who had paid excess duty would not by the self-same reasoning be able to claim such excess amount paid by the deceased. Neither of these reasons are reasons which refer to any provision of law. Apart from this, the High Court went into morality and said that the moral principle of unlawful enrichment would also apply and since the law will not permit this, the Act needs to be interpreted accordingly. We wholly disapprove of the approach of the High Court. It flies in the face of first principle when it comes to taxing statutes. It is therefore, necessary to reite ..... X X X X Extracts X X X X X X X X Extracts X X X X
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