MEHTA, J. - (1.) THIS petition under Articles 226 and 227 of the Constitution raises an interesting question as to whether on the death of a dealer his heir or legal representative could be assessed to sales tax under the provisions of the Bombay Sales Tax Act, 1953, hereinafter referred to as "the Act", on the ground that he continued the deceased dealer's business.
(2.) THE short facts which have given rise to this petition are as under :- THE petitioner is the partnership firm of Messrs Champaklal and Sohanlal which carries on business of selling biris and cigarettes in Ahmedabad. Shivratan, the father of one of the partners, Champaklal, had migrated from Pakistan in 1947-48 and was carrying on business in biris, cigarettes etc. as a proprietor. He died in November, 1957, when Champaklal was aged about 13 or 14 years. Champaklal since 1958 continued this business in alleged partnership with Sohanlal. It appears that the premises of the business of the petitioner were raided on 18th August, 1963, as the petitioner was not registered and had not been assessed. THE respondent-Sales Tax Officer thereafter issued a notice at annexure A, dated 31st October/2nd November, 1963, to the said Champaklal Shivratan as partner of the petitioner-firm asking him to show cause why the petitioner-firm should not be assessed with effect from 1st April, 1954, as the said Champaklal's father's business was of more than Rs. 25,000 and as Champaklal was his legal heir and had continued the business of the said Shivratan after his death. THE said Champaklal in his reply to the said notice stated that he had no connection with his father's business. THEreafter the respondent issued another notice, dated 23rd March, 1965, at annexure B, again to Champaklal as partner of the petitioner-firm on the very same ground that he continued the business of his father after his father's death, which fact was admitted by him in his statement dated 18th June, 1963. THE notice asked Champaklal to show cause why the firm should not be assessed, taking the sales for the year 1953-54 as exceeding Rs. 25,000 with effect from 1st April, 1954. Again, the petitioner reiterated the original contention in the reply dated 31st August, 1965, denying all connections with the said Shivratan. Another reply was submitted on 6th October, 1965. THEreafter the respondent-Sales Tax Officer assessed the petitioner's firm from 1st April, 1954, on the total sales up to 31st December, 1959. By his order, dated 30th October, 1959. In pursuance of the said assessment order at annexure C, a demand notice was issued to the petitioner-firm for the recovery of the tax along with the penalty as assessed, which came to about Rs. 12,723. 52 P. THE petitioner challenges the said assessment order along with the notice of demand on the ground that there is no provision in the Act which would enable the respondent to assess an heir of a deceased dealer and also on the ground that no opportunity had been given to the petitioner to controvert all the materials which had been collected at his back. At the hearing Mr. Kaji confined his attack only to the first ground. THE respondent-Sales Tax Officer has filed his affidavit-in-reply, to which the petitioner has given a rejoinder. The main question which, therefore, arises in this petition is whether the respondent had jurisdiction to assess an heir or a legal representative of a deceased dealer under the Act of 1953. We would at the outset consider the various sections and the rules which would be material for considering this question. Section 2 (6) defines a dealer to mean any person who carries on the business of selling or buying goods in the pre-reorganisation State of Bombay, including the transferred territories, whether for commission, remuneration or otherwise and includes a State Government which carries on such business and any society, club or association which sells goods to or buys goods from its members. The charging section in the Act is section 5 which makes every dealer whose turnover exceeds the specified limit liable to pay tax under the Act on his turnover of sales and his turnover of purchases made on or after the appointed day. Section 11 (1) provides that no dealer shall, while being liable to pay tax under the Act, carry on business as a dealer unless he has applied for registration within such period as may be prescribed. Section 11 (2) provides for the application for registration. Section 11 (4) then provides that the prescribed authority may from time to time amend any certificate of registration after considering the information furnished under section 25 or otherwise received. Section 11 (6) provides that when - " (a) any business in respect of which a certificate has been granted under this section has been discontinued or transferred, or (b) in the case of a dealer, neither his turnover of sales nor his turnover of purchases has during any year exceeded the limits specified in sub-section (1) of section 5 and the dealer has applied in the prescribed manner for cancellation of his registration, the prescribed authority shall cancel the registration, with effect from the prescribed date. " Section 25 provides that if any dealer to whom the provisions of the Act applied : " (a) sells or otherwise disposes of his business or any part of his business, or effects or comes to know of any other change in the ownership of the business, or (b) discontinues his business or changes his place of business or opens a new place of business, or (c) changes the name or nature of his business or effects any change in the classes of goods sold by him, (d) enters into partnership in regard to his business, he shall, within the prescribed time, inform the prescribed authority accordingly; and where any such dealer dies, his legal representative or where any such dealer is a partnership firm and the partnership is dissolved, every person who was a partner thereof, shall in like manner, inform the said authority. "
(3.) THEN comes section 26, which is material for our purpose. It runs as under : " (1) When the ownership of the business of a dealer liable to pay the tax is entirely transferred, the transferor and the transferee shall jointly and severally be liable to pay any tax including penalty, if any, payable in respect of such business whether under the Bombay Sales Tax Act, 1946, the Bombay Sales Tax (No. 2) Ordinance, 1952, or this Act, and remaining unpaid at the time of the transfer and the transferee shall also be liable to pay tax on the sales or purchases of goods effected by him with effect from the date of such transfer and shall within thirty days of the transfer apply for registration unless he already holds a certificate of registration. (2) When a dealer liable to pay the tax transfers the ownership of a part of his business the transferor shall be liable to pay the tax in respect of the stock of goods transferred along with that part of his business, which is not so transferred, as if the goods have been sold by him, unless the transferee holds a certificate of registration or obtains it within the prescribed period. " The rest of the section is not material for our purpose. The relevant rules in relation to this section are to be found in the Bombay Sales Tax (Registration, Licensing and Authorization) Rules, 1954. Under rule 15 (3) when any dealer dies, his legal representative shall deliver the certificate of registration, licence or authorization held by the dealer, to the registering authority or officer issuing the licence or authorization, as the case may be, within 60 days of the death of the dealer. Under rule 18 (1) every dealer to whom the provisions of section 25 apply, shall within 30 days of the occurrence of any of the events mentioned in clause (a), (b), (c) or (d) of the said section send the information under the said section in writing together with his certificate of registration, licence and authorization, if any, to the registering authority. Under sub-section (2) when any such dealer dies, his legal representatives shall within 60 days of his death inform the registering authority about the date of the dealer's death and the names and addresses of his legal heirs.;