M VEERABADRA KONAR Vs. STATE OF MADRAS

JUDGEMENT

(1.) THE assessee was assessed for the year 1953-54 on a turnover of Rs. 2, 57, 092. Subsequently, it was discovered on a verification of the bank accounts that large amounts had been received by the assessee in the name of Sriranga Konar, Veerabadra Konar and Paramasivam. Veerabadra Konar is the assessee. Paramasivam was his partner in the partnership business covered by the original assessment. Sriranga Konar is said to have been an employee in the business. On the discovery that the business was in receipt of large amounts, a revision of the assessment was undertaken. Notice was served upon the assessee on 15th March, 1957. Beyond asking for time, the assessee did not explain the transactions. As the revision of the assessment would be barred by time by 31st March, 1957, the assessing authority declined to grant any further time and fixed the net turnover at Rs. 6, 57, 092, that is, by the addition of a sum of Rs. four lakhs. THE successive appeals to the Commercial Tax Officer and the Tribunal failed. Veerabadra Konar has now filed the present revision petition.

(2.) THE contentions that have been advanced by the learned counsel on behalf of the petitioner are that the firm was dissolved on 9th February, 1954, and intimation of dissolution was given to the Commercial Tax Authorities on 15th February, 1954 thereafter, it is contended, there could not be an assessment in the name of the partnership. THE notice under rule 17 was issued in the name of the partnership and served on the assessee only. THE arguments of the learned counsel is that the Act and the Rules thereunder contain no provision for making an assessment on a dissolved partnership and that therefore the assessment is wholly invalid. THE further contention is that the notice of the final assessment was served upon the assessee on 6th April, 1957, and that should be regarded as the date on which the order against him was made. If that is so, the assessment must be deemed to have been made beyond the three years from the close of the assessment year, and invalid on that ground as well. THEse contentions have now to be examined.Taking the second of these contentions first, it seems to us to be totally without substance. THE notice under rule 17 for revision of the assessment to bring to tax escaped turnover was issued on 9th March, 1957, and served on the assessee on 15th March, 1957, well within the period of three years from the close of the assessment year.

(3.) THE conclusion reached that these drafts related to the business and represented the turnover of the business of the firm was not really in dispute before the Appellate Tribunal. But a vague suggestion was put forward that the partners had individual business of their own and if any amendment of the assessment was called for, it should have been effected in relation to the individual business of each of the partners. That was not accepted by the Tribunal. It was stated before us, however, that the assessee Veerabadra Konar did not have any individual business of his own but that Paramasivam did have such an individual business, a position not controverted by the learned counsel for the department. THEre may arise different considerations in respect of the sum of Rs. 25, 108, which represented the value of the drafts in the name of Paramasivam. We shall deal with that separately. But in so far as the two remaining amounts are concerned, there is no doubt that they represent the turnover of the business of the assessee's partnership.In respect of these two latter amounts, the case of the assessee is that the partnership was dissolved with effect from 9th February, 1954, and that intimation of this had even been given to the department. On and after that date, it is claimed there could be no assessment on the partnership. THE learned counsel vehemently argues that the rules contain no provisions whereby the firm or the individual partners of a dissolved partnership could be assessed and made liable for sales tax on the lines which the Income-tax Act contains, and in this view he claims that there could be no assessment in respect of a dissolved business on either of the erstwhile partners of the business.