GULATI, J. - (1.) THIS is a reference under section 11(1) of the U.P. Sales Tax Act read with section 9(3) of the Central Sales Tax Act submitted by the Additional Revising Authority, Sales Tax, Varanasi, for the opinion of this court on the following two questions of law :- "(1) Whether the applicant-firm is entitled to obtain 'C' forms even when the firm has ceased to exist for their old purchases ? (2) Whether this firm is authorised for the issuance of 'C' forms for supplying them to the various parties having its old registration number ?"
(2.) IT appears that a partnership firm carried on business in kairana at Ballia. It was registered under the Central Sales Tax Act. On 6th December, 1967, one of its partners died and the firm was reconstituted by the remaining partners which continued the business in the firm name of M/s. Mahadeo Ram Ram Jatan Ram. At the time of the reconstitution of the firm the registration certificate in the name of the old firm as also the 'C' forms obtained in the name of the old firm which were lying unused were surrendered to the Sales Tax Officer. Later on, however, it was discovered that in respect of certain purchases already made by the old firm, 'C' forms had not been sent to the parties from whom the goods were purchased and as such 'C' forms were demanded by the parties concerned. Thereupon the partners of the old firm made an application to the Sales Tax Officer to reissue the requisite number of 'C' forms out of the forms which had been surrendered. This request was turned down by the Sales Tax Officer, and the Judge (Revisions) also, before whom the matter came up in revision, found himself unable to accede to the request. The Judge (Revisions) stated that hardship would be caused to the partners of the old firm but there is no provision under the Central Sales Tax Act which authorises the issuance of 'C' forms in the circumstances of the case. At the instance of the assessee the present reference has been made to this court. Under sub-section (1) of section 8 of the Central Sales Tax Act, tax is payable on inter-State sale at a concessional rate when such sales are made to a registered dealer, who furnishes to the selling dealer a declaration in accordance with sub-section (4) of section 8. In the absence of a declaration, the rate of sales tax is 10 per cent. The certificate contemplated by sub-section (4) of section 8 is to be filed in a prescribed form which under the rules is called form 'C'. It is clear that the old firm in the instant case which was a registered dealer had purchased certain goods from dealers in other States on the basis of its registration certificate, but had not supplied the requisite 'C' forms to the sellers. Had the firm not been reconstituted such 'C' forms would have been furnished in due course. Even after the reconstitution of the firm, 'C' forms which had previously been issued in the name of the old form could have been furnished to the selling dealers. There would have been no difficulty in that procedure. The difficulty has arisen because the 'C' forms issued in the name of the old firm were surrendered. The sales tax authorities formed the opinion that the 'C' forms could be issued to a registered dealer and inasmuch as the old firm had been dissolved, 'C' forms could be not issued in the name of the dissolved firm. It is true that the rules contemplated the issuance of 'C' forms to an existing registered dealer, but the difficulty which has arisen in the instant case is not unsurmountable. In the first place, the request which the partners of the erstwhile firm made was not for the issuance of fresh 'C' forms but only for the reissuance of the forms which had already been issued in the name of the old firm and which by mistake had been surrendered. There is no prohibition in the Act or in the Rules against reissuance of forms which have been surrendered by mistake. Secondly, there is in the U.P. Sales Tax Act a provision in section 3-C which deals with the liability to tax of a dissolved firm. This section provides that where a dealer is a firm and such firm has discontinued business, tax including penalty, if any, payable under this Act by such firm up to the date of discontinuance may be passed and taxed as if no discontinuance had taken place, and further that every person, who was, at the time of such discontinuance, a partner of such firm shall, notwithstanding such discontinuance, be liable severally and jointly for the payment of the tax assessed and penalty imposed and payable by such firm whether such assessment is made or penalty is imposed prior to or after such discontinuance, and the provisions of the Act shall apply as if every such person or partner were himself a dealer. According to the explanation occurring at the end of this section, the dissolution or reconstitution of a firm shall be deemed to be discontinuance of the business within the meaning of this section. The effect of this section is that by a legal fiction a firm which has discontinued business or which has been dissolved shall be deemed to be an existing firm for the purposes of assessment of tax and penalty in respect of its turnover prior to the date of dissolution or discontinuance of business. When the assessment of such a firm takes place, the firm in fact ceases to exist, but as a result of the legal fiction enacted in this provision, the firm is deemed to be in existence and its dissolution has to be ignored. It follows, therefore, that a dissolved firm can also ask for the issuance of 'C' forms on the basis of its registration certificate and even can ask for registration, if it had not been previously registered. The assessment itself had to be made in the name of the firm in the like manner in which it would have been made had the firm not been dissolved.
(3.) IN C. A. Abraham v. Income-tax Officer, Kottayam ([1961] 41 I.T.R. 425), the Supreme Court had to interpret section 44 of the Income-tax Act of 1922 which at the material time stood as follows : "Where any business ....... carried on by a firm ......... has been discontinued ......... every person who was at the time of such discontinuance ........ a partner of such firm shall in respect of the income, profits and gains of the firm be jointly and severally liable to assessment under Chapter IV and for the amount of tax payable and all the provisions of Chapter IV shall, so far as may be, apply to any such assessment." ;