- (1.) THE applicant has been convicted under section 14 of the Sales Tax Act (hereinafter referred to as the Act) and was sentenced to pay a fine of Rs. 1,000 and in default to undergo R.I. for three months. The order was confirmed in appeal.
(2.) THE applicant is a partner and manager of the firm, M/s. Satya Prakash Rajesh Kumar, which was assessed to sales tax over Rs. 36,000 for the year 1967-68. He had not deposited the tax in spite of notice. He was, therefore, prosecuted under section 14 of the Act. The only point that has been argued before me in this case is that the prosecution of the applicant is illegal as the dealer was the firm itself and, as such, that firm should have been prosecuted. Learned counsel for the applicant has stated that there would have been no objection if all the partners of the firm, including the applicant, had been prosecuted. In support of this contention he has placed reliance on a case of the Madras High Court, Public Prosecutor v. K. Jacob Nadar ([1951] 2 S.T.C. 53; A.I.R. 1951 Mad. 886.). This authority, no doubt, supports the argument of the learned counsel for the applicant but it appears that in that case no notice at all had been served on K. Jacob, partner of the firm, who was prosecuted. It was further observed : "Though Jacob may be made liable, if the proper procedure had been followed, as a partner of the firm - on that question I do not express my final opinion - he is not liable as the firm is the person who made the default and who should have been prosecuted." This authority was considered by a single Judge of this court in the case of Hira Lal v. State ([1955] 6 S.T.C. 662; 1955 A.L.J. 813.). It was distinguished. The learned single Judge further observed that in case it was laid down in the case of Public Prosecutor v. K. Jacob Nadar ([1951] 2 S.T.C. 53; A.I.R. 1951 Mad. 886.) that either all the partners of the firm should be prosecuted or none at all, then he would express his respectful dissent.
(3.) THE learned counsel for the applicant has argued that the judgment in the case of Hira Lal v. State ([1955] 6 S.T.C. 662; 1955 A.L.J. 813.) was based on certain observations made in a Division Bench case, State v. Basdeo (A.I.R. 1951 All. 44.), which was a case under the Defence of India Rules and in which the observations were that a partnership-firm is not a juristic person. He has referred to a subsequent Supreme Court decision in the case of State of Punjab v. Jullundur Vegetables Syndicate ([1966] 17 S.T.C. 326 (S.C.)), in which it was observed : "Though under the partnership law a firm is not a legal entity but only consists of individual partners for the time being, for tax law, income-tax as well as sales tax, it is legal entity. If that be so, on dissolution, the firm ceases to be a legal entity." Their Lordships were not considering the case of prosecution of a partner or partners but they were considering the case of a dissolved firm for the purposes of assessment. A firm, even if it is a legal entity, cannot be prosecuted in the sense that it cannot be sentenced to imprisonment in case imprisonment was provided. Ultimately, the partners of the firm are to be prosecuted. Learned counsel for the applicant has himself argued that there would have been no objection if all the partners had been prosecuted. As noticed above, even in the case of Public Prosecutor v. K. Jacob Nadar ([1951] 2 S.T.C. 53; A.I.R. 1951 Mad. 886.), the question about the prosecution of K. Jacob as a partner was left open with the observation that he might have been made liable if the proper procedure had been followed as a partner of the firm.;