1970 (2) TMI 99 - HC - VAT and Sales Tax

Summary

Issues:
1. Entitlement of a dissolved firm to obtain 'C' forms for old purchases.
2. Authorization for a dissolved firm to issue 'C' forms to parties with old registration number.

Analysis:
The judgment pertains to a reference under the U.P. Sales Tax Act and the Central Sales Tax Act regarding the entitlement of a dissolved firm to obtain 'C' forms for old purchases and the authorization to issue 'C' forms to parties with the old registration number. The case involved a partnership firm that was reconstituted after the death of a partner. The firm surrendered its old registration certificate and 'C' forms, leading to a dispute regarding the reissuance of 'C' forms for old purchases. The Sales Tax Officer and the Judge (Revisions) denied the request for reissuance, citing a lack of provision under the Central Sales Tax Act.

The judgment delves into the provisions of the Central Sales Tax Act, specifically highlighting the requirement of 'C' forms for concessional tax rates on inter-State sales to registered dealers. It notes that the old firm, if not dissolved, would have furnished 'C' forms for purchases made. The court emphasizes that the partners of the dissolved firm sought reissuance, not fresh issuance, of 'C' forms, which was not prohibited by the Act or Rules. Additionally, it references Section 3-C of the U.P. Sales Tax Act, which deals with the tax liability of dissolved firms, stating that a dissolved firm can request 'C' forms based on its registration certificate.

Drawing from the Supreme Court case of C.A. Abraham v. Income tax officer, the judgment underscores the continuity of assessment and tax liability even for dissolved firms. It discusses the applicability of Section 3-C of the U.P. Sales Tax Act to the Central Sales Tax Act proceedings, highlighting the liability of the erstwhile firm for penalty due to non-supply of 'C' forms. The court concludes that the dissolved firm should be treated as existing for assessment purposes, entitling it to obtain 'C' forms and maintain the validity of its registration certificate.

In the final analysis, the court answers both questions affirmatively in favor of the assessee, asserting the dissolved firm's entitlement to 'C' forms and the costs of the reference. The judgment clarifies the legal fiction surrounding dissolved firms' tax liabilities and underscores the continuity of assessment procedures even post-dissolution, ensuring compliance with tax regulations and penalties for non-compliance.