1974 (2) TMI 70 - HC - VAT and Sales Tax

Summary

Issues:
Validity of assessment orders on a dissolved firm under Central Sales Tax Act and Karnataka Sales Tax Act, retrospective effect of amendments, liability of ex-partners of dissolved firm, interpretation of procedural provisions under State and Central Acts.

Analysis:
The judgment dealt with three assessment orders under the Central Sales Tax Act on a dissolved firm, challenged in writ petitions. The court initially quashed the assessments as there was no provision for assessing a dissolved firm under the Karnataka Sales Tax Act. However, subsequent amendments validated assessments before June 9, 1969, and introduced a new section 15 in the Karnataka Sales Tax Act, making ex-partners liable for tax and penalties even after dissolution.

The amended section 15 held ex-partners jointly and severally liable for tax or penalties as if the firm had not dissolved. The retrospective application of the new section from October 1, 1957, meant assessments for 1960-61, 1961-62, and 1962-63 were revived. The court relied on a Full Bench decision supporting the enforcement of assessments without fresh orders against ex-partners of dissolved firms.

The petitioner argued against the State Government relying on the 1972 amendment to section 15, stating it was not in force during the enactment of relevant Central Sales Tax Act provisions. However, the court referenced a Division Bench decision affirming that future amendments to procedural provisions were adopted by the Parliament, allowing enforcement of assessments against ex-partners based on the retrospective effect of the amended section 15.

The court rejected the petitioner's contention, emphasizing the legal validation of assessments for the disputed years. It concluded that ex-partners of the dissolved firm were liable to pay the assessed amounts without the need for fresh assessment orders. Citing precedents and legislative intent, the court upheld the enforcement of assessments against the petitioner and dismissed the petitions, with no order as to costs.