TMI Blog1967 (4) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... - - - Dated:- 12-4-1967 - SHAH J.C., SIKRI S.M. AND RAMASWAMI V. JJ. J.M. Thakur and B. Dutta, and J.B. Datachanji and O.C. Mathur of J.B. Dadachanji Co., for the respondent. B. Sen, Senior Advocate (R.P. Kapur for I.N. Shroff with him), for the appellants. -------------------------------------------------- The judgment of the Court was delivered by RAMASWAMI, J.- This appeal is brought, by special leave, from the judgment of the High Court of Madhya Pradesh dated October 1, 1964, in Miscellaneous Petition No. 107 of 1963 quashing three assessment orders dated May 31, 1956, May 6, 1957 and August 9, 1957, by grant of a writ under Article 226 of the Constitution. In or about 1947, the respondent entered int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed period of limitation. The High Court took the view that there was no substance in the first ground but the second ground relating to limitation was well-founded and the proceedings for assessment were barred by limitation because they were initiated long after the expiry of 3 years from the relevant quarters in the two assessment years. The High Court accordingly allowed the petition of the respondent and quashed the three assessment orders and also directed the appellants not to enforce the notices of demand dated March 15, 1963. On behalf of the appellants Mr. B. Sen put forward the argument that the High Court was wrong in holding that the assessment proceedings were barred by limitation and the interpretation put by the Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n these circumstances held by this Court that the order of assessment dated September 3. 1955, was void. It was pointed out that 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 a legal entity. On the dissolution of the firm it ceases to be a legal entity, and on principle, thereafter, unless there is a statutory provision permitting the assessment of a dissolved firm, there is no longer any scope for assessing the firm, which ceases to have legal existence. There cannot also be a distinction in principle between an assessment made on a firm under a proceeding initiated before its dissolution and one made in a procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. 1150., in which it was pointed out that it would not be right for the courts to ignore the principle of res judicata altogether in dealing with writ petitions filed by citizens alleging the contravention of their fundamental rights, and that consideration of public policy cannot be ignored in such cases. In the present case, however, the principle of res judicata is not applicable, because the previous judgment was against Lalji who was one of the partners of the said firm. The partnership was dissolved in the present case on September 13, 1952, and after the dissolution of the partnership there is no question of agency as between the partners and the decision in the previous writ petition against Lalji cannot be binding as regards the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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