TMI Blog1967 (12) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner for escaped turnover for the years 1959-60, 1960-61, 1961-62 and 1962-63. The circumstances under which the writ petitions were filed, as revealed in the affidavit of the petitioner, are briefly the following: For the years mentioned above, assessments had already been completed in respect of the aforesaid business in vessels at Angeripalayam, the assessee being a joint Hindu family which had been in charge of the business for over 35 years running it as a joint family concern. The assessment in respect of the turnover of the business for the aforesaid years was made on the kartha of the joint family, which was registered as a dealer under the provisions of the Madras General Sales Tax Act, 1959. The members of the joint family ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided family which carries on the -business. If the business is a joint family concern, every member of the joint family has got an interest in it. On partition what was a coparcenery interest of the members of the joint family in the business, is converted into a joint interest; but there is no transfer as such of any interest in the business from the joint Hindu family to the divided coparceners, when a partition takes place. Thereafter when four of the members of the quondam joint family agreed, as they have done in this case, to form a partnership firm to carry on the business, they constitute a new dealer for the purpose of assessment to sales tax. What is proposed in the notices in the present case is to assess the partnership-firm in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson to the other. The section contains the words "transferred", "transferor" and "transferee". Such a conception of transfer, transferee and transferor will not apply when a joint Hindu family, which owns a business, effects a partition. In that case, there is no transfer of the business from the joint Hindu family to the divided coparceners. They had all along an interest in each and every item of the joint family property and, therefore, they cannot in the course of a partition obtain by transfer an interest which they had already possessed. The elements of a transfer do not exist in such a situation. Thereafter, when some of the coparceners who obtained the business on partition, unite to form a partnership to carry on the business, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act reads: "Where a person carrying on any business..................... has been succeeded in such capacity by another person........" The word "succeed" in section 26(2) of the Income-tax Act must be considered to be sufficiently wide to include not merely transfers but also cases where a previous dealer who owned the business is followed by another person, whether he obtains the business by transfer, inheritance or by any other method. If the Legislature in enacting section27 of the Madras General Sales Tax Act had used a similar language, instead of narrowing down the scope of the section exclusively to cases of transfer of ownership, it might be possible to rely upon that section for dealing with a situation like that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(4)(a) of the Madhya Pradesh enactment. But there is no such provision in the Madras General Sales Tax Act, enabling the members of a joint Hindu family to be assessed individually after the discontinuance or dissolution of the joint Hindu family. The Supreme Court in State of Punjab v. Jullundur Vegetables Syndicate[1966] 17 S.T.C. 326. dealt with a case where a firm was dissolved on July 11, 1953, and an intimation of the dissolution was sent to the department as required under section 16 of the relevant General Sales Tax Act. Prior to the dissolution. the firm was assessed to sales tax in respect of a period anterior to the dissolution. That assessment was quashed and thereafter a fresh assessment was made on the turnover of the firm, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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