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TMI Blog1974 (10) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... ness?" The material facts giving rise to this reference are that Messrs. Bharat Ice, Oil and Allied Industries was a Hindu undivided family firm. Kunj Behari Lal was the karta of the family. The firm was registered as a "dealer" under the U.P. Sales Tax Act, hereinafter referred to as the Act. The firm which started business in 1965 discontinued it in the year 1970. A sum of Rs. 24,106.64 was payable by the firm as arrears of sales tax as well as penalty for the assessment years 1968-69 to 1970-71. A part of this liability had been paid by the firm but a sum of Rs. 6,063.12 remained due. The sales tax authorities commenced recovery proceedings for the amount. In January, 1974, the Deputy Collector (Collection), Sales Tax, Moradabad, proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Each member of the family being himself a 'dealer' would be a defaulter as well. If each member was a defaulter, proceedings by way of arrest could well be taken against such a member." Since in Shiv Naraini's case(1) neither the decision of this court in Raja Ram's case(3) nor section 3-C(1)(b) of the Act had been noticed, the Bench before which the writ petition came up for hearing felt that it requires reconsideration. Hence this reference. The question referred to us must be considered with reference to the provisions of the Act unhampered by any decision concerned with the Income-tax Act because no provision exists in the Income-tax Act analogous to section 3-C, which will be adverted to presently. The word "dealer" is defined in se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess by a firm, association of persons or joint Hindu family even after such discontinuance against the firm, association or family, as the case might be, as if such firm, association or family were still continuing business. The discontinuance of business by a firm, association of persons or joint Hindu family may have been occasioned because of the firm, association of persons or joint Hindu family having come to an end. In such cases, proceedings for recovery of taxes assessed in accordance with section 3-C(1)(a) could not have been taken against the non-existent firm, association of persons or joint Hindu family because they would not be "dealers". Section 3-C(1)(b) is intended to meet such situations. On account of this provision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion, Raja Ram v. Tahsildar, HaldwaniCivil Misc. Writ No. 5121 of 1964 decided on 2nd March, 1965 (Allahabad High Court)., was correctly decided. We are in respectful disagreement with the decision of this court in Shiv Narain v. Sales Tax Officer[1972] 29 S.T.C. 150. , to the extent that it took a contrary view. For the reasons given above, our answer to the question referred is that: "The karta like any other member of a Hindu undivided family which has discontinued business could be arrested in the course of recovery proceedings for the realisation of arrears of sales tax and penalty due from the Hindu undivided family for the period prior to the discontinuance of its business, in case he is mentioned in the certificate contemplated by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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