TMI Blog1961 (1) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... respectively for the year 1954-55. The share of Benarsi Das was to be only one anna and six pies in a rupee. According to clause 3 of the deed, no partner was entitled to draw any salary or remuneration for the work done for the firm. For the assessment year 1955-56 an application was made for registration of the partnership firm under section 26A of the Indian Income Tax Act. The Income Tax Officer declined to grant registration on the ground that the object of the firm was unlawful and the partnership contract under which the firm was constituted was wholly void. The Appellate Assistant Commissioner sustained the order of the Income Tax Officer but the Tribunal formed the opinion that the partnership could not be said to be illegal and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer for approval and endorsed by him on the licence. The licensee shall, however, be responsible for all the acts and deeds of the person so approved. Rule 51 says that the licence may be granted to - (a) an individual; (b) * * * (c) * * * (d) a partnership or firm. According to rule 54, when a licence is granted to a partnership or firm not incorporated under any Act, all the individuals comprising the partnership or firm should be specified on the licence. Rule 55 provides that on the application in writing of all the original partners, a partner may at any time be added by authority competent to grant the licence, provided that he is otherwise eligible, in which case he shall be responsible for all obligations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 200.], where seven persons executed an instrument of partnership for carrying on arrack business and sought registration under section 26A. The arrack shops stood some in the name of the individuals and some in the names of the strangers. Following a Full Bench decision of the same court in Velu Padayachi v. Sivasooriam Pillai [1950] 1 M.L. 315, it was held that such a partnership arrangement either involved a transfer of the licence which was prohibited under rule 27 and punished under section 56 of the Abkari Act, or it was a breach of section 15 and punishable under section 55 because the unlicensed partner by himself, or through his agent, the other partner, sold without licenced. The Full Bench had also held that even though a partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... never submitted the names of his other partners to the Deputy Excise and Taxation Commissioner for being allowed to conduct sales in his behalf and for getting an endorsement made on his licence in respect of the same. Even if no transfer of the licence is involved with regard to which the view of the Tribunal may be correct, but it cannot be said that the object and purpose of the partnership was not illegal. The Tribunal relied on two Lahore cases, namely, 159 P.L.R. 1906 and Abdullah v. Allah Diya A.I.R. 1927 Lah. 333. In the latter case there is hardly any discussion which is relevant for our purposes but in the earlier case Chitty J. held that by entering into an agreement of partnership there was no transfer of the licence within t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e holds the licence. This is clear from condition (t) which must be contained in every licence along with the other conditions mentioned in rule 40. Of course, the licensee can obtain the permission of the appropriate authority for another person conducting sales on his behalf but unless that is done, it is only the licensee who can possess and sell opium and no other. Section 4 of the Act is equally clear on the point. Moreover, the public policy underlying the Act and the rules, as stated before, is that only an approved person specially licensed should be allowed to sell opium. Thus the decision of the Punjab Chief Court is quite distinguishable and it is not possible to see how the Tribunal could properly apply the law laid down there t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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