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PETITIONER: MURARILAL MAHABIR PRASAD & ORS.

       Vs.

RESPONDENT: SHRI B. R. VAD & ORS.

DATE OF JUDGMENT05/09/1975

BENCH: CHANDRACHUD, Y.V. BENCH: CHANDRACHUD, Y.V. SARKARIA, RANJIT SINGH GUPTA, A.C.

CITATION:  1976 AIR  313            1976 SCR  (1) 689  CITATOR INFO :  F          1977 SC1360  (2)

ACT:      Bombay Sales  Tax Act,  1953, Sections  2(6),  5  11(5) 11(3), 15,  15A, 24,  26(3)(i), 26(3) (ii) and 35 and Bombay Sales Tax  Act, 1959,  Sections 2(11), 2(19), 19(3), 35, 35A and 62  and Bombay General Clauses Act. 1904, section 3(35)- Assessment and re-assessment to sales tax of pre-dissolution turnover of the dissolved firm-Assessment and re-assessment, if without jurisdiction.

HEADNOTE:      The first  appellant was a partnership firm constituted under a deed of partnership dated December 3, 1953. The firm was registered  as a  dealer under the Bombay Sales Tax Acts of 1953.  and 1959.  The firm  consisted  of  five  partners appellants two  to five  and one other who died in 1965. The firm used  to carry  on business  at Bombay as importers and commission  agents   and  also.   as  wholesale  dealers  in chemicals,  dyes  and  various  other  goods.  It  had  been assessed by  the Sales  Tax authorities form the period from July, 1953  to March  31, 1958  on the  basis of the returns filed by  it. On  November 10,  1960, the  Sales Tax officer seized a number of documents from the office of the firm. on May 20  1962, the  firm was  dissolved. On June 26, 1962 the Sales  Tax   officer  canceled   the   firm’s   registration certificate under  the Central  Sales Tax Act as well as the registration certificate,  authorisation and  licence  under the Bombay  Sales Tax Act which the partners of the firm had surrendered. On  November 20  1963, the  Sales  Tax  officer issued two  notices to  the firm, one asking for elucidation of certain  items in  the books  of accounts seized, and the other under sec. 15 of the 1953 Act calling upon the firm to show cause  why the  assessment already  made for the period April 1,  1957 to  March 31,  1958 should  not be opened. On August 31,  1965, the  Sales Tax officer passed five orders, all  against  the  dissolved  firm:  the  first  was  a  re- assessment order  for the  year April  1. 1957  to March 31, 1958 on  the ground  that certain sales and purchases during that period  had been  concealed and  the  other  four  were assessment orders  for subsequent  years covering the period from April  1, 1958  to March,  1961. on these five orders a

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total sum  of Rs. 6,56,365/47p. was found due from the firm. On October  22, 1965,  the demand  notices issued upon these assessment orders  all in  the name  of the  dissolved firm, were affixed  to the  premises in  which the  firm  had  its office before it was dissolved.      On November  24, 1965,  the  appellants  filed  a  writ petition in  the High Court of Bombay challenging the orders of re-assessment  and assessment on various grounds. In view of the  fact that  the appeals  filed by the firm before the Assistant Commissioner  of Sales  Tax were pending, the High Court did  not decide  the question  whether  the  Procedure prescribed by law was followed in the assessment proceedings and whether  the orders  were justified  on merits. The only question which  the High  Court considered  was whether  the impugned orders  were without  jurisdiction as  having  been passed against  a dissolved  firm.  By  its  judgment  dated December 8,  1969, the High Court rejected the contention of the firm  and held  that in view of the provisions contained in the  Bombay Sales  Tax Acts  of 1953  and  1959,  it  was permissible to assess a dissolved firm.      Dismissing the appeal by special leave, ^      HELD: (per Chandrachud and Sarkaria, JJ.)      (i) In  Jullunder Vegetables  Syndicate case,  [1966] 2 S.C.R. 457  this Court  held: (1) A dissolved firm cannot be assessed to  sales tax  unless the  statute under  which the assessment  is   made  authorises   the  assessment   either expressly  or   by  necessary   implication;  (2)   If,   by definition, a  firm is  a dealer  under an Act, it becomes a legal entity  or an  independent  assessable  unit  for  the purposes of that Act. If that be so, the firm ceases to be a legal entity on dissolution 690 and thereafter,  on principle it cannot be assessed to sales tax unless  the statute    so  authorises  expressly  or  by necessary implication.  (3) Neither  a provision requiring a dealer to  inform the  authorities if  it  discontinues  its business, nor  a provision  imposing  a  joint  and  several liability on  the dealer and its partners for the payment of tax, penalty  or any other amount due under the Act or rules can be  interpreted as  conferring jurisdiction  to assess a dissolved firm. and (4) In interpreting a fiscal statute the court cannot  proceed to make good the deficiencies, if any, in the statute: it shall interpret it in a manner favourable to the  tax payer.  The language  of a  taxing Act cannot be strained in  order to  hold a subject liable to tax. 1694 D, 695 C-E]      Khushi Ram  Behari Lal & Cd. v The Assessing Authority, Sangrur  and  Another,  (1967)  19  S.T.C.  381;  Additional Tahsildar, Raipur and Ors. v. GendalaI,(1968) 21 S.T.C. 263, and Lalji  v. The  Assistant Commissioner,  Sales Tax, Raju. (1958) 9 S.T.C. 571 referred to.      (ii) The  provisions of  the Bombay General Clauses Act apply to  the interpretation of the Bombay Acts unless there is anything  repugnant in  the subject or context of the Act of 1953.  There is  no repugnancy  between the definition of dealer in section 2(6) which is defined to mean any ’person’ who carries  on the  business of selling or buying goods and definition of  ’person’ in  s.3(35) of  the  Bombay  General Clauses Act,  1904 and,  therefore, the  word ’person’ in s. 2(6) must be taken to include a ’body of individuals’ that a firm is.  S. 24  of the Act which provides that every dealer who is  liable to  pay tax  and who  is an  individual Hindu family, an  association or a club. society, firm of company, shall send to the prescribed authority a declaration stating

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the name or the person who shall be deemed to be the manager of such  dealer’s business furnishes a strong indication for saying that the framers of the Act intended to recognise the firm as  a legal entity. This section will be meaningless in its reference  to a  firm, unless the fundamental assumption of the  provision was  that a  firm as  distinct’  from  its partners is an independent assessable entity.[696 C-Fl      (iii) Since  the Act  of 1953  considers a  partnership firm to  be a  legal entity,  on the dissolution of the firm its legal  personality would  cease to  exist. On  the  firm ceasing to have existence in the eye of law, there can be no assessment of  the firm  as such  for, in  the absence of an express statutory provision or a clear statutory intendment, a dead person cannot be assessed. [696 F-G]      Ellis C.  Reid v.  Commissioner of  Income-tax  (1930)5 I.T.C. 100  and the  Commissioner of Income-tar. Bombay City v. Amarchand N. Shroff [1963] 48 T.T.R. 59 referred to.      (iv)S. 5(3)  shows that  if a  firm  has  incurred  the liability to  pay sales-tax,  that liability continues until the cancellation  of the  registration. Again, it is a clear and necessary  implication of  s. 15(1)  of the  Act of 1953 that even  a dissolved  firm can  be assessed or re-assessed within the  period mentioned  therein. S.  15(1) contains an important clause that action thereunder can be taken by the. Collector after  giving a  notice to  the assessee  under s. 14(3) of  the Act  within the prescribed period. Once such a notice is  given, the  Collector gets  the  jurisdiction  to assess or  re-assess the  amount of  tax due from the dealer and all  the provisions  of the Act "shall apply accordingly as if the notice were a notice served under s. 14(3)" S. 15A conferring analogous  powers to assess or re-assess a dealer for taxes  due prior  to November  21, 1956  when the States were recognised  if any  turnover had escaped assessment and provisions of sub-sections 3(i) and 3(ii) of S. 26 providing that when  a firm  liable to  pay the  tax is  dissolved. it shall be  liable to pay the tax on the goods allotted to any partner "as  if" the  goods had  been sold  to such  partner unless he  holds a certificate of registration or obtains it within the  prescribed period  are in  the scheme of the Act that the  assessment of a dissolved firm is within the clear intendment of the statute. [697 H, 639 C, E, 700 A-B, F]      (v) Though  equitable construction may be admissible in relation to  other statutes  or other provisions of a taxing statute, such  a  construction  is  not  admissible  in  the interpretation of a charging or taxing provision in a taxing statute. [702-D] 691      Cape Brandy Syndicate v. Commissioner of Inland Revenue (1921) 12  Tax Cases  358r A.  V. Fernandez  v. The State of Kerala [1957]  S.C.R. 637;  The Commissioner  of  Income-tax Bombay v.  the Provident  Investment Co.  Ltd [1957]  S.C.R. 1141; Commissioner  of Income-tax  Madras v.  Ajax  Products Ltd.  through   its     Liquidator  [1965]   1  S.C.R.  700; Commissioner. Of  Income-lax Gujarat  v. M/s. B. M. Kharwar. [1969] 1  S.C.R. 651; Commissioner of Income tax West Bengal v. Vegetable  Products Ltd.  [1973] I S.C.R. 442; Wealth Tax Commissioner v  Kripashanker [1971]  2 S.C.C.  570 Pryce  v. Mommonthshirs   Canal and  Railway Companies  [1879] 4  A.C. 197; C.I.T. Bengal v. Mahaliram. Ramjeedas 67 I.A. 239, 247. India United  Mills v.  Commissioner of  Excess Profits  Tax [1955] 1  S.C.R. 810,  816. Gursahai Saigal v. C.I.T. Punjab [1963] 3  S.C.R. 893  and Whitney v. Commissioners of Inland Revenue [1925] 10 T.C.88, referred to.      (vi)  Under   the  Bombay  Sales  Tax  Act,  1959  also provisions of section 2(11) and 2(9) respectively containing

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the definition of "dealer" and "person" make it clear that a firm is  a distinct assessable entity. The joint and several liability Of the partners in respect of taxes which the firm is liable  to pay  is provided  by s.18.  The purpose  of s. 19(3) is  to make  the parners jointly and severally liable, even  if  the  firm  is  assessed  to  sale  tax  after  its dissolution. S. 15(3) would otherwise be otiose. S. 19(3) of the 1959  Act makes  explicit what was implict in the Act of 1953. The  Act of  1959 contains  provisions in sections 35, 35A and  62 which  are similar to those provisions which are contained in  sections 15,  15A and  35 of 1953 Act. [703 H, 704 A, D, 705 B-C]      The Sales  Tax officer  (XIX) Enforcement Branch Bombay v. K.M.S. Mari Chettiar (1975) 35 S.T.C. 148 approved.      Per Gupta J. (Dissenting)      (1) A  firm is  a seperate  legal entity and a distinct assessable unit under the Acts of 1953 and 1959. Neither the 1953 Act  nor the 1959 Act contains any provision permitting assessment or  recovery proceedings  being taken  against  a dissolved firm.  It is  open to  the Legislature  by a legal fiction to  keep alive  a dissolved  firm for  some definite purpose, but  here the  legislature has not chosen to do so. No provision  similar to  that contained in s. 189(1) of the Income-Tax Act,  1961 is to be found in  either of these two Acts. [708 H, 711 G, 713 & 714 A]      (ii) ’Dealer’  has been defined in the Acts as a person who carries  on the  business of selling or buying goods. S. 15 o  the 1953  Act which  deals with escaped assessment or under-assessment requires the collector to serve a notice on the dealer concerned before proceeding against him but where the dealer  was a  firm  dissolved  before  the  notice  was issued, there  is no  person carrying  on  the  business  of selling or buying goods on whom, notice can be served. S. 35 of the  19591 Act  is similar  to s.  15 of  the 1953 Act. A dissolved firm  may be equated with a dead person both cease to be assessable units. [706 H, 709 D-H. 710 A, 714 B]      (iii)  S.19  (3)  of  the  1959  Act  which  makes  the erstwhile partners  jointly and severally liable for the tax due from  a dissolved  firm does  not say that assessment or recovery proceedings may be initiated or continued against a firm  as   such  even  after  its  dissolution.  It  is  not permissible to  read in  this provision the additional words "as if the firm exists". To provide that the tax due from a. firm may  be assessed  or collected after its dissolution is not the  same thing  as allowing  the assessment or recovery proceeding to  be started or continued against the dissolved firm. The  power of  assessing a  dissolved firm is no to be mixed up  with the liability of the partners. [710 E-F, 711- B]      The provisions  relating to  the assessment or recovery of the  lax including provisions requiring service of notice on the  assessee would,  in the  case of  a dissolved  firm, apply to the erstwhile partners and all proceedings intended against the firm most be taken against them. [711-G]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION Civil  Appeal No. 1802 of 1970.      Appeal by  Special Leave  from the  Judgment and  order dated the  8th December,  1969, of  the Bomhay High Court in Misc. Petition No. 564 of 1965. 692      S. T.  Desai, H. K. Shah, A. C. Meneses and Mahendra H.

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Gani & K. J. John for the Appellants.      M. C.  Bhandare, Vazir  Singh  and  M.  N.  Shroff  for Respondents.      The Judgment of Y. V. CHANDRACHUD and R S. SARKARIA, JJ was delivered  by CHANDRACHUD  J. A.  C.  GUPTA,  J  gave  a dissenting Opinion.      CHANDRACHUD, J.  The question which arises for decision in this  appeal is  whether under  the Bombay Sales Tax Act, 1953 and the Bombay Sales Tax Act, 1959 a dissolved firm can be assessed  or reassessed  to sales-tax  in respect  of its pre-dissolution turnover.      The first  appellant M/s. Murarilal Mahabirprasad was a partnership firm  constituted under  a deed  of  partnership dated December  3,  1953.  It  was  doing  business  at  30- Commercial  Chambers,   Masjid  Bunder   Road,  Bombay,   as importers, commission  agents, indenting  agents, delcreders agents and  financiers and  also  as  wholesale  dealers  in colours, chemicals,  dyes  etc.  The  firm  consisted  of  5 partners appellants  2 to  5 and one other who died in 1965. The firm  was, registered as a dealer under the Acts of 1953 and 1959.      Under diverse  orders o assessment passed prior to its dissolution, the  firm was  assessed to  sales-tax  for  the period July 1953 to March 31, 1958. On November 10, 1960 the Sales Tax officer (VIII), Enforcement Branch, Bombay, seized certain documents  from  the  firm’s  office.  Notices  were issued to  the firm  from time  to time  for  attendance  to explain these  documents. Over  sixty  meetings  took  place between the  firm’s representatives  and the authorities, at the end  of which,  two notices dated November 20, 1963 came to be issued to the firm. By the first of these notices, the firm was asked to explain certain discrepancies in its hooks of account. The second notice was issued under section 15 of the Act  of 1953,  by which the firm was asked to show cause why the  assessment already  made for the period 1-4-1957 to 31-3-1958 should  not be reopened on the ground that certain sales were  suppressed by  the firm  as a  result of which a part of  its turnover  had escaped assessment. Respondent 1, the Sales  Tax officer  (VIII), Enforcement  Branch  Greater Bombay, fixed  the hearing  of the  assessment proceeding on April 1,  1965 but  the firm  requested by  its letter dated April 3,  for an adjournment till May on the ground that one of the  partners had  died suddenly  in Delhi  and that  the other partners  would be  back in  Bombay by May. On May 26, 1965 respondent  addressed a notice to the firm stating that the hearing  would be taken up from day to day from June 14, 1965 and  that the  partners should  remain present  at  the hearings.      There  was   considerable  difficulty  in  serving  the aforesaid notice,  as another  firm  by  the  name  of  M/s. Murarilal Balkrishna  had apparently  started doing business at the  place where  the assessee  firm was  carrying on its business. Intimations were sent to the registered address of the firm  and an Inspector of the Department went personally to effect  the  service.  Eventually,  on  August  31,  1965 respondent 1  passed ex  -parte orders  of re-assessment for the period  1-4-1957 to  31-3-1958 and  ex-parte  orders  of assessment  for   the  period  1-4-1958  to  31-3-1961.  The assessment of the firm for the period 693      subsequent to  31-3-1958 was  pending ever since, as it had to  await the  result of inspection of the incriminating documents seized  from the  firm’s office in November, 1960. On October 22, 1965 demand notices were pasted on the office of  the  firm  at  its  Masjid  Bunder  Road  address.  M/s.

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Murarilal Balkrishna  who were doing business there are said to have  informed a  partner of the firm that demand notices were so pasted.      By the revised assessment order, respondent 1 held that for the  period  1-4-1957  to  31-1-1958,  the  turnover  of suppressed  sales  which  had  escaped  assessment  was  Rs. 41,47,090. He assessed on this turnover an additional tax of Rs. 1,95,582.47.  Respondent 1  found  that  for  subsequent periods also  a large part of the turnover was suppressed by the firm. On that footing, he assessed the sales tax for the period 1-4-1958 to 31-3-1961, breaking up the period in fore assessments. By the demand notices, the firm was called upon to pay  a total  tax of  Rs. 6,70,969.96,  inclusive of  the sales tax  quantified in the revised assessment. The notices apprised the firm of its liability to pay penalty if the tax was not paid within the stated period.      The assessment  for the  period 1-4-1957  to 31-12-1959 was made  under the Act of 1953. The tax due for this period comes to Rs. 5,63,900 and odd. The assessment for the period 1-1-1960 to 31-3-1961 was made under the Act of 1959 The tax due for  this period  comes to  Rs. 92,300 and odd. The firm has filed  appeals against  the aforesaid  orders, which are pending  before   the  Assistant  Commissioner,  Sales  Tax, Bombay. In  view or  those appeals  the recovery proceedings were stayed by the appellate authority.      During the  pendency of  the assessment proceedings, no formal intimation appears to have been given by or on behalf of the  firm to  the assessing  authority that  the firm was dissolved. It  was on  December 21,  1964 that  in a  letter written to  respondent 1,  one of the partners made a casual and  fleeting   reference  to  that  fact:  "you  will  also appreciate that  the firm was dissolved 4 years back". It is however futile  to pursue  this line  of inquiry because, on being called  upon to  produce the  deed of dissolution, the partners did  produce a  deed  showing  that  the  firm  was dissolved on  May 20,  1962. Respondent  1 appears  to  have accepted the  authenticity of the deed of dissolution and in fact, acting  upon it,  the sales-tax authorities can called the registration  of the  firm under the Sales Tax Acts with effect from  June 16,  1962. We  cannot now  go  behind  the position that the firm was dissolved on May 20, 1962      On November  24,  1965  the  appellants  filed  a  writ petition in  the High Court of Bombay challenging the orders of re-assessment  and assessment on various grounds. In view of the  fact that  the appeals  filed by the firm before the Assistant Commissioner  of Sales  Tax were pending, the High Court did  not decide  the question  whether  the  procedure prescribed by law was followed in the assessment proceedings and whether  the orders  were justified  on merits. The only question which  the High  Court considered  was whether  the impugned orders 694 were without  jurisdiction as  having been  passed against a dissolved A firm. By its judgment dated December 8, 1969 the High Court rejected the contention of the firm and held that in view  of the provisions contained in the Bombay Sales Tax Acts of  1953 and  1513, it  was  permissible  to  assess  a dissolved  firm.   The  correctness   of  that   finding  is challenged by  the appellants  in  this  appeal  by  special leave.      The only  question with  which we are concerned in this appeal is whether the orders of re-assessment and assessment passed by respondent 1 are without jurisdiction by reason of the fact  that the  assessee firm was dissolved prior to the date on  which those  orders were  passed. In fact, the very

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assessment and  re-assessment proceedings  for The  relevant years were  commenced after the dissolution of the firm. The notice under  which those  proceedings were started is dated November 20,  1963 while  the firm  was dissolved on May 20, 1962. We  may mention  that in  a judgment  to which we must immediately turn,  this Court  has taken  the view  that  if under a statute a dissolved firm cannot be assessed to Sales Tax, it  does not make any difference whether the proceeding was initiated before or after the dissolution Thus, the true question for  decision is  whether a  dissolved firm  can be assessed or re-assessed under the Bombay Sales Tax Act, 1953 and the Bombay Sales Tax Act, 1959.      A similar  question came  up for  decision before  this Court in  State  of  Punjab  v.  M/s.  Jullundur  Vegetables Syndicate(1). That  was case  under the  East Punjab General Sales Tax  Act,  1948.  ’The  respondent  firm  therein  was assessed to  sales tax  in 1953 but that order was set aside for  want  of  jurisdiction.  Fresh  proceedings  were  then started for assessment but the firm was dissolved before the commencement of  those proceedings.  The firm was thereafter assessed  and   the  order  of  the  Sales-Tax  officer  was confirmed in further proceedings with some modifications. On a reference  the Punjab  High Court set aside the assessment on the  ground that  the East  Punjab General Sales-Tax Act, 1948 did  not provide  for  a  machinery  for  assessment  a dissolved firm  in respect  of its pre-dissolution turnover. The judgment of the High Court was confirmed by this Court.      Since the learned counsel for the appellants has relied heavily on  the  aforesaid  decision,  it  is  necessary  to analyse it  closely. The  Court. speaking through Subba Rao, J., observed  at the outset that the question as regards the validity  of   the  assessment  depended  upon  the  relvant provisions of  the particular Act. On examining the relevant provisions, namely, sections 2(d), 4(1), 7(1), 16(b), 17 and Rule 40  the court  held that  there was no provision in the statute expressly.  authorising the  assessing authority  to assess a  dissolved firm.  The Court  then proceeded to find whether  such   a  power  could  be  gathered  by  necessary implication from  the other  provisions of, the Act and held in the  negative. Thus, by reason of the language and scheme of the  Punjab Act,  a dissolved firm could not be assessed. Relying on  section 2(d) which defined a dealer to include a firm, the Court held that though under the partnership law a firm was not a legal entity,      (1) [1966] 2 S.C.R. 457. 695 the firm was an independent assessable unit for the purposes of the  Punjab Act.  If that be so, on dissolution, the firm ceased to be a legal entity and could not be assessed in the absence of  a statutory  provision permitting the assessment of a dissolved firm. The Court found that there was a lacuna in the  Punjab Act  of 1948  which was filled up later by an amendment but that amendment was not retrospective. Finally, the Court touched upon the conflicting decisions of the High Courts on the point and observed that all of those decisions were over-burdened  with  the  consequences  of  a  contrary construction on  the, incidence  of taxation  and also their mixing up the question of the statutory power of assessing a dissolved firm with the liability of the partners to pay the tax so  assessed on  the firm  before its  dissolution.  The reasons given  by some  of the  High Courts  in support of a contrary conclusion were rejected by this Court.      The Jullundur  Vegetables Syndicate case is a clear and direct authority  for  the  following  propositions:  (1)  A dissolved firm  cannot be  assessed to  sales tax unless the

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statute under  which the  assessment is  made authorises the assessment either expressly or by necessary implication; (2) If, by  definition, a  firm is  a dealer  under an  Act,  it becomes a legal entity or an independent assessable unit for the .  purposes of  that Act. If that be so, the firm ceases to be  a legal  entity   on dissolution  and thereafter,  on principle it  cannot be assessed ‘.  to sales tax unless the statute so authorises expressly or by necessary implication; (3) Neither  a provision  requiring a  dealer to  inform the authorities,  if   it  discontinues   its  business,  nor  a provision imposing.  a joint  and several  liability on  the dealer and  its partners  for the payment of tax, penalty or any  other  amount  due  under  the  Act  or  rules  can  be interpreted as conferring jurisdiction to assess a dissolved firm; (4)  In interpreting a fiscal statute the Court cannot proceed to  make good  the  deficiencies,  if  any,  in  the statute: it  shall interpret the statute as it stands and in case of  doubt, it shall interpret it in a manner favourable to the  tax payer.  The language  of a  taxing Act cannot be strained in order to hold a subject liable to tax.      The decision in the Jullundur case was followed by this Court without  more, in  Khushi Ram  Behari Lal & Co. v. The Assessing  Authority,   Sangrur,  and  A  71r.(11);  and  in Additional Tahsildar  Raipur. and  ors. v Gendalal(2). Khuhi Ram’s case  arose under  the East  Punjab General  Sales Tax Act, 1948,  the provisions  of which were considered by this Court in  the Jullundur  case. Gendalal’s  case arose  under the Central  Provinces and  Berar Sales  Tax Act,  1947. The court did not examine the provisions of that Act separately, presumably because  those provisions  were considered by the M.P. High  Court in  Lalji v.  The  Assistant  Commissioner, Sales-tax, Raipur  ), and the decision of the Madhya Pradesh High Court  was expressly  disapproved by  this Court in the Jullundur case.  The Madhya  Pradesh High  Court had  relied upon section  17 of  the  C.P.  and  Berar  Sales  Tax  Act, corresponding to section 16(b) of the East Punjab Act, to (1) [1967] 19 S.T.C. 381.           (2) [1968] 21 S.T.C 263.                   (3) [1958] 9 S.T.C. 571. 696 sustain the  continuity of  the firm as a legal entity until information of  dissolution  was  given  to  the  prescribed authority. No  other provision‘of  the C.P.  Act, apart from section 17, appears to have been canvassed before this Court in support  of the  argument that  it was  permissible under that Act to assessed dissolved firm.      Applying the  ratio in  the  Jullundur  case  was  must examine me  provisions of  the two  Bombay Acts  in order to find whether  those provisions,  expressly or  by  necessary implication, authorise the assessment of a dissolved firm.      Turning first  to the Act of 1953, section 2(6) of that Act defines  a ’dealer’,  in so far as relevant, to mean any ’person’ who  carries on  the business  of selling or buying goods. This  definition does  not by  itself make the firm a distinct assessable  entity and the position obtaining under the general  law that a firm is but compendious name for the partners who  compose it  remains outstanding.  But  section 3(35) of  the  Bombay  General  Clauses  Act,  1904  defines ’person’ as including "any company or association or body of individuals, whether incorporated or not". The provisions of the Bombay  General Clauses  Act apply to the interpretation of the Bombay Acts unless there is anything repugnant in the subject or context of the Act under review. There is no such repugnancy and  therefore the  word ’person’ in section 2(6) of the  Act of  1953 must  be taken  to include  a ’body  of individuals’ that  a firm  is. Not  only is there nothing in

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the Act  of 1953  which is  repugnant to the notion that the firm could be a dealer, but section 24 or that Act furnishes a strong  indication for  saying that the framers of the Act intended to  recognise firms as a legal entity. That section provides that  every dealer who is liable to pay the tax and who is  an undivided Hindu family, an association or a club, society, firm  or company,  shall  send  to  the  prescribed authority a  declaration stating  the name of the person who shall be deemed to be the manager of such dealer’s business. Section 24  would be  meaningless  in  its  reference  to  a ’firm’, unless  the fundamental  assumption of the provision was that  a  firm  as  distinct  from  its  partners  is  an independent assessable  entity. That assumption is made good by the combined operation of section 2(6) of the Act of 1953 and section 3(35) of the Bombay General Clauses Act.      Since the  Act of  1953 considers a partnership firm to be a  legal entity, on the dissolution of the firm its legal personality would  cease to  exist. On  the firm  ceasing to have existence in the eye of law, there can be no assessment of the  firm as  such for,  in the  absence  of  an  express statutory provision  or a clear statutory intendment, a dead person cannot be assessed.      Section 2(2)  of the  Income-tax Act,  1922 defined  an assessee as  "a person  by whom  income-tax is payable". The Bombay High  Court, in  Ellis C.  Reid  v.  Commissioner  of Income-tax,(1) held  that the definition in terms applied to living persons  only. that  the treasury had no power to tax without the express permission to the      (1) [1930] I.T.C. 100. 697 legislature and  therefore if  an assessee  failed to make a return of  his   income under  section 22(2), the income-tax officer had  no power  to make  as assessment  under section 23(4) after  the assessee’s  death. Seeing that, originally, in the  Income-tax Act,  1922 there  was no reference to the decease of a person on whom the tax was charged, the learned Chief Justice  observed: "It  must have  been present to the mind of the legislature that whatever privileges the payment of income-tax  may confer,  the privilege  of immortality is not amongst  them", and that it was very‘difficult to assume that the  omission in  the Act as regards the power to tax a dead assessee  was  unintentional.  Section  24B  which  was introduced in  the Income-tax Act, 1922 to remove the lacuna pointed  out  in  the  Bombay  judgment  extends  the  legal personality of  a deceased  assessee for  the duration  of a previous year, so that income received by an assessee during the previous  year and  the income received by his heirs and legal representatives  after his  death but  in the previous year can  be brought to tax after his death. In Commissioner of Income-tax,  Bombay City  v. Amarchand N. Shroff (1) this Court  observed  that  the  individual  assessee  under  the Income-tax Act  has ordinarily  to be  a living person, that there can  normally be  no assessment  of a person after his legal personality  ceases and  that, apart from section 24B, no assessment could be made on a dead person.      We must  therefore proceed  of the basis that the first appellant firm  was an  independent assessable  entity under the Act  of 1953 and that on its dissolution on May 20, 1962 its legal  personality ceased  to have  existence. Is  there then  any  provision  in  the  1953  Act  which  permits  or contemplates the  assessment of a firm after its dissolution ? If  not, the  general rule  would apply that a dead person cannot be assessed.      It is  plausible that  a distinction  ought to  be made between the  death of an individual and the dissolution of a

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firm. Human beings, as assessees, are not generally known to court  death   to  evade   taxes  Death,  normally,  is  not volitional and  it is understandable that on the death of an individual, his  liability to be assessed to tax should come l; to  an end  unless the  statute provides to the contrary. With firms  it is  different, because  a firm  which  incurs during its  existence a liability to pay sales-tax may, with a little  ingenuity evade its liability by the voluntary act of dissolution. The dissolution of a firm could therefore be viewed differently  from the  death of an individual and the partners could  be denied  the advantage of their own wrong. But we  do not  want to  strike this  new path  because  the Jullundur case  and the  two  cases  which  follow  it  have likened the  dissolution of  a  firm  to  the  death  of  an individual. Let  us therefore  proceed to  examine the other provisions of the 1953 Act.      Section 5  of the  1953 Act  provides that every dealer whose turn  over exceeds  the limits therein mentioned shall be liable  to pay  sales tax.  Sub-section (3)  of section 5 says that  every dealer  who has  thus. become liable to pay the tax  "shall continue to be so liable until can cellation of his registration under sub-section (6) of section 11, and      (1) [1963] 48 I. T.R. 59. 14-L925SupCI/75 698 upon such  cancellation his  liability to  pay the tax shall cease". This   provision  shows that  if a firm has incurred the liability  to pay  sales tax,  that liability  continues until the  cancellation of  the registration. There may be a hiatus  between   the  dissolution   of  the  firm  and  the cancellation of its registration and during this interregnum the liability  of the  firm is  expressly kept  alive by the statute. Under  section 11(6),  the prescribed authority has to cancel  the registration  with effect from the prescribed date if,  inter alia,  the business  in respect  of which  a certificate has  been granted  under  section  11  has  been discontinued or  transferred. On  being satisfied  that  the business has been discontinued or transferred, the authority concerned has undoubtedly to cancel the registration but the obligation to cancel the registration would arise not on the statement  of   an  assessee  that  the  business  has  been discontinued or  transferred but  on the satisfaction of the authority that  this is  truly so. In other words, by virtue of section  5(3), the  mere fact  of dissolution does not by itself bring to an end the firm’s liability to be taxed.      Section 15(1)  of the 1953 Act has an important bearing on the  question under  consideration.  That  section  reads thus:           "15. (1)  If in  consequence  of  any  information      which has  come into  his possession  the Collector  is      satisfied that  any turnover  in respect  of  sales  or      purchases of  any  goods  chargeable  to  the  tax  has      escaped assessment  in  any  year  or  has  been  under      assessed or  assessed at a lower rate or any deductions      have been wrongly made therefrom, the Collector may, in      any case  were such  turnover has escaped assessment or      has been under-assessed or assessed at a lower rate for      the reason  that the  provisions of  sub-section (1) of      section  2   of  the   Bombay  Sales   Tax  (Validating      Provisions) Act,  1957 were  not then  enacted, at  any      time within  eight years,  and in any case where he has      reason to  believe that  the dealer  has concealed  the      particulars of such sales or purchases or has knowingly      furnished incorrect  returns, at  any time within eight      years and  in any  other case,  at any time within five

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    years of  the end  of that  year, serve  on the  dealer      liable to  pay the  tax in  respect of  such turnover a      notice containing  all or any of the requirements which      may be  included in  a notice  under sub-section (3) of      section 14  and may  proceed to  assess or reassess the      amount  of  the  tax  due  from  such  dealer  and  the      provisions of  this Act  shall apply  accordingly as if      the notice were a notice served under that sub-section:           Provided that  the amount  of  the  tax  shall  be      assessed after  making the  deductions  permitted  from      time to  time under the Bombay Sales Tax Act, 1946, the      Bombay Sales Tax (No. 2) Ordinance, 1952. and this Act,      as the case may be, at the rates at which it would have      been assessed  had the  turnover not escaped assessment      or full assessment as the case may be: 699           Provided further  that where  in respect  of  such      turnover or deduction, as the ease may be, an order has      already been passed under section 30 or section 31, the      Collector  shall  make  a  report  to  the  appropriate      appellate or  revising authority,  as the  case may be,      which shall thereupon after giving the dealer concerned      a reasonable  opportunity of  being  heard,  pass  such      order as it deems fit." This provision  leaves no  doubt that  the dissolution  of a firm cannot  operate as  a bar  to a fresh assessment of the turnover which  had escaped  assessment, provided  that  the action contemplated  therein is  taken within  the specified period. In  substance, section  15(1) provides  that if  the Collector  is   satisfied  that  any  turnover  has  escaped assessment or has been under assessed or assessed at a lower rate or  any deductions have been wrongly made therefrom, he can after serving a notice on the assessee proceed to assess or re-assess  the amount  of the  tax due  from him. It is a clear and necessary implication of section 15(1) that even a dissolved firm  can be  assessed or  re assessed  within the period mentioned  therein. The dissolution cannot operate as a bar  to the  exercise by  the collector of his power to re open an  assessment and  indeed it  is difficult to conceive that in  matters as vital to the administration of sales-tax as the  assessment of  suppressed turnovers, the legislature could have  contemplated that the liability to re-assessment could be  avoided by the erring firm by the simple expedient of winding up its affairs.      Section 15(1)  contains an important clause that action thereunder can  be taken  by the  Collector after  giving  a notice to the assessee under section 14(3) of the Act within the prescribed  period. Once  such a  notice is  given,  the Collector gets  the jurisdiction  to assess or re-assess the amount of  tax due from the dealer and all the provisions of the Act  "shall apply  accordingly as  if the  notice were a notice served  under" section 14(3). Section 14(3) speaks of the power  of the  Collector to assess the amount of tax due from the dealer after giving notice to him, if the Collector is not  satisfied that the returns furnished are correct and complete. The  jurisdiction to  assess or re assess which is conferred by section 15(1) is thus equated with the original jurisdiction to  assess the dealer under section 14. By this method, the  continuity of  the  legal  personality  of  the assessee is  maintained in order to enable the assessment of turnover which  has escaped assessment. It is no answer to a notice under  section 15  that the partners having dissolved the firm,  the assessment  cannot be  reopened.  It  puts  a premium on  one’s credulity  to accept that having created a special jurisdiction  to  assess  or  re-assess  an  escaped

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turnover,   the    legislature   permitted   that   salutary jurisdiction to  be defeated  by the  device o dissolution. The  argument  of  the  appellants  really  comes  to  this: suppress the  turnover, evade  the sales-tax,  dissolve  the firm and earn your freedom from taxation.      Importantly, the notice dated November 21, 1963 for re- opening the  assessment for the period 1-4-1957 to 31-3-1958 was served  on the  firm under section 15. On re-assessment, the firm  was assessed  to a sales-tax of Rs. 1,95,582.47 on sales suppressed during that period. 700      Section 15A  confers on  the Collector analogous powers to asses   or  re-assess a  dealer for  taxes due  prior  to November 21,  1956 when.  the States  were  reorganised,  if either no assessment was made for the prior period or if any turnover had escaped assessment. This provision like the one contained in section 15, is of general application and makes no exception  in favour  o dissolved  firm. Therefore, if a firm was not assessed prior to the re-organisation of States or if any part of its turnover had escaped assessment, it is competent to  the Collector  to assess or re-assess the firm notwithstanding its  subsequent  dissolution.  This  is  the necessary implication  of section  15A. It  must follow as a corollary that  the power to rectify a mistake apparent from the record  can he  exercised by the Collector under section 35 of  the Act  of 1953  even after  the dissolution  of  an assessed  firm,   though  on  conditions  specified  in  the section. The  section contains a compelling implication that evident errors  can be  corrected no matter whether the firm is in  existence or  is  dissolved.  Dissolution  is  not  a panacea for liability to pay sales-tax.      A difficulty  was raised  on behalf  of the  appellants that on  the dissolution of the firm the principle of agency would cease  to apply  as amongst the partners and therefore no partner would have the right to represent either the firm or any of the other partners in the proceeding under section 15, commenced  or continued  after the  dissolution  of  the firm. This  question does  not bear  on the  liability of  a dissolved firm  to be assessed or the power of the Collector to assess  a dissolved firm under section 15. It may perhaps be that  in the  assessment of a dissolved firm, each of the erstwhile partners may have a right to be heard because each of then would be interested in warding off a liability which may fall  on them  jointly and severally. But that is more a matter of procedure which the assessing authority must adopt in the  assessment proceedings  in order to give efficacy to the order which may eventually be passed in the proceedings. Who, in the assessment proceedings against a dissolved firm, has the  right to  be heard  will not  determine  whether  a dissolved firm can be assessed under the Act of 1953.      Sub-sections 3(1)  and 3(ii) of section 26 provide that when a  firm liable to pay the tax is dissolved, it shall be liable to  pay the  tax on the goods allotted to any partner "as if’  the goods  had been sold to such partner, unless he holds a.  certificate of  registration or  obtains it within the prescribed period. This provision in terms envisages the assessment of  a dissolved  firm, though only to the limited extent and  for the  limited purpose that the goods allotted to a  partner at  the time of dissolution shall be deemed to have been  sold to that partner. By the use of the words "as if", section 26(3) (ii) creates a fiction that the allotment of goods  to a  partner on  dissolution of the firm shall be deemed to  be a  sale made  by the  dissolved firm  to  that partner. The  fiction cannot  be extended  further than  the sub-section warrants  but there  is no  fiction in regard to

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the liability  of the  dissolved firm  to  the  assessed  to sales-tax in  respect of  the goods  thus deemed to be sold. The imposition  of such  a liability  is in keeping with the general scheme 701 of the  Act, the  various provisions  of which show that the assessment  of   a  dissolved   firm  is  within  the  clear intendment of the statute.      The  construction   which  we   have  placed  on  these provisions of  the 1953 Act does no violence to the familiar principle which  in Cape Brandy Syndicate v. Commissioner of Inland Revenue(1), was expressed thus by Rowlatt J.:           "In a  taxing statute  one has  to look at what is      clearly said.  There is  no room  for  any  intendment.      There is no equity about a tax. There is no presumption      as to a lax. Nothing is to be read in, nothing is to be      implied. One  can only  look  fairly  at  the  language      used." This principle  was approved  and adopted  by this  Court in several   decisions:  (A.  V.  Fernandez  v.  The  State  of Kerala(2), The  Commissioner of  Income-tax, Bombay  v.  The Provident Investment Co. Ltd.(3) Commissioner of Income-tax, Madras v.  Ajax Products  Ltd., through  its  Liquidator(4), Commissioner of  Income-tax  West  Gujarat  v.  M/s.  B.  M. Kharwar(5) 71  Commissioner of  Income-tax, West  Bengal  v. Vegetable  Products  Ltd.(6).  The  principle  is  variously expressed by  saying that  in fiscal  statutes one must have regard to the letter of the law and not to the spirit of the law, that  the subject  cannot  be  taxed  by  inference  or analogy,  that  in  a  taxing  Act  there  is  no  governing principle to  look at  and one  has simply  to go on the Act itself to  see whether  the tax  claimed is,  that which the statute imposes, that while construing taxing Acts it is not the function  of the  court to  give to  the  words  used  a strained and  unnatural meaning  and that the subject can be taxed only, if the revenue satisfies the court that the case falls strictly within the provisions of the law.      The principle  thus stated has hardly ever been doubted but it  is necessary in the application of that principle to remember that though the benefit of an ambiguity in a taxing provision must  go to  the subject  and the taxing provision must receive  a strict  construction "that  is not  the same thing as saying that a taxing provision should not receive a reasonable construction."(7).  If  the  statute  contains  a lacuna or a loophole, it is not the function of the court to plug it  by a  strained construction  in  reference  to  the supposed intention  of the legislature. The legislature must then step in to resolve the ambiguity and so long as it does not do  so, the  tax-payer will  get  the  benefit  of  that ambiguity. But,  equally, courts  ought not  to be astute to hunt out  ambiguities by  an  unnatural  construction  of  a taxing section.  Whether the statute, even a taxing statute, contains an  ambiguity has  to  be  determined  by  applying normal rules of construction for inter petition of statutes. As observed  by Lord  Cairns in Pryce v. Mommonthshire Canal and Railway  Companies(8), cases  which  have  decided  that Taxing Acts are to be construed with strictness, and that no payment is  to he  exacted from  the subject  which  is  not clearly and  unequivocally required  by Act of Parliament to be made, probably      (1) [1921] 12 Tax Cases 358.      (2) [1957]S.C.R. 837.      (3)[1957] S. C. R. 1141.        (4) [1965] 1 S.C.R.700.      (5) [1969] I S.C.R. 651.       (6) [1973] 1 S.C.R. 442.      (7) Wealth  Tax Commissioner vs. Kripashankar, [1971] 2      S.C.C. 570.

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    (8) [1879] 4 A.C. 197. 702 meant little more than this, that, inasmuch as there was not any a  priori liability  in a  subject to pay any particular tax, nor  an yantecedent  relationship between the tax payer and the  taxing authority  no  reasoning  founded  upon  any supposed  relationship  of  the  tax-payer  and  the  taxing authority could  be brought to bear upon the construction of the Act  and therefore,  the tax-payer  had a right to stand upon a  literal construction  of the  words  used,  whatever might be the consequences.      The true  implication of  the principle  that a  taxing statute   must be  construed strictly is often misunderstood and the  principle  is  unjustifiably  extended  beyond  the legitimate field  of its  operation. In deed, the more well- expressed the  principle as in the Cape Brandy case, greater the reluctance  to  see  its  limitations.  In  that  famous passage marked  by a  happy turn of phrase, Rowlatt J. said, "there is  no equity about a tax. There is no presumption as to a  tax." There is no equity about a tax in the sense that a provision  by which  a tax  is imposed has to be construed strictly,  regardless   of  the   hardship   that   such   a construction may cause either to the treasury or to the tax- payer. If  the subject  falls squarely  within the letter of law he  must be  taxed, however inequitable the consequences may appear  to the  judicial mind. If the Revenue seeking to tax cannot  bring the  subject within the letter of law, the subject is free no matter that such a construction may cause serious prejudice  to the  Revenue. In  other words,  though what is  called equitable  construction may be admissible in relation to  other statutes  or other provisions o a taxing statute. such  a  construction  is  not  admissible  in  the interpretation of a charging or taxing provision of a taxing statute. speaking  for the  court in C. 1. T. Madras v. Ajax Products Ltd.(1),  Subba Rao  J., after  citing the  passage from the  judgment of  Rowlatt J.  in the  Cape Brandy  case said: "To  put it  in other  words, the subject is not to be taxed unless  the charging  provision  clearly  imposes  the obligation".      We are  concerned in this case to determine not whether a particular  turnover  can  be  brought  to  sales-tax  but whether if  the turnover  was liable to be charged to sales- tax, the  firm can be assessed to tax after its dissolution. In other  words, we  are concerned  with a  provision  which prescribes the  machinery for the computation of tax and not with a charging provision of the Sales Tax Acts.      In C.I.T.,  Bengal vs.  Mahaliram Ramjeedas(2),  it was held by  the Privy Council that section 34 of the Income-tax Act, 1922,  although a  part o  a taxing  Act,  imposed  no charge on the subject but dealt merely with the machinery of assessment. Lord  Normand who  delivered the judgment of the Judicial Committee  observed: "In interpreting provisions of this kind  the rule is that construction should be preferred which makes  the machinery  workable, ut  res valeat  notius quam pereat."  In India  United  Mills  v.  Commissioner  of Excess Profits  Tax(3), this  Court held  that section 15 o the Excess Profits Tax: Act was not a charging section but a machinery section,’  And a  machinery section  should be  so construed as  to effectuate  the charging sections". Section 15 was intended to vest in the Excess      (1) [1965] 1 S.C.R. 700, 706.     (2) 67 I.A. 239, 247.                 (3) [1955] S.C.R. 810, 816. 703 Profits Tax Officer a power to amend the assessment, when it was found  that the relief granted was in excess of what the

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law allowed. one of the sections under which relief could be granted was  section 26(3).  This Court held that section 15 must be  so interpreted  as to  confer a power on the Excess Profits Tax officer to revise the assessment when relief had been erroneously  granted under  section 26(3). In Glursahai Saigal v.  C.I.T. Punjab(1),  an assessee was called upon to pay interest  under section  18A(8) of  the Income-tax  Act, 1922 for  failure to  make an estimate of his income and pay tax according  to that  estimate under  section 18A(3).  The assessee relief  on the  rule of  construction formulated by Rowlatt J.  in the  Cape Brandy  case and  contended that he could not be charged with interest as it was not possible to calculate interest  in accordance  with sub-section  (6)  by reason of  his not  having  paid  tax  at  all.  This  Court approved  the  ratio  of  the  Privy  Council  in  Mahaliram Ramjeedas’s case  and held  that it was well-recognised that the rule  of  construction  on  which  the  assessee  relied applied only to a taxing provision and had no application to all provisions  in a taxing statute. The Court observed that the rule  did not  apply to  a provision  not creating;  the charge for  the tax  but laying  down the  machinery for its calculation or  procedure for  its  collection.  Sarkar  J., speaking for  the Court,  said: "The  provisions in a taxing statute dealing  with machinery  for assessment  have to  be construed by  the ordinary  rules of construction that is to say,  in   accordance  with   the  clear  intention  of  the legislature which is to make a charge levied effective." (p. 899). Sub-section (6) was accordingly read by the court in a manner which  made it workable, thereby preventing the clear intention of sub-section (8) being defeated.      It is  indisputable that  the first  appellant firm was liable to  be charged to sales-tax on its business turnover. The charging  provisions are contained in Chapter III of the Act of  1953 and  Chapter II  of the  Act of  1959. In  this appeal, we  have to  construe the  machinery  provisions  of those Acts.  In accordance  with the view taken in the cases cited above, the machinery sections ought to be construed so as to  effectuate the  charging sections.  The  construction which we  have placed  on the  machinery provisions  ‘of the 1953 Act’  will give  meaning and  content to  the  charging sections, in the sense that our construction will effectuate the  provision  contained  in  the  charging  sections.  The resourcefulness  and  ingenuity  which  go  into  well-timed dissolution of  firms ought  not to be allowed to be used as convenient instruments  of tax  evasion. As observed by Lord Dunedin in  Whitney v. Commissioners of Inland Revenue(2), " A statute is designed to be workable, and the interpretation thereof by  a court  should be to secure that object, unless crucial  omission   of  clear   direction  makes   that  end unattainable." Far  from there being any crucial omission or a clear  direction in  the present case which would make the end unattainable,  the various  provisions to  which we have drawn attention  leave it  in no doubt that a dissolved firm can be assessed on its pre-dissolution turnover.      The Bombay  Sales Tax  Act, 1959 presents no difficulty as its  provisions are  even clearer  than those of the 1953 Act. Section      (1) [1963] 3 S.C.R. 893.         (2) [1925] 10 T.C. 88. 704 2(11) of  the 1959  Act defines a dealer to mean any "person who   carries on  the business of buying or selling goods ". Under section  2(19), ’person" includes, inter alia, a firm. There is  therefore no  doubt that  a  firm  is  a  distinct assessable entity under the 1959 Act also.      Section 19(3)  of the  1959 Act  puts the  matter under

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inquiry beyond all doubt by providing:           "Where a  dealer, liable to pay tax under this Act      is a firm, and the firm is dissolved, then every person      who was a partner shall he jointly and severally liable      to pay  to the  extent to  which  he  is  liable  under      section 18,  the tax  (including any  penalty) due from      the firm under this Act or under any earlier law, up to      the time  of dissolution,  whether such  tax (including      any penalty)  has been assessed before such dissolution      but  has   remained  unpaid,   or  is   assessed  after      dissolution." This provision  in  terms  envisages  the  assessment  of  a dissolved firm  by providing  that erstwhile  partners of  a dissolved firm  shall be liable jointly and severally to pay the tax  and penalty  due from  the firm  whether  the  tax, including any penalty, has been assessed beore or after the dissolution. The  assessment which the sub-section speaks of is  assessment  of  the  firm  as  such  because  where  the assessment is  made  on  the  partners  themselves,  it  was unnecessary to provide that they shall be liable jointly and severally to  pay the  tax assessee  on them.  The joint and several liability  of the partners in respect of taxes which the firm  is liable  to pay  is provided  by section 18. The purpose of section 19(3) is to make the partners jointly and servally liable  even if  the firm  is assessed to sales-tax after its  dissolution. Section  19(3)  would  otherwise  be otiose. Thus"  section 19(3)  of the 1959 Act makes explicit what was implicit in the Act of 1953.      It is  relevant, though  we did not refer to his aspect while dealing  with the  provisions of  the 1953  Act,  that section 19(3)  of the  1959 Act  contains a clear indication that the legislature intended that a dissolved firm could be assessed under  the 1953  Act also.  Section 19(3) speaks of the liability  of partners  for the tax due from a dissolved firm and  provides that  they shall be jointly and severally liable to  pay the  tax due  from the  firm under the Act of 1959 or  "under any  earlier law", whether such tax has been assessed before  or after  dissolution. Section 2(12) of the 1959 Act  defines "earlier  law" to  mean, inter  alia,  the Bombay Sales  Tax Act,  1953. Thus. One of the postulates of section 19(3)  at any rate is that a dissolved firm could be assessed under  the 1953  Act. Such a postulate accords with the principle  that if the legislature provided for a charge of sales-tax,  it could  not have  intended to  render  that charge ineffective  by permitting  the partners  to dissolve the firm,  an easy  enough thing  to do.  Nothing, in  fact, would be  easier to  evade a  tax liability  than to declare that the  firm, admittedly  liable  to  pay  tax,  has  been dissolved. Section  19(3) of  the 1959  Act not  only  makes clear what  was necessarily  implied in the 1953 Act, but it throws additional  light on  the true  Construction  of  the earlier law.  But we  thought it  advisable to  keep section 19(3) of  the 1959  Act apart  while construing the 1953 Act because it  is the  courts, not the legislature, who have to construe 705 the laws  of the  land authoritatively. As said in Craies on Statute  Law,   "Except  as   a  parliamentary   exposition, subsequent Acts  are not  to be  relied on  as an aid to the construction of  prior unambiguous Acts." (6th Ed., p. 146). The limited use which may be made of the language of section 19(3) of  the 1959 Act, though such a course is unnecessary, is for  saying that it serves to throw some light on the Act of 1953,  in case  the argument  is that  the Act of 1953 is ambiguous.

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    Section 19.(3)  being quite  clear and  explicit, it is unnecessary to  dwell on  the other provisions of the Act of 1959 in  order to show that a dissolved firm can he assessed under it.  We may  only point  out  that  the  Act  of  1959 contains provisions similar to those in sections 15, 15A and 35 o the Act of 1953 on which we have dwelt at some length. Those provisions  can be found in sections 35, 35A and 62 of the Act.      The view taken by a Full Bench of the Madras High Court in The  Sales Tax  Officer (XIX), Enforcement Branch, Bombay v. K.  M. S  Mari Chettiar(1),  that a dissolved firm can be assessed under  the Act  of 1959 is, in our opinion, correct though it  was wholly  unnecessary to say that the words "is assessed  after  dissolution"  occurring  in  section  19(3) should be  read as "is assessed after dissolution as, if the firm exists".  Such an addition is superfluous and serves to make the meaning of the sub-section no clearer than it is.      For these reasons, we uphold the judgment of the Bombay High Court and dismiss the appeal with costs.      GUPTA,J.-I regret my inability to agree.      This appeal  by special  leave is  directed against  an order of  the Bombay High Court dismissing the writ petition filed by  the appellants  before  us  for  quashing  certain assessment orders and demand notices issued under the Bombay Sales Tax  Acts of  1953 and  1959. Of  the five appellants, appellants 2  to S are the partners of a dissolved firm, and the  name  of  the  dissolved  firm  appears  as  the  first appellant. The  firm had another partner who died before the writ peition  was filed.  The firm,  M/s. Murarilal  Mahabir Prasad, constituted  on December  3, 1953,  used to carry on business at  Bombay as  importers and  commission agents and also as  wholesale dealers  in chemicals,  dyes and  various other goods.  The firm was registered as a dealer both under the Bombay Sales Tax Act, 1953 and the Bombay Sales Tax Act, 1959 (hereinafter  referred to  as the 1953 Act and the 1959 Act) and  had been assessed by the Sales Tax authorities for the period  from July 1953 to March 31, 1958 on the basis of the returns filed by it. On      (1) [1975] 35 S.T.C. 148 706 November 10,  1960 the  Sales Tax officer seized a number of documents from  the office  of the  firm. According  to  the appellants the firm discontinued its business from the month of May,  1961. On  May 20,  1962 the  firm was dissolved. On June 26,  1962 the  Sales Tax  officer cancelled  the firm’s registration certificate  under the Central Sales Tax Act as well as  the  registration  certificate,  authorisation  and licence under the Bombay Sales Tax Act which the partners of the firm had surrendered. On November 20, 1963 the Sales Tax officer issued  two notices  to the  firm,  one  asking  for elucidation of  certain  items  in  the  books  of  accounts seized, and  the other under sec. 15 of the 1953 Act calling upon the  firm to show cause why the assessment already made for the period April 1, 1957 to March 31, 1958 should not be reopened. It  is not  relevant to  the question  arising for decision in this case and therefore not necessary to recount all that  happened before  August 31, 1965 on which date the Sales Tax  officer   passed five  orders,  all  against  the dissolved firm:  the first  was a reassessment order for the year April  1, 1957  to March  31" 1958  on the  ground that certain sales  and purchases  during that  period  had  been concealed, and  the other  four were  assessment orders  for subsequent years  covering the  period from April l, 1958 to March 31,  1961. On  these five  orders a  total sum  of Rs. 6,56,365/47p. was  found due  from the  firm. On October 22,

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1965 the demand notices issued upon these assessment orders, all in  the name  of the dissolved firm, were affixed to the premises in  which the  firm had  its office  before it  was dissolved. The  partners of  the defunct  firm filed  a writ petition in the Bombay High Court challenging as invalid the assessment orders  and the demand notices issued in the name of the  dissolved firm  Which was  dismissed. In this appeal the appellants  question the correctness of the order of the High Court dismissing the writ petition.      The point that was usged before the High Court and also canvassed in  this appeal  is that  there  is  no  provision either in  the 1953 Act or in the 1959 Act which permits the Sales Tax  authorities to  assess or  reassess  a  dissolved firm. The  dates mentioned  above disclose that the impugned orders of the Sales Tax officer were all made after the firm was dissolved.  The respondents’ contention is that ’firm in the context  of the  1953 Act  or the 1959 Act mean Only the partners of  the firm,  and that  the firm,  if  at  all  an assessable  unit,   continues  to   be  so  even  after  its dissolution in respect of its pre-dissolution turnovers. The first question  therefore is  whether a  firm is  a distinct assessable unit  under either  of the two Acts and, if it is so, the  next question that arises is, whether it remains so even after  its dissolution. This leads to an examination of the provisions of the two Acts.      Taking the 1953 Act first, Sec. 2(6) of the Act defines a dealer.  the relevant part of the definition is as follows .      "Dealer means any person who carries on the business of      selling or  buying goods  .. and  includes any society,      club or  association which sells goods to or buys goods      from its members. 707 This definition  of dealer  does not  specifically include a firm. Under  the general  Law a firm is not a distinct legal entity but  a compendious  name for  all its  partners.  The definition includes  an association,  but it  is limited  to such associations only which sell goods to or buy goods from its members.  A firm  carrying on the business of selling or buying goods  would be a dealer according to this definition only if  it could  be called  a ’person’. The Bombay General Clauses  Act,   1094  defines  ’person’  in  sec.  3(35)  as including  "any   company  or   association   or   body   of individuals, whether  incorporated or  not". This definition of  ’person’  will  include  a  firm  which  is  a  body  of individuals "unless  there  is  anything  repugnant  in  the subject or  content" as  the opening; words of sec. 3 of the Bombay General Clauses Act indicate. it is thus necessary to find out  if there  is any  provision in  the 1953 Act which repels the notion of a firm being a ’person’.      In  this   case,  as   stated  earlier"  the  firm  was registered as  a dealer  both under  1953 and 1959 Acts, but the question  remains whether  the registration  certificate was legally for the benefit of the partners and not the firm as such.  Sec. 5  of the 1953 Act provides, inter alia, that every dealer  whose turnover exceeds the amount specified in the section  is liable  to pay  tax under  this Act  on  his turnover. Sec.  11   requires  that  a  dealer  carrying  on business and  liable to pay tax under the Act must apply for registration and  get a certificate of registration from the prescribed  authority.   Sec.  13(6)   provides   that   the prescribed authority  shall cancel  the  registration  of  a dealer  on   the  application   of  the  dealer  if  he  has discontinued or  transferred his  business, or if during any year. his  turnover does  not exceed the limits specified in

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sec. 5(1).  Sec. 13  requires  every  registered  dealer  to furnish return  of his  turnover. Sec.  14  provides,  inter alia, that  the amount  of the  tax due  from a  registered’ dealer shall  be assessed  separately for each year. Sec. 15 empowers the  Collector to  serve on  the dealer  within the period specified  in  the  section  a  notice  in  case  his turnover had  escaped assessment  and to  assess or reassess the amount  of tax  due from  such dealer.  Sec. 16 contains provisions for  the payment  and recovery  of tax.  None  of these sections  appears to  be repugnant to the firm being a dealer as defined in sec. 2(6).      It was however argued on behalf of the respondents that the definition  of ’dealer’  in sec.  2(6) which includes an association that  sells goods  to or  buys  goods  from  its members, by  implication excludes an association of persons, that a  firm is  which does  not sell goods tor or buy goods from its  members, and admittedly the firm concerned in this case did  not. This  contention is similar to that raised on behalf of  the revenue before the Bombay High Court in State v. R. M. Shah & Co. (1) and in repelling this contention the Bombay High Court observed:      "The reference  to any  society, club  or  association,      which sells  goods to or buys goods from its members in      the definition of the word dealer has a special purpose      of its own and that is to include within the definition      of the  word "sales"   made  as mentioned therein which      otherwise may  not amount  to sales  and could not have      been intended to exclude the      (1) [1958] 9 S.T.C. 683. 708      operation of  the definition  as given  in the  General      Clauses A Act. That also appears to be abundantly clear      from the  fact that dealings between the members of the      club, society  or association,  which normally  may not      amount to  sales are  intended to  be included  in  the      definition of "sale"." I think  that the  lines quoted above effectively answer the respondents’ contention.      Apart from  the provisions  we have referred to so far, there are  other sections  in the  1953 Act  which  indicate positively that a firm could be a dealer under the Act. Sec. 24 of the 1953 Act reads as follows:      "24. Dealer  to declare  the name  of  manager  of  his      business. Every,  dealer who  is liable  to pay the tax      and who is an undivided Hindu family, an association or      a club,,  society. firm  or company  or who  carries on      business as  the guardian  or trustee  or otherwise  on      behalf of  another person,  shall within the prescribed      period send  to the  prescribed authority a declaration      in the prescribed manner stating the name of the person      who shall  be deemed to be the manager of such dealer’s      business for the purposes of this Act. Such declaration      may be revised from time to time." This section  requires every dealer who is liable to pay the tax and  who is an undivided Hindu family, an association or a club,  a society,  a firm  or a  company to declare in the prescribed manner  the name  of the manager of such dealer’s business. Sec.  24 thus  makes it clear that a firm can be a dealer, and  does not  seem to be limited in its application to such  firms that  buy goods  from or  sell goods to their partners. Sec.  26(3) which is also relevant in this context provides that  when  "a  firm  liable  to  pay  the  tax  is dissolved" or  when an  undivided Hindu family liable to pay the tax  is partitioned,  "such firm  or family, as the case may be  shall be liable to pay the tax on the goods allotted

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to any  partner or  member thereof  as if the goods had been sold to such partner or member unless he holds a certificate of registration or obtains it within the prescribed period". This section  clearly indicates that a firm as such may be a dealer under the Act.      Sec. 36A  appears to  put the issue beyond doubt. It is in Chapter VIII which deals with offences and penalties. The section provides  that where  an offence  under this Act has been committed  by a  company, every  person who at the time the  offence  was  committed  was  in  charge  of,  and  was responsible to the company., as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against  and  punished  accordingly.  The  section includes an explanation which states that for the purpose of this section.  (a) "company"  means a  body  corporate.  and includes a firm or other association of individuals; and (b) "director" in  relation to  a firm  means a  partner in  the firm. This  section  making  the  persons  incharge  of  the business of the firm when the offence was committed, and the firm as  such, both  guilty  of  the  offence,  is  clearest indication that a firm as distinct from is partners could be a dealer under the 1953 Act. 709      Turning now  to the  1959 Act which came into operation from January  1, 1960,  "dealer" as defined in sec. 2(11) of this Act  is a little differently worded from the definition in the  1953 Act,  but in  substance there  is no difference between the  two. Here  also the  ’dealer’ is  a person  who carries on  the business  of buying and selling goods and it includes,  among   others,  any   society"  club   or  other association of  persons which buys goods from or sells goods to  its   members.  Here  again,  the  definition  does  not specifically mention a firm. But the 1959 Act itself defines ’person’ in  sec. 2(19), and it is not necessary to refer to the Bombay  General Clauses Act. ’Person’ as defined in sec. 2(19) inciudes  "any  company  or  association  or  body  of individuals whether  incorporated or  not,  and  also  Hindu undivided family, firm and a local authority" Sec. 18 of the 1959 Act provides:           "Notwithstanding contract  to the  contrary, where      any firm  is liable to pay tax under this Act, the firm      and each  of the  partners of the firm shall be jointly      and severally liable for such payment:           Provided that, where any such partner retires from      the firm,  he shall  be liable  to pay  the tax and the      penalty (if  any) remaining  unpaid at  the time of his      retirement,  and   any  tax  due  up  to  the  date  of      retirement though unassessed at that date." In plain  terms this  section recognizes  the liability of a firm to  pay tax  as distinct  from  the  liability  of  its partners. Clearly,  therefore" a  firm can  be a dealer also under the 1959 Act.      The question that now remains to be answered is whether a firm as such continues to be liable to pay tax under these Acts even  after  its  dissolution  on  its  pre-dissolution turnovers. Sec.  15 of  the 1953  Act provides,  inter alia, that in  the case  of escaped assessment or under-assessment or assessment  at a  lower rate or where any deductions have been wrongly  made from  the  turnover,  the  Collector  may within the period specified in the section proceed to assess or re-assess  the amount  of the  tax due  after  serving  a notice on  the dealer concerned. This is a provision, it was argued, which  shows  that  it  is  permissible  to  proceed against a  dissolved firm  because  under  the  section  the Collector can  proceed to  assess or re-assess the amount of

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tax due  within the  prescribed period, and no exception has been made for firms which may have been dissolved before the expiry of  that  time.  This  argument  overlooks  that  the foundation of  the Collector’s  jurisdiction is  the  notice which must  be served  on the  dealer before  the  Collector proceeds against  him, and  ’dealer’ has been defined in the Act as  a person  who carries  on the business of selling or buying goods.  In a  case, as  the one  before us, where the dealer was  a firm  dissolved before  the notice was issued, there is  no person  carrying on  the business of selling or buying goods  on whom  the notice  can  be  served.  If  the section admits  of a  construction as suggested on behalf of the respondents.,  then a  notice under  the section  in the name of a dead man who used to be a dealer when alive, would also be effective if issued within me specified period. I do not think that position can be maintained. The question here is not how and against whom the 710 dues of  a dissolved  firm can  be realised, but whether the firm as  such can  be proceeded  against after  it has  been dissolved. Sec.  35 of  the 1959  Act is in terms similar to sec. 15 of the 1953 Act.      Sec. 18  of the 1959 Act makes the firm as well as each of its  partners jointly  and severally  liable for  the tax payable by  the firm. Subsec. (3) of sec. 19 of the 1959 Act reads:      Where a  dealer, liable to pay tax under this Act, is a      firm, and  the firm is dissolved, then every person who      was a  partner shall be jointly and severally liable to      pay to  the extent  to which he is liable under section      18, the  tax (including  any penalty) due from the firm      under this  Act or  under any  earlier law,  up to the.      time of  dissolution, whether  such tax  (including any      penalty) has  been assessed before such dissolution but      has remained unpaid, or is assessed after dissolution." Sec. 19(3)  thus provides that on the dissolution of a firm, every  person  who  was  a  partner  shall  be  jointly  and severally liable  to pay  the tax  including any penalty due from the  firm under  the 1959  Act or under any earlier law upto the  time of  dissolution, whether  such tax  including penalty has been assessed before the dissolution of the firm and has  remained unpaid,  or is assessed after dissolution. "Earlier law"  as defined  in sec.  2(12) of  the  1959  Act includes, inter  alia the  1953 Act.  Sec. 19(3) of the 1959 Act makes  the  erstwhile  partners  jointly  and  severally liable for  the tax due from dissolved firm but does not say that assessment  or recovery proceedings may be initiated or continued against a firm as such even after its dissolution.      A Full  Bench of  the Madras  High Court  in Sales  Tax Officer v. K. M. S. Mari Chettiar(1) held that sec. 19(3) of the Bombay  Sales Tax  Act, 1959  provides a  procedure  for assessing a  defunct firm  by deeming  it as  continuing  to exist for  purposes of  assessment. This  is what  the  Full Bench observed:      "It seems  to us  that the expression "whether such tax      has been  assessed  before  such  dissolution  but  has      remained un-paid  or is  assessed after dissolution" is      clearly indicative  of the  fact that  the  legislature      addressed its  mind to assessment and collection of tax      not only  from an existing firm but also from a defunct      firm in  respect of  its  transactions  when  the  firm      existed. There  can be no doubt that charge, assessment      and collection,  though they  are all related, have got      to be  separately provided  for. But such provision may      be express or implied The implication must be clear and

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    the circumstances  should warrant  it to  be necessary.      The words  "is  assessed  after  dissolution",  to  our      minds, are  not ambiguous  and  are  capable  of  being      understood as  "is assessed after dissolution as if the      firm exists". No other construction appears to us to be      reasonable. The, object of the legislature being clear,      namely, that where the joint and several      (1) [1975] 35 S.T.C. 148. 711      liability of  the partners of a firm has been declared,      it is  followed by a provision to quantify it by laying      down the  procedure therefore and the provision so laid      down provides both for assessment and collection of tax      from a defunct firm." I do  not think  sec. 19(3) can bear such a construction. It allows the  dues of  a firm to be assessed or collected even after  its   dissolution,  but  in  my  opinion  it  is  not permissible to  read in  this provision the additional words "as if  the firm exists". To provide that the tax due from a firm may  be assessed  or collected after its dissolution is not the  same thing  as allowing  the assessment or recovery proceeding to  be started or continued against the dissolved firm. As Subba Rao J. pointed out in State of Punjab v. M/s. Jullundur  Vegetables   Syndicate,  (1)  to  which  I  shall presently  refer   in  more  detail  "the  question  of  the statutory power  of assessing a dissolved firm" is not to he ’mixed up’  with the liability of the partners. A firm under he two  Acts we  are concerned with is a distinct assessable entity; on the dissolution of the firm that entity ceases to exist, unless the statute by a fiction of law keeps it alive for any  specified purpose. For instance, Sec. 189(1) of the Income-Tax Act, 1961 states:      "Where any  business or profession carried on by a firm      has been discontinued or where a firm is dissolved, the      Income tax  officer shall  make an  assessment  of  the      total income  of the  firm as if no such discontinuance      or dissolution  had taken place, and all the provisions      of this  Act, including  the provisions relating to the      levy of a penalty or any other sum chargeable under any      provision of  this Act,  shall apply, so far as may be,      to such assessment." There is no such provision either in the 1953 or in the 1959 Act. In  this context it may be relevant to refer to sec. 34 of the 1959 Act which provides:      "Where in  respect of any tax (1)including any penalty)      due from  a dealer  under this Act or under any earlier      law, any other person is liable for the payment thereof      under sec.  19, all the relevant provisions of this Act      or, as  the case  may be,  of the earlier law, shall in      respect of such liability apply to such person also, as      if he were the dealer himself." Therefore all  the provisions  relating to the assessment or recovery of  tax including  provisions requiring  service of notice on  the assessee  would, in  the case  of a dissolved firm, apply  to the  erstwhile partners  and all proceedings intended against  the  firm  must  be  taken  against  them. Neither the 1953 Act nor the 1959 Act contains any provision permitting Assessment  or recovery  proceedings being  taken against a dissolved firm.      The cases  cited at the bar on this question may now be examined. The appellants’ case rests on the decision of this Court in State of      (1) [1966] 2 S.C.R. 457. 712 Punjab v.  M/s. Jullundur  Vegetables Syndicate  (supra). In

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this case  the respondent firm liable to pay sales tax under the East  Punjab General  Sales Tax  Act, 1948 was dissolved before assessment  was made.  The Sales  Tax officer however proceeded to  complete the  assessment against the dissolved firm. The  question therefore  arose  as  to  the  statutory rights of  a taxing  authority to assess a dissolved firm in respect of  its pre-dissolution  turnover. In  the aforesaid Act, ’dealer’  was defined  as "any  person, firm  or  Hindu Joint  Family,   engaged  in  the  business  of  selling  or supplying goods  in East  Punjab. .  .". Rule 40 of the East Punjab General Sales Tax Rules, 1949 provided that ’a dealer and his  partner or  partners shall be jointly and severally responsible for  payment of  the tax, penalty, or any amount due under  the Act  or these Rules". It was held that though under the  partnership law a firm was not a legal entity but consisted of  individual partners  for the time being, under the East  Punjab General  Sales Tax Act, 1948 it was a legal entity and, that being so, on dissolution the firm ceased to exist. It  was observed  that unless  there was  a statutory provision permitting  the assessment  of  a  dissolved  firm there was  no scope  for assessing this firm which ceased to have a  legal existence.  Referring to  rule 40  of the East Punjab General  Sales Tax Rules, 1949, it was held that this only imposed a joint and several liability on the dealer and its partners  for the  payment of tax, penalty or any amount due under  the Act or the Rules and that it did not "provide for a case of the dissolution of the firm and the assessment of the  dissolved firm". This Court held further that unless there was  a provision  expressly empowering  the  assessing authority to  assess a  dissolved firm  in  respect  of  its turnover before its dissolution or unless such a power could be  gathered   by  necessary   implication  from  the  other provisions of the Act, the assessment proceeding against the dissolved firm was not maintainable.      The decision  in Jullundur  Vegetables case (supra) was followed by this Court in Khushi Ram Bihari Lal & Co. v. The Assessing Authority  Sangrur.(1) This  also was a case under the East  Punjab General  Sales Tax  Act, 1948.  It was held that  an   assessment  of  a  dissolved  firm,  whether  the proceeding was  initiated before or after the dissolution of the firm, was unsustainable.      In Additional  Tahsildar, Raipur & Ors. v. Gendalal,(2) this Court  in an  appeal from  the  High  Court  of  Madhya Pradesh, again  following  the  Jullundur  Vegetables  case, affirmed the  decision of the High Court quashing the orders of assessment against a dissolved firm In this case the firm before its  dissolution was registered as a dealer under the Central Provinces and Berar Sales Tax Act, 1947.      It was contended before us on behalf of the respondents that though  the 1953  Act and  the 1959  Act  contained  no express provision  permitting a  dissolved firm to be taxed, it should  be held that the Acts authorised such a course by necessary implication. In answer the appellants relied on A. V. Fernandez v. State of Kerala(3) in which it was held that if the revenue satisfies the court that the case falls      (1) [1967] 19 S.T.C. 381.     (2) [1968] 21 S.T.C. 263.                    (3) [1957] S.C.R. 837. 713 strictly within  the provisions  of the  law, then  only the subject can  be taxed  and that  no tax  can be  imposed  by inference or  by analogy  or by  trying to  probe  into  the intentions of  the legislature  and by  considering what was the substance  of the  matter. This decision was followed by this  Court  in  Commissioner  of  Income-tax  v.  Provident Investment Company  Ltd  (1)  where  it  was  held  that  in

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construing fiscal statutes  and in determining the liability of the  subject to  tax, one  must have regard to the strict letter of the law and the true legal position arising out of the transaction in question.      Counsel for the respondents pointed out that this Court in Gursahai Saigal v. Commissioner of Income-tax, Punjab (2) observed referring  to A.  V. Fernandez  v. State  of Kerala (supra)  and   Commissioner  of   Income-tax  v.   Provident Investment  Company   Ltd.,  (supra)   that  the   rule   of construction stated  in these  two cases  "applies only to a taxing provision and has no application to all provisions in a taxing  statute. It  does not,  for example,  apply  to  a provision not  creating a charge for the tax but laying down the machinery  for its  calculation  or  procedure  for  its calculation. The provisions in a taxing statute dealing with the machinery  for assessment  have to  be construed  by the ordinary  rules   of  construction,   that  is  to  say,  in accordance with the clear intention of the legislature which is to  make a charge levied effective" Gurshai’s case refers to the  Judgment of  the Privy  Council in  Commissioner  of Income-tax v.  Mahali  Ram  Ramji  Das(3)  where  a  similar principle has  been stated, and the following observation of Lord  Dunedin   in  Whitney   v.  Commissioner   of   Inland Revenue(4):      "A  statute  is  designed  to  be  workable,,  and  the      interpretation thereof  by a  court should be to secure      that  object,   unless  crucial   omissions  or   clear      direction makes  that and  unattainable. Now, there are      three stages  in the  imposition of a tax; there is the      declaration of  liability, that  is  the  part  of  the      statute which  determines what  persons in  respect  of      what  property   are  liable.   Next,  there   is   the      assessment. Liability  does not  depend on  assessment.      That,  exhypothesi,   has  already   been  fixed.   But      assessment particularities the exact sum which a person      liable has to pay. Lastly come the methods of recovery,      if the person taxed. does not voluntarily pay."      On  the   authority  of  Gursahai’s  case  (supra)  was submitted that though under the Acts of 1953 and 1959 a firm might be  a separate  legal entity and a distinct assessable unit, if  its liability  to pay  tax  arose  before  it  was dissolved, we should interpret the provisions of the Acts in a manner  to effectuate  the changing provision, and that we ought  to   prefer  a  construction  which  would  make  the machinery of  assessment workable.  This only  means that we should permit  a dissolved  firm  to  be  proceeded  against because the  liability had  arisen before the dissolution. I have already said that it is open to the      (1) [1957] 32 I.T.R. 190.        (2) [1963] 48 I.T.R. 1      (3) [1940] 8 I.T.R. 442, A.I.R. 1940 P.C. 124.      (4) [1925] 10 Tax Cases 88, 110. 15-L925SupCI/75 714 legislature by  a legal  fiction to  keep alive  a dissolved firm for  some definite purpose, I have also referred to the relevant provisions  of the Acts, including those making the erstwhile partners  liable for  the dues  of  the  dissolved firm; I  have found  no provision  like sec.  189(1) of  the Indian Income-Tax  Act, 1961 in these Acts, and nothing that expressly or  by  implication  permits  action  against  the dissolved firm itself.      A dissolved  firm may  be equated  with a  dead person; both cases to be assessable units. The apprehension that the firm  may   be  dissolved  voluntarily  in  order  to  avoid liability should  not, in my opinion, make any difference in

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principle; a  man who  takes his  own life  is in  no  worse position that one who dies of a natural cause, so far as the tax dues are concerned. As for avoidance of liability, it is up to  the Legislature that created the liability to prevent evasion.  Sec.  19(3)  of  the  1959  Act  which  makes  the erstwhile partners of a dissolved firm jointly and severally liable for  the tax  (including any  penalty) due  from  the firm, was  obviously enacted  with that  purpose; but making the partners  liable for  the dues  of a dissolved firm does not mean  that the  dissolved firm  as such can be assessed. Therefore the  assessment orders made and the demand notices issued in the name of the dissolved firm in the instant case must be held to be invalid.      The appeal is accordingly allowed with costs.                            ORDER      In view  of the decision of the majority, the appeal is dismissed with costs. V.M.K.                                     Appeal dismissed. 715