IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 2ND SEPTEMBER 2010 / 11TH BHADRA 1932 WP(C).No. 22521 of 2010(M) --------------------------------- PETITIONER(S): ------------------- 1. V.P.SHYAD, S/O.P.S PAREED KHAN 31/1639A, KAYYA MANZIL, S&S LANE THAMMANAM P.O., KOCHI-32 2. FAZEELA SHYAD W/O. V.P.SHYAD, 31/1639A, KAYYA MANZIL, S&S LANE THAMMANAM P.O., KOCHI-32 BY ADVS. SRI.G.SHRIKUMAR SRI.SREEJITH S.NAIR RESPONDENT(S): --------------- 1. THE ASSISTANT COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, SPECIAL CIRCLE-III ERNAKULAM, COCHIN 682 014. 2. STATE OF KERALA REPRESENTED BY THE SECRETARY DEPARTMENT OF FINANCE, GOVERNMENT SECRETARIAT THIRUVANANTHAPURAM * ADDL. R3 AND R4 IMPLEADED 3. V.P. RASHEED. KAYYA MAHAL, N.H. BYE PASS, EDAPPALLY - 24. 4. BEENA RASHEED, W/O. V.P. RASHEED, KAYYA MAHAL, N.H. BYE PASS, EDAPPALLY - 24. * ADDL. R3 AND R4 IMPLEADED AS PER ORDER DATED 28/07/2010 IN I.A. NO.10291/2010. R1 & R2 BY GOVERNMENT PLEADER SRI. C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: SVS. C.K.ABDUL REHIM, J --------------------------- W.P(C) No.22521 of 2010-M ---------------------------- Dated this the 2nd day of September, 2010. J U D G M E N T Petitioners 1 and 2 and Additional Respondents 3 and 4 were partners of a firm. It is stated that the firm was dissolved by virtue of Ext.P1, preliminary decree passed by the II Additional Sub Court, Ernakulam, in O.S.No.219 of 2007, with effect from 31.3.2004. It is further stated that the final decree proceedings is pending and that Court had already appointed a Chartered Accountant as Commission to settle the accounts of the firm. 2. Grievance of the petitioners is that, for finalising assessments under KGST Act and CST Act, the first respondent is taking steps, and Ext.P3 and P5 to P8 notices were already served on the petitioners. The notices were replied contending that the petitioners are no more continuing as partners of the firm by virtue of the preliminary decree, with effect from 31.3.2004, and hence they are not liable for payment of any tax due for the subsequent years. It is contended that the entire books of accounts of the firm are with respondents 3 and 4 and that they are purposefully withholding production of those accounts before the first W.P(C) No.22521 of 2010-M 2 respondent. Eventually, the petitioners apprehend that huge liability will be fetched upon them, if the first respondent finalizes the assessments on a best judgment basis. 3. Eventhough notices issued from this Court were served on the additional respondents 3 and 4, they have not entered appearance. Merely because the firm has been declared as dissolved through a preliminary decree, the proceedings now initiated by the first respondent for finalizing the assessments could not be hold on. At the same time, as apprehended by the petitioners, non-production of books of accounts and consequent issuance of any best judgment assessments may cause prejudice to the petitioners. 4. It is pointed out by learned Government Pleader appearing for respondents 1 and 2 that, the petitioners could not be let off from the liability, because they have not properly intimated dissolution of the firm to the first respondent, in compliance with the requirements under the relevant statute. 5. However, in this writ petition it is not necessary to decide the dispute as to whether the petitioners are liable or not. It is observed that in case of the assessments being completed, the W.P(C) No.22521 of 2010-M 3 assets of the firm shall be proceeded against for recovery of the tax amounts due, at the first instance, before proceeding with steps against the personal properties of individual partners. I am of the further opinion that since the matter now pending before the civil court necessary directions for facilitating finalisation of the assessments can be issued by that Court. The petitioners will be at liberty to approach the civil court seeking directions for production of the books of accounts and for participation in the enquiry which will be conducted by the first respondent for finalizing the assessments. If any petition is filed on this behalf, the civil court will consider the same and pass appropriate orders thereon, taking note of the observation contained herein. 6. The first respondent is directed to keep in abeyance finalization of the assessment pursuant to the notices already issued, for a period of one month from today, in order to facilitate the petitioners to approach the civil court. The writ petition is disposed of with the above observations. C.K.ABDUL REHIM, JUDGE ab