Source: https://indiankanoon.org/doc/669054/
Timestamp: 2019-04-20 14:46:11+00:00

Document:
MURARILAL MAHABIR PRASAD & ORS.
SHRI B. R. VAD & ORS.
total sum  of Rs. 6,56,365/47p. was found due from the firm.
office before it was dissolved.
permissible to assess a dissolved firm.
and Lalji  v. The  Assistant Commissioner,  Sales Tax, Raju.
(1958) 9 S.T.C. 571 referred to.
Clauses Act,  1904 and,	 therefore, the	 word 'person' in s.
v. Amarchand N. Shroff  48 T.T.R. 59 referred to.
important clause that action thereunder can be taken by the.
Collector after	 giving a  notice to  the assessee  under s.
Bombay v.  the Provident  Investment Co.  Ltd   S.C.R.
Commissioner. Of  Income-lax Gujarat  v. M/s. B. M. Kharwar.
Commissioner v	Kripashanker   2 S.C.C.  570 Pryce  v.
Mommonthshirs	Canal and  Railway Companies   4	A.C.
197; C.I.T. Bengal v. Mahaliram. Ramjeedas 67 I.A. 239, 247.
Revenue  10 T.C.88, referred to.
is liable  to pay  is provided	by s.18.  The purpose  of s.
v. K.M.S. Mari Chettiar (1975) 35 S.T.C. 148 approved.
purpose, but  here the	legislature has not chosen to do so.
who carries  on the  business of selling or buying goods. S.
"as if the firm exists". To provide that the tax due from a.
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.
S. T. Desai, H. K. Shah, A. C. Meneses and Mahendra H. 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. 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 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)  2 S.C.R. 457.
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 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)  19 S.T.C. 381.	(2)  21 S.T.C 263.
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 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)  I.T.C. 100.
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 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)  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.
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 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.
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 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.
"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)  12 Tax Cases 358. (2) S.C.R. 837. (3) S. C. R. 1141.	(4)  1 S.C.R.700. (5)  I S.C.R. 651.	(6)  1 S.C.R. 442. (7) Wealth	Tax Commissioner vs. Kripashankar,  2 S.C.C. 570.
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)  1 S.C.R. 700, 706. (2) 67 I.A. 239, 247. (3)  S.C.R. 810, 816.
Profits Tax Officer a power to amend the assessment, when it was found that the relief granted was in excess of what the 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)  3 S.C.R. 893.	(2)  10 T.C. 88.
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.
"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.
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)  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, 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.
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 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).
"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)  9 S.T.C. 683.
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.
"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 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.
"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 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.
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.
"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 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)  35 S.T.C. 148.
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."
"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."
"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)  2 S.C.R. 457.
Punjab v. M/s. Jullundur Vegetables Syndicate	(supra). In 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)  19 S.T.C. 381.	(2)  21 S.T.C. 263. (3)  S.C.R. 837.
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 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.
"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)  32 I.T.R. 190.	(2)  48 I.T.R. 1 (3)  8 I.T.R. 442, A.I.R. 1940 P.C. 124. (4)  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 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.

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