Dissolved partnership tax assessment barred absent express statute, and prior writ by one partner did not create res judicata.

A dissolved partnership ceases to exist as a taxable entity, so assessment orders passed against it after dissolution were void in the absence of an express statutory provision authorising assessment of a dissolved firm. The Court held that the same principle applies whether the assessment proceedings began before or after dissolution, unless the statute provides otherwise, and the orders were rightly quashed. The earlier writ petition filed by one partner did not operate as res judicata against another partner, because res judicata binds only parties and privies, and no subsisting agency or derivation of title was shown after dissolution. The challenge to the assessments therefore succeeded.

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Issues: (i) whether assessment orders passed against a partnership after its dissolution were valid in the absence of a statutory provision authorising assessment of a dissolved firm; (ii) whether the dismissal of an earlier writ petition filed by one partner operated as res judicata against another partner challenging the same assessment orders.

Issue (i): whether assessment orders passed against a partnership after its dissolution were valid in the absence of a statutory provision authorising assessment of a dissolved firm.

Analysis: Once the partnership was dissolved, it ceased to exist as a legal entity for tax purposes. A firm may be assessed while it subsists, but after dissolution there can be no assessment of the firm unless the statute expressly permits such assessment. The Court applied the principle that there is no distinction in this respect between proceedings commenced before dissolution and those initiated after dissolution, in the absence of an express enabling provision.

Conclusion: The assessment orders were void and were rightly quashed. The finding was in favour of the assessee.

Issue (ii): whether the dismissal of an earlier writ petition filed by one partner operated as res judicata against another partner challenging the same assessment orders.

Analysis: The earlier decision bound only the parties and privies. After dissolution there was no subsisting agency between the partners, and the respondent did not claim through the partner whose writ had earlier failed. On that basis, the earlier judgment could not be treated as binding on the respondent.

Conclusion: The plea of res judicata failed. The finding was in favour of the assessee.

Final Conclusion: The challenge to the assessment orders succeeded because the dissolved firm could not be assessed in the absence of statutory authority, and the prior writ petition by another partner did not bar the present proceedings.

Ratio Decidendi: A dissolved partnership cannot be assessed as an existing taxable entity unless the statute expressly authorises assessment after dissolution, and res judicata binds only parties and privies.

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