Dissolved partnership firm tax liability continues for pre-dissolution turnover under Bombay sales tax law.

A dissolved partnership firm remains capable of assessment or reassessment for pre-dissolution sales tax dues under the Bombay Sales Tax Acts, 1953 and 1959. Under the 1953 Act, the firm is treated as a separate dealer and the registration, return, assessment, reassessment, recovery and penalty provisions were read as preserving liability so that charging provisions remain effective. The 1959 Act states the position more expressly by making erstwhile partners jointly and severally liable for tax due from the firm, whether assessed before or after dissolution, confirming that proceedings for earlier liabilities may continue against the dissolved firm.

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Issues: Whether a dissolved partnership firm can be assessed or reassessed to sales tax in respect of its pre-dissolution turnover under the Bombay Sales Tax Act, 1953 and the Bombay Sales Tax Act, 1959.

Analysis: Under the 1953 Act, a firm is treated as a dealer and therefore as a separate assessable unit; the scheme of registration, return, assessment, reassessment, recovery and penalties, particularly sections 5(3), 15(1), 24 and 26(3), shows that the legislature intended the firm's tax liability to survive dissolution for the purpose of enforcing pre-dissolution dues. The relevant provisions are machinery provisions and must be construed so as to make the charging provisions effective. The 1959 Act states the position even more explicitly through sections 18, 19(3) and 34, which make erstwhile partners jointly and severally liable for tax due from the firm whether assessed before or after dissolution, confirming that a dissolved firm may still be proceeded against for its earlier tax liabilities.

Conclusion: A dissolved firm can be assessed or reassessed for its pre-dissolution turnover under both Acts, and the assessment proceedings were maintainable.

Dissenting Opinion: Gupta, J. held that neither Act contains an express or implied provision authorising assessment proceedings against a dissolved firm as such. In his view, once the firm is dissolved, it ceases to exist as an assessable unit, and the liability of erstwhile partners cannot be used to continue proceedings against the dissolved firm itself. He would have held the assessment orders and demand notices invalid.

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