Dissolved firm assessment for pre-dissolution sales tax transactions upheld under the Bombay Sales Tax Act.

The Bombay Sales Tax Act, 1959 was construed to allow assessment of a dissolved firm for tax liabilities arising from transactions completed before dissolution. The Court applied its earlier majority view and read sections 18 and 19(3) as showing that dissolution does not defeat assessment of pre-dissolution liabilities. On that basis, the notice issued under section 33 for the relevant period was within power, and the challenge to the assessment notice failed.

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

Analysis: The Court followed its earlier majority view that the scheme of the Bombay Sales Tax Act, 1959, particularly sections 18 and 19(3), shows that dissolution of a firm does not prevent assessment for liabilities arising from transactions conducted before dissolution. On that footing, the notice issued under section 33 for the relevant period was within power.

Conclusion: A dissolved firm can be assessed to sales tax for its pre-dissolution transactions, and the challenge to the assessment notice fails.

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