Strict liability under sales tax law upheld for partner liability, while a recurring daily fine was struck down as unauthorized.

A partner of a firm remained liable for the firm's sales tax dues under section 14(b), even as a sleeping or non-managing partner, and prosecution of every partner was not required; service of the demand notice was treated as valid. The Court also held that mens rea was not an element of the offence under section 14(b) because the provision omitted any requirement of wilful or fraudulent default, making it a strict-liability offence. However, a recurring daily fine for continuing breach was not authorised in the original order and was set aside, leaving the original fine in force.

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Issues: (i) Whether a partner of a firm could be prosecuted and held liable under section 14(b) for non-payment of sales tax, including when described as a sleeping or non-managing partner, and whether prosecution of all partners was necessary; (ii) whether mens rea was a constituent element of the offence under section 14(b); (iii) whether the order imposing a recurring daily fine for continuing breach was lawful.

Issue (i): Whether a partner of a firm could be prosecuted and held liable under section 14(b) for non-payment of sales tax, including when described as a sleeping or non-managing partner, and whether prosecution of all partners was necessary.

Analysis: The statutory scheme cast the obligation to pay sales tax on the dealer, and the definition of dealer included a firm and, in substance, the persons carrying on the business as partners. The Court treated the firm as a collective description of the partners and held that every partner of a trading partnership remained within the ambit of liability for the firm's tax dues. It further held that there was no legal rule requiring that, if one partner was prosecuted, all partners must necessarily be prosecuted together. Service of the demand notice was accepted as valid.

Conclusion: The applicant was liable under section 14(b) even if treated as a sleeping partner, and the prosecution was valid.

Issue (ii): Whether mens rea was a constituent element of the offence under section 14(b).

Analysis: The Court applied the settled principle that mens rea is ordinarily presumed to be necessary unless the statute expressly or by necessary implication excludes it. Examining section 14 as a whole, it noted that some clauses used words such as wilfully and fraudulently, while clause (b) did not. On that basis, the omission was treated as deliberate and the provision was read as creating an offence independent of guilty intention.

Conclusion: Mens rea was not required for an offence under section 14(b).

Issue (iii): Whether the order imposing a recurring daily fine for continuing breach was lawful.

Analysis: The Court construed the statutory language permitting a further fine for each day of continuing breach and held that such liability had to be enforced through a fresh prosecution, not by an automatic recurring fine in the original order. On that view, the sentence of recurring daily fine went beyond what the provision authorized.

Conclusion: The recurring daily fine was illegal and was set aside.

Final Conclusion: The conviction for non-payment of sales tax was maintained, but the daily recurring fine was struck down, leaving only the original fine in force.

Ratio Decidendi: Where the statutory language omits any requirement of wilful or intentional default, the offence is one of strict liability, and an unlawful recurring daily fine cannot be imposed except in the manner authorized by the statute.

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