Limitation, dissolved partnership liability, and turnover proof govern sales tax reassessment and assessment of firm receipts.

A reassessment notice served within the limitation period was treated as valid, and later service of the demand notice did not change the date of the assessment order; the plea of limitation therefore failed. A dissolved partnership remained an assessable unit for sales tax because the statutory scheme treated partners as jointly and severally liable, so assessment in the firm's name continued to operate against them after dissolution. However, a receipt credited in the name of a partner with an independent business could not be included in the firm's turnover without material linking it to the partnership business, so that amount was excluded from assessment.

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Issues: (i) whether the reassessment was barred by limitation because the demand notice was served after the expiry of the statutory period; (ii) whether a dissolved partnership could still be assessed and its partners made liable for sales tax; and (iii) whether the amount received in the name of a partner having an independent business was includible in the firm's turnover.

Issue (i): whether the reassessment was barred by limitation because the demand notice was served after the expiry of the statutory period

Analysis: The notice initiating revision of assessment was issued and served within the period of limitation. The subsequent service of the demand notice did not alter the date on which the assessment order was made. The normal presumption that official acts are regularly performed was applied, and the order was accepted as having been made on the date it purported to bear.

Conclusion: The plea of limitation was rejected.

Issue (ii): whether a dissolved partnership could still be assessed and its partners made liable for sales tax

Analysis: A firm, though not a legal entity, is an assessable unit for sales tax purposes. Under the relevant rules, every partner is jointly and severally responsible for tax liability, and a report of dissolution is required to be furnished to the assessing authority. An assessment in the firm's name therefore operates against the partners even after dissolution. The absence of a special rule comparable to the Income-tax Act did not prevent assessment.

Conclusion: A dissolved partnership could validly be assessed, and the assessment was not invalid on that ground.

Issue (iii): whether the amount received in the name of a partner having an independent business was includible in the firm's turnover

Analysis: In the absence of material connecting the amount with the firm's business, and in view of the admitted independent business of the partner concerned, the receipt could not be treated as turnover of the partnership.

Conclusion: The sum of Rs. 25,108 was directed to be excluded from the assessable turnover.

Final Conclusion: The assessment was upheld in substance, but the turnover had to be revised by excluding the amount not shown to belong to the firm, resulting in only partial relief to the assessee.

Ratio Decidendi: A dissolved partnership may remain assessable for sales tax where the statutory scheme makes partners jointly and severally liable, but receipts cannot be brought into the firm's turnover without material linking them to the firm's business.

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