Sales tax liability of a dissolved partnership survives dissolution, with partners remaining jointly and severally liable for assessed turnover.

A partnership firm assessed to sales tax for turnover earned during the assessment year remained liable despite later dissolution, because dissolution did not extinguish the tax already incurred and the partners were jointly and severally liable for acts done while they were partners. The transferee-liability provision was held to be supplementary, not a substitute for the charging provision, so a partner who took over assets and liabilities was not exclusively liable on that basis alone. An assessment made on the partnership as a taxable unit also was not invalid merely because the firm had ceased to exist when the order was passed. The demand and recovery proceedings against the partners were upheld.

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Issues: (i) Whether sales tax assessed on a partnership firm could be recovered from the partners after dissolution of the firm; (ii) whether the transfer of assets and liabilities to one partner attracted exclusive liability under the transferee-liability provision; (iii) whether the assessment could be invalidated on the ground that the firm was no longer in existence when the assessment order was made.

Issue (i): Whether sales tax assessed on a partnership firm could be recovered from the partners after dissolution of the firm.

Analysis: The turnover belonged to the partnership business during the assessment year, and the assessment had been validly made on the firm under the charging and assessment provisions. Dissolution did not extinguish the tax liability already incurred. A partnership firm, for sales tax purposes, was treated as the collective body of its partners, and the partners remained jointly and severally liable for liabilities arising from acts done while they were partners.

Conclusion: The liability could be recovered from the partners notwithstanding dissolution, and this issue was decided against the assessee.

Issue (ii): Whether the transfer of assets and liabilities to one partner attracted exclusive liability under the transferee-liability provision.

Analysis: The transferee-liability provision was held to be supplementary to the charging provision and not a substitute for it. It created an additional liability on the transferee without displacing the existing liability of the dealer. On the facts, dissolution of the firm and a subsequent taking over of assets and liabilities by one partner did not amount to a transfer of the business by the dealer so as to make that partner exclusively liable.

Conclusion: The transferee-liability provision did not make the partner exclusively liable, and this issue was decided against the assessee.

Issue (iii): Whether the assessment could be invalidated on the ground that the firm was no longer in existence when the assessment order was made.

Analysis: The court treated the assessment as one made on the partnership as a taxable unit represented by its partners, and not as one dependent on the continued existence of the firm name at the date of the order. Since the taxable event had occurred during the assessment year and the assessment had become final, dissolution before the assessment order did not defeat the assessment.

Conclusion: The assessment remained valid, and this issue was decided against the assessee.

Final Conclusion: The writ petition failed because the tax demand and recovery proceedings were upheld as legally sustainable against the partners of the dissolved firm.

Ratio Decidendi: For sales tax purposes, a partnership business assessed for turnover incurred during the assessment year remains liable despite later dissolution, and the partners are jointly and severally liable for that liability unless the assessment itself is successfully challenged.

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