Sales tax recovery requires notice before fastening partner liability; registration does not foreclose dealer identity inquiry.

Recovery proceedings for sales tax cannot be sustained against a person treated as a partner or dealer unless he was served with notice and given an effective opportunity to contest the foundational finding on liability. Where no notice was issued and no hearing was afforded on the question of partnership status, the recovery action is invalid. A registration certificate issued in the name of one disclosed proprietor does not conclusively determine the true identity of the dealer and does not prevent the assessing officer from examining dealer status in assessment proceedings. The operative point is that registration does not bar later inquiry, but liability cannot be fastened without procedural fairness.

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Issues: (i) Whether recovery proceedings for sales tax could be sustained against a person treated as a partner of the dealer without notice to him or an opportunity to contest his status before the assessment was made; (ii) whether the grant of registration in the name of one disclosed proprietor prevented the Sales Tax Officer from later examining the true identity of the dealer in assessment proceedings.

Issue (i): Whether recovery proceedings for sales tax could be sustained against a person treated as a partner of the dealer without notice to him or an opportunity to contest his status before the assessment was made.

Analysis: The assessment records showed that the registration application and returns were filed by one person as sole proprietor, with no disclosure that the petitioner was a partner. No notice of the assessment proceedings was served on the petitioner, nor was he given any occasion to dispute the proposed finding that he was liable as a partner. A finding fixing such liability could not bind him unless he had been heard on the question.

Conclusion: The recovery proceedings were invalid for want of notice and opportunity, and this issue was decided in favour of the petitioner.

Issue (ii): Whether the grant of registration in the name of one disclosed proprietor prevented the Sales Tax Officer from later examining the true identity of the dealer in assessment proceedings.

Analysis: The registration application required disclosure of the proprietor or partners, and section 8-A(1A) contemplated an enquiry at the registration stage. However, the grant of a registration certificate did not conclude the question of who was liable as dealer in later assessment proceedings. The officer was not precluded from examining the real identity of the dealer, especially since even an unregistered dealer remains assessable under the statute.

Conclusion: The registration certificate did not bar later examination of dealer identity, though this did not save the impugned recovery action; this issue was decided against the petitioner.

Final Conclusion: The impugned recovery measures could not stand because liability was fastened without affording the petitioner an opportunity to contest the foundational finding on partnership and dealer status.

Ratio Decidendi: A person cannot be subjected to recovery as a partner or dealer on the basis of an assessment finding against him unless he was given notice and an effective opportunity to contest the fact on which liability is founded; registration proceedings do not by themselves foreclose later determination of the true dealer in assessment proceedings.

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