Refund of Central sales tax and maintainability of rectification by dissolved firm upheld under deemed continuity for assessment purposes.

Central sales tax collected on an inter-State sale was refundable where the corresponding intra-State transaction would not have attracted local sales tax, because the tax was not legally due on such sales. Rectification applications filed by a partner of a dissolved firm were maintainable, since the statutory deeming provision treated the firm as continuing for assessment-related purposes and the dissolution did not defeat the application. The authority was therefore required to deal with the applications as those of the firm and proceed in accordance with law, including granting refund, if otherwise payable, in the name of the dissolved firm.

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Issues: (i) whether the petitioners were entitled to refund of Central sales tax paid on inter-State sales where no sales tax would have been payable had the transactions been intra-State sales; (ii) whether rectification applications filed by a partner of a dissolved firm were maintainable and required to be dealt with as applications of the firm.

Issue (i): whether the petitioners were entitled to refund of Central sales tax paid on inter-State sales where no sales tax would have been payable had the transactions been intra-State sales.

Analysis: The entitlement to refund followed the settled principle that no Central sales tax is payable on an inter-State sale if the corresponding intra-State transaction would not have attracted sales tax under the local sales law. Since the transactions, if made within the State, would not have borne tax, the Central sales tax collected on them was not legally due.

Conclusion: The petitioners were entitled to refund of the Central sales tax paid.

Issue (ii): whether rectification applications filed by a partner of a dissolved firm were maintainable and required to be dealt with as applications of the firm.

Analysis: An application for rectification under the relevant rule was treated as part of the assessment proceeding. The statutory deeming provision regarding dissolved firms required the firm to be regarded as continuing for the purpose of making the assessment order, and the applicant's description of himself as a partner of the erstwhile firm did not alter that legal position. The applications therefore could not be rejected on the ground of dissolution.

Conclusion: The rectification applications were maintainable and had to be disposed of as applications relating to the dissolved firm.

Final Conclusion: The petitioners succeeded on both the tax refund issue and the maintainability of the rectification applications, and the authority was directed to proceed in accordance with law and grant refund, if any, in the name of the dissolved firm.

Ratio Decidendi: Where a statute deems a dissolved firm to continue for assessment purposes, procedural applications connected with the assessment remain maintainable in the firm's name, and tax collected on an inter-State sale is refundable if the corresponding intra-State sale would not have attracted tax.

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