Service on one representative partner is sufficient to sustain assessment and recovery against a dissolved firm's partners.

Under the Excess Profits Tax and linked income-tax provisions, a partnership firm could be assessed in its firm name, and notice served on a partner representing the firm was sufficient for assessment and recovery. Where the firm had dissolved, the partners remained jointly and severally liable, so individual notices to each partner were not necessary if valid notice had been given to a representative partner, including one acting as receiver. Service of the demand notice on that partner was treated as service on the firm and all partners, and recovery could lawfully proceed against them. The challenge based on want of notice and jurisdiction therefore failed.

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Issues: (i) Whether assessment proceedings and the consequent demand could validly bind the partners after dissolution of the firm when notice under the Excess Profits Tax Act was served only on the managing partner and receiver; (ii) Whether service of demand notice only on the managing partner and receiver satisfied the requirements of notice and recovery under the applicable income-tax provisions.

Issue (i): Whether assessment proceedings and the consequent demand could validly bind the partners after dissolution of the firm when notice under the Excess Profits Tax Act was served only on the managing partner and receiver.

Analysis: The statutory scheme under the Excess Profits Tax Act treated the person carrying on business as liable to tax, permitted assessment of a partnership in the partnership name, and, through the provisions imported from the Income-tax Act, enabled notice to be served on a partner. In the case of a dissolved firm, the applicable provisions continued to fasten joint and several liability on the partners and attracted the procedure applicable to an undissolved firm. Since notice under the relevant provisions could be served on any partner and such service was treated as sufficient for the firm, the absence of individual notices to each partner did not invalidate the assessment. The fact that the managing partner was also acting as receiver strengthened the conclusion that he could represent the partnership interests.

Conclusion: The assessment proceedings were valid and binding on the partners notwithstanding the alleged dissolution and the absence of individual notices.

Issue (ii): Whether service of demand notice only on the managing partner and receiver satisfied the requirements of notice and recovery under the applicable income-tax provisions.

Analysis: The demand provision required service on the assessee or other person liable to pay tax. The assessee being the firm, service on the partner who had been consistently representing the firm in assessment proceedings and who was also receiver was sufficient. In the circumstances, the service of demand on that partner amounted to service on the firm and, by consequence, on all the partners. The partners' joint and several liability meant that non-payment rendered each partner a defaulter, so recovery could lawfully proceed.

Conclusion: The demand notice and recovery steps were valid; individual service on each partner was not necessary.

Final Conclusion: The challenge to the assessment and recovery failed, and the writ applications were not maintainable on the ground of want of notice or jurisdiction.

Ratio Decidendi: Where a firm is assessable as such and the relevant tax provisions make partners jointly and severally liable, service of notice on a partner who represents the firm is sufficient to sustain assessment and recovery, including after dissolution of the firm.

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