Joint and several partner liability permits demand notices for discontinued firm tax without fresh assessment or implied time limit.
When a firm discontinues business, the partners become jointly and severally liable for the tax assessed on the firm, and a demand notice may be served on them as persons liable without a fresh assessment order against each partner. The provision discussed does not prescribe any limitation period for service of the demand notice, and delay alone does not invalidate it absent prejudice or a statutory bar. Omission to state the recipient's status in the notice does not vitiate recovery where the basis of liability is otherwise clear. Because liability is joint and several, the revenue may proceed separately against individual partners rather than by one joint notice.
Issues: (i) Whether a notice of demand under section 29 of the Income-tax Act, 1922 could validly be issued to the partners of a discontinued firm without a separate assessment order against them; (ii) whether such notice was invalid because it was issued long after the assessment of the firm; (iii) whether omission to mention the status of the person in the notice vitiated it; and (iv) whether separate notices could be served on the individual partners instead of one joint notice.
Issue (i): Whether a notice of demand under section 29 of the Income-tax Act, 1922 could validly be issued to the partners of a discontinued firm without a separate assessment order against them.
Analysis: Liability under section 44 arises on the discontinuance of the firm's business and makes the partners jointly and severally liable for the tax assessed on the firm. The demand under section 29 need not rest on a fresh assessment against each partner, because the section authorises service of notice on the assessee or other person liable to pay the amount due in consequence of an order passed under the Act. A person proceeded against under section 44 falls within the statutory concept of an assessee for this purpose.
Conclusion: The notice of demand was valid and was not invalid merely because there was no separate assessment order against the partners.
Issue (ii): Whether such notice was invalid because it was issued long after the assessment of the firm.
Analysis: Section 29 prescribes no period of limitation for service of a demand notice. The Court declined to read into the provision a judicially created requirement of issue within a reasonable time. On the facts, the notice was issued shortly after the earlier decision concerning recovery from the firm's partners, and in any event the interval was not unreasonable.
Conclusion: The notice was not invalid on the ground of delay.
Issue (iii): Whether omission to mention the status of the person in the notice vitiated it.
Analysis: The printed form contained a column for status, but that requirement was material in ordinary assessments under sections 3 and 23, not where recovery was being made from partners under section 44 for tax already assessed on the firm. The covering letter and surrounding circumstances made the basis of the demand clear, and no prejudice was shown.
Conclusion: The omission did not vitiate the notice.
Issue (iv): Whether separate notices could be served on the individual partners instead of one joint notice.
Analysis: The liability under section 44 is joint and several, which permits recovery from the joint assets or from any partner individually. The officer was therefore entitled to proceed separately against the partners.
Conclusion: Separate notices on the individual partners were valid.
Final Conclusion: The challenge to the recovery notices failed on all grounds, and the writ petition was dismissed.
Ratio Decidendi: Where a firm has discontinued business, partners are jointly and severally liable for the firm's assessed tax, and a notice of demand under section 29 may validly be served on them as persons liable without a fresh assessment, without any implied limitation period, and either jointly or severally.