Demand notices fail when underlying assessments are set aside, and partition-based tax apportionment requires notice to all affected members.

Demand notices cannot survive once the underlying assessment orders are set aside, because the notice loses its legal foundation and is unenforceable. In rectification proceedings giving effect to a recognised partition of a Hindu undivided family, tax liability must be apportioned among the members who become separately assessable, and notice must be served on all affected persons before liability is fixed. Notice only to the former karta is insufficient where he no longer represents the others. The consequential demand notices and rectification order were therefore liable to be quashed against the members not served with notice.

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Issues: (i) Whether the assessment orders and demand notices for certain years survived after the appellate authority had set aside the original assessments. (ii) Whether, in rectification proceedings giving effect to a recognised partition of a hindu undivided family, notice to all members was necessary before apportioning the tax liability and issuing demand notices.

Issue (i): Whether the assessment orders and demand notices for certain years survived after the appellate authority had set aside the original assessments.

Analysis: Once the appellate authority had set aside the assessment orders for the relevant years, the foundation of the corresponding demand notices disappeared. Demand notices can be enforced only when they rest on a subsisting assessment order; if the assessment order is annulled or set aside, the consequential demand notice cannot stand.

Conclusion: The demand notices for the years covered by the set-aside assessments were invalid and liable to be quashed.

Issue (ii): Whether, in rectification proceedings giving effect to a recognised partition of a hindu undivided family, notice to all members was necessary before apportioning the tax liability and issuing demand notices.

Analysis: After recognition of the partition, the undivided family ceased to exist and the tax liability had to be apportioned among the individual members for separate assessment. In such proceedings, notice only to the former karta was insufficient because he could no longer represent the other members. The members who were to be separately assessed were entitled to notice before an order affecting their liability was passed.

Conclusion: The rectification order and consequential demand notices could not be enforced against the members who were not issued notice, and those notices were liable to be quashed.

Final Conclusion: The petition succeeded to the extent that the consequential demand notices were struck down where the underlying assessments had been set aside or where notice had not been issued to all affected members in the rectification proceedings.

Ratio Decidendi: A demand notice cannot survive the setting aside of its assessment, and where a partition of a hindu undivided family is given effect to by apportioning tax liability among members, notice must be served on all persons whose separate liability is determined.

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