Partnership identity for sales tax turns on partnership law and factual intention, not merely identical partners.

For sales tax purposes, a firm is an assessable unit, but its legal identity is determined by partnership law unless the tax statute provides otherwise. Two partnership concerns with the same partners may still be distinct firms if the partnership agreements, surrounding circumstances, and business conduct show separate partnerships. The decisive factors are the partners' intention and the extent of interlacing or interlocking in management, finance, and other business incidents. On the material before the Court, the question whether the businesses were carried on by one partnership or two distinct partnerships required factual determination by the sales tax authorities; identical partners alone did not justify treating both turnovers as belonging to a single firm.

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Issues: Whether two partnership concerns consisting of the same partners but carrying on different businesses can be treated as distinct firms for sales tax assessment, and whether the answer depends on the partnership law and the intention of the partners.

Analysis: Under the Kerala General Sales Tax Act, 1963, a firm is an assessable entity, but the Act does not determine the legal identity of a partnership firm. That question has to be tested by the Indian Partnership Act, 1932. A partnership is the relation between persons who agree to carry on a business and share its profits, so the firm is identified by the partnership agreement and the surrounding circumstances. The same partners may constitute more than one partnership if the agreements and the conduct of the businesses show separate relationships. Whether there are one firm or two depends on the intention of the partners, the terms of the agreement, and the degree of interlacing or interlocking of management, finance, and other incidents of business.

Conclusion: The existence of one firm or two firms could not be decided on the material before the Court and required factual determination by the sales tax authorities. The assessee was not liable to have the turnover of both businesses treated as belonging to a single firm merely because the partners were identical.

Final Conclusion: The revisions failed, the remand for fresh consideration was upheld, and the dispute was sent back for determination of the factual question whether the businesses were carried on by one partnership or by two distinct partnerships.

Ratio Decidendi: For sales tax purposes, the identity of a partnership firm is governed by partnership law unless the tax statute provides otherwise, and identical partners may constitute separate firms if the partnership agreements and surrounding circumstances show distinct partnerships.

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