Tax arrear recovery requires statutory authority; partnership non-registration does not defeat firm ownership of property.

Recovery of sales tax arrears under the Puducherry VAT Act had to be undertaken only by the officers and through the procedure specifically authorised by that statute and the Revenue Recovery Act; notices issued by the Deputy Tahsildar without such authority were invalid and liable to be set aside. The court also treated section 69 of the Partnership Act as only disabling an unregistered firm from enforcing contractual rights, not as preventing acquisition or ownership of property, and held that registration after purchase did not affect title. The attachment was therefore unsustainable, though revenue could proceed against the individual assessee in accordance with law.

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Issues: (i) Whether the impugned attachment notices for recovery of sales tax arrears were issued by the proper authority and in accordance with the procedure prescribed under the Puducherry Value Added Tax Act, 2007 and the Puducherry Revenue Recovery Act, 1970. (ii) Whether the attachment could be sustained against the properties on the ground that the firm acquired them before its registration under the Indian Partnership Act, 1932.

Issue (i): Whether the impugned attachment notices for recovery of sales tax arrears were issued by the proper authority and in accordance with the procedure prescribed under the Puducherry Value Added Tax Act, 2007 and the Puducherry Revenue Recovery Act, 1970.

Analysis: The recovery scheme under Chapter V of the Puducherry Value Added Tax Act, 2007 was read with Section 37(3), under which dues are recoverable as arrears of land revenue, and Section 42, which specifically entrusts recovery powers to specified officers of the Commercial Taxes Department. The procedure under the Puducherry Revenue Recovery Act, 1970 was held to operate through those designated officers, and the powers under Sections 25 to 29 of that Act were not available to the Deputy Tahsildar in the manner in which the impugned notices were issued.

Conclusion: The notices of attachment were not lawfully issued by the Deputy Tahsildar and were liable to be set aside.

Issue (ii): Whether the attachment could be sustained against the properties on the ground that the firm acquired them before its registration under the Indian Partnership Act, 1932.

Analysis: Section 69 of the Indian Partnership Act, 1932 was construed as creating only a disability on an unregistered firm from enforcing contractual rights, not as imposing a bar on acquisition or ownership of property. Section 69(3) expressly preserves the right or power of a firm to acquire property, and the fact that registration occurred after purchase did not affect title to the assets.

Conclusion: The properties belonged to the firm, and the attachment could not be sustained on the ground of prior non-registration.

Final Conclusion: The writ petitions succeeded and the impugned attachment was directed to be lifted, while leaving the revenue free to proceed against the individual assessee in accordance with law.

Ratio Decidendi: Recovery of tax arrears must be made only by the authority and through the procedure specifically designated by the taxing statute, and non-registration of a partnership does not prevent it from acquiring or owning property.

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