TaxTMI 
TaxTMI 
1974 (2) TMI 93
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.... Trust, Bidar, represented by their trustees, Sri Srigopal Bhattad, and Sri Raj Kumar and Sri Kant, minors. On 19-10-1971 the last mentioned two minor partners viz., Sri Raj Kumar and Sri Kant ceased to be the partners of the firm. On 20-10-1971 the firm was reconstituted with the other seven existing partners and the newly admitted partners, Smt. Kesavbai, Sri Venugopal Inani and Sri Srigopal Inani, Sri Kailashanarayan, minor by guardian Satyanarayana Bhangadia and Sri Kachrulal, minor by guardian Smt. Sarjoobai (the last two minors being admitted to the benefits of partnership). 3. The petitioner filed notice of the change in the constitution of the firm as required under Section 63 (1) of the Indian Partnership Act (hereinafter referred to as the Act) in the office of the Registrar of Firms on 4-9-1972 The required amount towards the notice fee was also paid. But the Registrar of Firms returned the said notice to the petitioner in his letter No. F 2/8052/72 dated 30-11-1972 informing that the form V notice cannot be taken on the office record since the petitioner failed to inform the change in the constitution of the firm within 15 days from the date of the said change as req....
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....m gives a notice. He argues that the Registrar has no power to return the notice on any grounds and particularly on the ground that the notice should be given within 15 days since the section itself does not impose any such limitation. He argues that no rule can be framed beyond the scope of the section itself. It is also his submission that Section 71 of the Act which empowers the State Government to make rules does not empower the Registrar to frame rules to prescribe time-limit for the notice and hence Rule 4 (2) of the Andhra Pradesh Partnership Rules, 1957, is beyond the scope of the rule-making power under Section 71 of the Act and is ultra vires of the provisions of the Act. 6. On the other hand, the learned Government Pleader supports the validity of the rule on the ground that Section 71(2) (e) and (j) of the Act empower the Government to prescribe the period of limitation for filing the statements, intimations or notices. 7. To answer the question, it is necessary to read the relevant provisions of the Act and the rules made thereunder. Section 63 (1) of the Act reads as follows:-- "When a change occurs in the constitution of a registered firm any incoming,....
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....ndubitably in the Interest of the trading public as well as the partners. It would render easy to prove the existence of the partnership in case of disputes between the partners themselves or between the trading public and the firm. A partner who is newly introduced into the firm will be unable to claim his dues from the partners it his name is not registered in the Register of Firms. The third party who deals however with a firm without knowing the addition of a new partner or knows that a new partner has been introduced can either content himself with the security of the other partners or insist upon the registration of a new partner as a condition for further dealings. However, in the case of expelled or retired partner, it is necessary to have the changes noticed in the Register since he continues to be liable for the acts of the firm until notices were given of the retirement or expulsion. Therefore, it will be in his own interest to give immediate notice to the Registrar. Therefore, Section 63 (11 does not make it imperative but merely permissive to the partner incoming, continuing or outgoing when a change occurs in the constitution of a registered firm, to give notice to th....
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....ce of non-compliance with the provisions of the section are not found in the section itself or in the rules. Further, if the notice sent after the prescribed period of 15 days about the change is rejected, that would result in defeating the manifest purpose of the legislation, namely, to have the names of the persons entered in the Register of Firms. We are, therefore, of the opinion, that Rule 4 (2) of the Andhra Pradesh Partnership Rules is beyond the rule-making power of the State Government. 10. It would be apposite at this stage to refer to some of the decided cases on the point, in Sales Tax Officer, Ponkunnam v. K. 1. Abraham, AIR 196") SC 1-823 the question that arose was whether the third proviso to Rule 6 (1) of the Central Sales Tax (Kerala) Rules, 1957. prescribing the tune-limit within which a declaration must be filed by a registered dealer was ultra vires of Section 8 (4) read with Section 13 (4) (e) of the Central Sales Tax Act. Section 13 (4) (e) did not authorise the rule-making authority to make rules prescribing the time-limit within which declarations should be made by a dealer. The Supreme Court observed at page 1825: "The decision of the question ....