High Court Of Calcutta
Aminchand Pyarelal vs. Gift Tax Officer & Ors.
Section GT 2(xviii)
Asst. Year 1973-74, 1974-75
Susanta Chatterjee, J.
Civil Rule No. 9644 of 1978
24th April, 1990
Dr. D. Pal & A.K. Roychowdhury, for the Petitioners : N.L. Pal & Ramachandra Prosad, for the Respondents
SUSANTA CHATTERJEE, J.:
The present rule was issued on 18th Dec., 1978, at the instance of the writ petitioners, praying, inter alia, for a writ of mandamus commanding the respondents to cancel, withdraw, rescind and/or quash the notices dt. 3rd Nov.,1976 issued under s. 16(1)of the GT Act, 1958, and the notices dt. 25th May, 1978, 7th July, 1978, 7th Aug., 1978, 26th Sept., 1978, 7th Nov., 1978 & 8th Dec., 1978, for the asst. yrs. 1973-74 & 1974-75 and all proceedings thereunder. The impugned notices have been addressed to M/s Aminchand Pyarelal, registered under the Partnership Act, 1932.
2. Dr. Pal, learned advocate appearing for the petitioners, has argued that the petitioners are not raising any question as to the merits of the matter. Instead, the question of jurisdiction is raised as to the issuance of the impugned notices addressed to the petitioner, a partnership firm. According to him, a partnership firm is not liable to be assessed in respect of any gift under the GT Act and, as such, respondent No. 1, the GTO, Central Circle III, Calcutta, has no competence, jurisdiction and/or authority to issue the intended notices and to assume jurisdiction under the said Act for the purpose of making any assessment under the GT Act upon the writ petitioners. Further, since the petitioners are not liable under the GT Act, the impugned notices are bad in law.
In support of his contention, Dr. Pal, learned advocate for the writ petitioners, has drawn the attention of the Court to s. 2(xviii) of the GT Act, to indicate that a “person” includes an HUF or a company or an AOP or a BOI or persons, whether incorporated or not. Looking to the said definition, partnership firm cannot be termed a BOI or an association. By way of analogy, the attention of the Court has been drawn to the definition of “person” in the IT Act, 1961, which includes : “(i) an individual, (ii) an HUF, (iii) a company (iv) a firm, (v) an AOP or a BOI, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses.”
Dr. Pal, learned advocate, has laid emphasis upon the definition of a partnership firm and stated that it cannot be concluded to be BOI as the statutory expression is quite distinguishable as would be evident from the IT Act. It would be evident from the GT Act that there is no mention of a firm and a partnership firm having an independent identity (sic) to the issuance of notice and, therefore, the notice is to be treated as illegal and invalid. Further, the respondents might have grievances against the partner(s) of the firm, but the firm itself is a different entity in the eye of law and there is lack of jurisdiction to issue the notices as challenged before the Court.
The attention of the Court has also been drawn to a decision in Sri Pulak Chandra Paul vs. CTO (1978) 42 STC209 (Cal) wherein the Division Bench of this Court has found that in view of the fact that by s. 2(b) of the Bengal Finance (Sales- tax) (West Bengal Amendment) Act. 1950, “firm” has been excluded from the definition of the word “dealer” in s. 2(c) of the Bengal Act, a firm cannot be treated as a separate unit for purposes of assessment to sales-tax under that Act. It is further observed that under the definition of the word “person” in s. 3(32) of Bengal General Clauses Act, 1899, a firm is not included as a separate entity independent of the partners. The partners of a firm who constitute the firm, being a BOI would be a person under the definition in the General Clauses Act. A dealer being a person under the Bengal Act, it would include the partners of a firm as a BOI and hence a person. An application for registration under s. 7 or s. 8 of the Bengal Act in Form No. 1A as prescribed by r. 4(i) of the Bengal Sales-tax Rules, 1941, cannot be made by a firm in the firm name, but can be made only in the names of the partners of a firm. As a firm cannot be registered under the Act the question of dissolution of the firm is quite immaterial.
Mr. Prosad, learned advocate appearing for the respondents, being the gift-tax authorities, has fairly conceded that, within the definition of the GT Act, there is no expression of a firm to be included as a person against whom the impugned notices can be addressed. Thus, considering the submissions made on behalf of the respective parties and looking to the provisions of law, this Court is of the view that the respondents have got no jurisdiction to proceed with the impugned notices against the partnership firm and the contentions of the writ petitioners are upheld.
The rule is made absolute, the impugned notices are quashed, but it is made clear that the disposal of the instant rule will not prevent the respondent authorities from proceeding against the partner(s) of the petitioner firm and there will be no question of limitation or otherwise. It is also made clear that this Court has not considered anything as to the merits of the case in any manner.
7. There will be no order as to costs.
[Citation : 185 ITR 264]