The Judgment of the Court was delivered by

V.P Gopalan Nambiyar, C.J:— The question raised in this tax revision case is whether a dissolved firm can be subjected to assessment under the provisions of the General Sales Tax Act, 1125. The Tribunal held that it could not be so assessed; and against the order of the Tribunal, the State has preferred this revision.

2. The assessment year here with which we are concerned is 1962-63. The firm, which was the assessee, was dissolved on 1st April, 1965, and the assessment was completed subsequent to the dissolution, i.e, on 17th October, 1968. As the proceedings related to the assessment year 1962-63 and as the Kerala General Sales Tax Act, 1963, came into force only on 1st April, 1963, it is common ground that the question has to be decided with respect to the provisions of the General Sales Tax Act, 1125. We may even here observe that in the General Sales Tax Act, 1963, a provision was added in 1969, by the amending Act 15 of 1969, with retrospective effect from 1st April, 1963, to provide for the assessment of a dissolved firm. That provision was section 21A of the Act.

3. With respect to the provisions of the General Sales Tax Act, 1125, there was a decision in Sales Tax Officer, Special Circle, Kozhikode v. K.S.V Gupta [1971] 28 S.T.C 722 at 727., by a Division Bench of this Court, which took the view that a dissolved firm cannot be assessed to sales tax under the General Sales Tax Act, 1125. The relevant observation in the said decision is to be found at page 727:

“………That being so, the proceedings for the levy of the tax for the year 1962-63 can only be regarded as maintainable under the provisions of the 1125 Act, and that Act not providing for a levy on a dissolved firm, the rule in State Of Punjab v. Jullundur Vegetables Syndicate. [1966] 17 S.T.C 326 S.C. still applies to make the assessment invalid. The amendment of the 1963 Act by the introduction of the new section 21A and the validation of assessment made under the 1963 Act by section 7 of the Amendment Act, it is obvious, can be of no avail to validate an assessment made under the provisions of the Act of 1125.”

4. The position was no doubt succinctly stated, but the ruling is that of a Division Bench of this Court. The question came up again before a learned Judge of this court in K. Aboo v. Sales Tax Officer Page 478 infra; 1969 K.L.R 807.. The learned Judge in that case examined the decision of the Supreme Court in State Of Punjab v. Jullundur Vegetables Syndicate., where Subba Rao, J., speaking for the court, observed that a dissolved firm cannot be subjected to assessment, and it makes no difference whether the assessment proceedings were started prior to the dissolution of the firm and closed after the dissolution or whether they commenced after the dissolution of the firm. The Supreme Court observed that unless there is a specific provision for making an assessment, a taxing statute cannot be interpreted to widen its scope against the assessee; but on the contrary has to be so interpreted as to benefit the taxpayer. In a later decision of the Supreme Court in Khushi Ram Behari Lal & Co. v. Assessing Authority, Sangrur, that court reaffirmed its earlier decision in State Of Punjab v. Jullundur Vegetables Syndicate.. Both these decisions were noticed by the learned single Judge in Aboo's case. In that case, it was held, overruling the contention, of the revenue, that the provisions of rules 35 to 37 of the Kerala General Sales Tax Rules providing for joint and several liability of partners, the report of dissolution and discontinuance of the business were inadequate to constitute sufficient specific provision within the meaning of the principle expounded by the Supreme Court in the Jullundur Vegetables Syndicate's case. The decision in Aboo's case was followed by a Division Bench of this Court in P.C Assankutty v. The Sales Tax Officer, Badagara Page 481 infra. (W.A Nos. 148, 193 and 216 of 1971). That decision noticed many other decisions and affirmed the view taken in K. Aboo v. Sales Tax Officer. So that, as far as this court is concerned, there are at least three decisions, one by a single Judge and two by Division Benches, which have taken the view that an assessment of a dissolved firm is not permissible under the 1125 Act.

5. The principle of the above rulings is fully supported by the decision of the Supreme Court in Jullundur Vegetables Syndicate's case, which was indeed the foundation of the decision in the above three cases. But the learned Government Pleader submitted that the ratio of the Supreme Court decision in Vegetables Syndicate's case has been shaken by the recent ruling in Murarilal Mahabir Prasad v. B.R Vad [1976] 37 S.T.C 77 S.C.. The question there arose whether assessment or reassessment of a dissolved firm could be taken under the provisions of the Bombay Acts of 1953 and 1959. The Supreme Court referred to the prior ruling of the court in Jullundur Vegetables Syndicate's case and pointed out that it was the direct authority for the four propositions, viz., (1) a dissolved, firm cannot be assessed to sales tax unless the statute under which the assessment is made authorises the assessment either expressly or impliedly; (2) if, by definition, a firm is a dealer under the Act, it becomes a legal entity or an independent assessable unit for the purposes of the Act. If that be so, it ceased to be a legal etityn on dissolution and, thereafter, on principle it cannot be assessed to sales tax unless the statute authorised it expressly or by necessary implication; (3) neither a provision requiring a dealer to inform the authorities of the discontinuance of business, nor one imposing a joint and several liability on the dealer and its partners for payment of tax or penalty can be interpreted as conferring jurisdiction to assess a dissolved firm; and (4) in interpreting a fiscal statute, the court cannot proceed to make good the deficiencies, if any, in the statute. In the light of the ratio of Jullundur Vegetables Syndicates case, the provisions of the Bombay Act were examined. It was noticed that the definition of “dealer” included a firm, either on the express provisions of the statute, as in the 1959 Act, or by applying the provisions of the General Clauses Act, as in the case of the 1953 Act. Section 5(3) of the 1953 Act provided that every dealer who is liable to pay tax shall continue to be so liable until cancellation of his registration under sub-section (6) of section 11 and, upon such cancellation, his liability to pay the tax shall cease. The Supreme Court stressed the above provision as showing that if a firm had liability to pay sales tax that liability continues until cancellation of the registration. There may be a hiatus between the dissolution of the firm and the cancellation of its registration. Section 15(1) of the 1953 Act provided for escaped turnover assessment. On an analysis of the section, it was stressed by the Supreme Court that the section contained a clear and necessary implication that even a dissolved firm can be assessed or reassessed within the period provided by the section and that the dissolution of the firm cannot operate to bar the exercise of the power to reopen an assessment. There was one more section which was considered important by the Supreme Court and that was section 26, sub-sections (3)(i) and (3)(ii). These provisions enacted that a firm liable to pay tax if dissolved shall be liable to pay tax on the goods allotted to any partner as if the goods had been sold to such partner. The Supreme Court pointed out that the provision in terms envisaged the assessment of a dissolved firm though only to a limited extent and for a limited purpose. The 1959 Bombay Act presented no difficulty as its provisions were clearer and stronger than the 1953 Act. It was on an analysis of the various statutory provisions that the Supreme Court's conclusion was rested.

6. Proceeding to compare the provisions of the statute considered by the Supreme Court with the provisions of the General Sales Tax Act, 1125, we are struck by the significant aspects of the two statutory provisions on which considerable stress was laid by the Supreme Court in Murarilal Mahabir Prasad's case, viz., sections 5(3) and 26(3)(i) and (3)(ii). There is nothing corresponding to these provisions in the 1125 Act. The learned Government Pleader commended to us that the remaining provisions would be sufficient to sustain the conclusion reached by the Supreme Court in the later decision. In particular, he stressed the provisions of rule 33 of the General Sales Tax Act, which provide for assessment of escaped turnover, and the provisions of rules 34 to 37. Of these, rules 35 to 37 were noticed in Aboo's case and in P.C Assankutty v. The Sales Tax Officer, Badagara (W.A Nos. 148, 193 and 216 of 1971). We are in agreement with these decisions that these provisions are insufficient to sustain the conclusion that a dissolved firm can be subjected to assessment or reassessment. They do not, in our view, constitute a sufficient express or implied provision within the meaning of the rule laid down by the Supreme Court in Jullundur Vegetables Syndicate's case. The principle as such was not departed from, but was only reaffirmed by the Supreme Court in its later decision in Murarilal Mahabir Prasad v. B.R Vad.

7. Then the only question is whether rules 33 and 34 thrown in, can make any difference to the conclusion. We are of the opinion that they cannot turn the scale in favour of the revenue. These, in our opinion, are insufficient to constitute a clear, express or sufficiently implied provision to warrant the conclusion that a dissolved firm can be subjected to assessment.

8. In the result, we are of the view that the Tribunal was correct in its conclusion. We affirm the'same and dismiss this tax revision case, in the circumstances without costs.

9. Petition dismissed.