1. The question raised in this application under Section 8 of the West Bengal Taxation Tribunal Act, 1987, being for all purposes an application under Articles 226 and 227 of the Constitution of India, is : Whether the orders of assessment and determination of interest under the Bengal Finance (Sales Tax) Act, 1941 (in short, "the 1941 Act") dated June 18, 1992 for the period of four quarters ending March 31, 1988 and the consequential notices of demand are invalid for mentioning therein the "trustees" N.M. Jain and another as "partners".
2. The applicant's case is that the first applicant is a trust (of which the second applicant N.M. Jain is one of the two trustees, the other being P.D. Surana) which carries on the business, inter alia, of resale of motor parts in the trade name of "Power Sales & Service" and is a dealer registered under the 1941 Act and then under the West Bengal (Sales Tax) Act, 1994. But the order of assessment dated June 18, 1992 under 1941 Act was made by respondent No. 1 and the consequential notices of demand were issued for the period of four quarters ending March 31, 1988 mentioning that the second applicant N.M. Jain was a partner of the business. The assessment was initiated by a notice in form VI where the second applicant was described similarly. "In an effort to keep the record straight and according to law", the first applicant filed an appeal on that ground, but it was rejected by respondent No. 2 allegedly in an arbitrary manner. The first applicant did not get favourable result even by filing a revision before the West Bengal Commercial Taxes Appellate and Revisional Board (in short, "the Board"). It is claimed that the trust has been carrying on the business, while N.M. Jain and P.D. Surana are trustees. Hence the order of assessment and levy of interest are alleged to be illegal and void. The applicants have referred to the definitions of "dealer" and "business" in 1941 Act as also to Section 11A of that Act in support of their contention. Reference is also made to the fact that the dealer's registration certificate was issued to Kasturi Devi Jain Trust carrying on business under the trade name of Power Sales and Service--trustees being N.M. Jain and P.D. Surana. Hence, actions taken against them in their personal capacity are said to be illegal, and beyond respondent No. 1's jurisdiction.
3. On the date of hearing, arguments were advanced on behalf of the applicants and respondents in full. The learned State Representative appearing on behalf of the respondents justified the appellate order dated September 1, 1993 and the revisional order of the Board dated April 9, 1998. The learned advocate of the applicants contended on the lines of the grounds stated in the application.
4. The dealer's registration certificate dated November 21, 1975 issued under 1941 Act is at annexure "A". It had been granted to "Sri Navaratanmal Jain and Sri Purshotamdas Surana, trustees of Kasturi Devi Jain Trust carrying on business under the trade name of Power Sales & Service......". Annexure "B" is the notice in form VI for assessment for the impugned period. It was addressed to "Sri N.M. Jain, partner and others carrying on business under the trade name of Power Sales Corporation". The order of assessment dated June 18, 1992, however, was passed by describing the dealer in the same way as in form VII (see page 20, annexure B). In that order of assessment, the trade name was correctly written as "Power Sales & Service". We have noticed that in form VII, demanding assessed tax, apart from wrongly mentioning N.M.Jain and others as partners, there was an incorrect description of the trade name which was written as "Power Sales Corporation". In form VII-L demanding interest, only the trade name was mentioned without any reference to the trust or trustees or even "partners", but even the trade name was also wrongly described as "Power Sales Corporation". It should be mentioned at this stage that the mistake in describing the trade name was absolutely ignored by the applicants, because no grievance was made before us at the time of hearing on that score.
However, such descriptions clearly establish sheer negligence on the part of the assessing authority.
5. An appeal was preferred by the applicant before respondent No. 2, Assistant Commissioner, Commercial Taxes, Chowringhee Circle. In that appeal (annexure C, pages 22 and 23) the sole ground taken was that the notice in form VI, the order of assessment and the notice of demand, were all issued/made against the trustees in their individual capacity and not against the real owner, namely, the trust, owning the business.
Respondent No. 2, the appellate authority, held that the applicant No.1 appeared through representatives at the time of hearing of the assessment case and the levy of interest, and "he did not raise any objection as to the infirmity in the initiation notices in form VI". He noted the fact that his predecessor-in-office while hearing the stay petition, passed an order dated January 28, 1993. By the said order, the then appellate authority wanted to dispose of the appeal "outright". However, revised forms VII and VII-L were issued by the assessing authority in the names of trustees. It was also noted that the first applicant "appeared to have received revised forms VII and VII-L on June 22, 1993". Thereafter, respondent No. 2 held that assessment made without service of form VI or with an improper form VI may be at best an irregularity ; it does not touch the jurisdiction of respondent No. 1 to assess. As the dealer had not raised any objection for irregular service of notice in form VI, he could not be allowed to plead that a proper form VI was not served. Thus, respondent No. 2 confirmed the order of assessment. Being aggrieved by that order, applicant-dealer preferred a statutory revision before the West Bengal Commercial Taxes Tribunal which has since been renamed as the West Bengal Commercial Taxes Appellate and Revisional Board (or, in short, "the Board"). In the application for revision before the Board, basically the same ground was taken by dealer. It was contended that by appearing before the assessing authority, dealer could not be said to have accepted the jurisdiction of respondent No. 1, because there was allegedly "inherent lack of jurisdiction". It was also contended that issuance of fresh notices of demand in forms VII and VII-L on June 21, 1993 could not rectify the legal infirmity committed by violating Section 11A(1) of 1941 Act. A judgment of the Supreme Court in the case of Kiran Singh v. Chaman Paswan reported in AIR 1954 SC 340 was relied on, in which it was laid down that a decree passed without jurisdiction is a nullity and its invalidity could be set up at any stage when such a decree is sought to be enforced or relied upon. The dealer also referred to an order of a single Member of the Board (when it was called Tribunal) in revision case Nos. 984 and 985 of 1986-87. The revision was dismissed by the Board by order dated April 9, 1998 on the basis of an order dated December 26, 1995 passed by a two-Member Bench of the Board reported in (1996) 29 STA 53 (Power Sales & Service v.A.C.C.T., Chowringhee Circle). That was also a case of the present applicant, The two-Member Bench of the Board referred to the definition of "trustees" in Stroud's Judicial Dictionary, the definition of "partner" in Collins Gem English Dictionary and a judgment of this Tribunal in the case of C. Voopen & Co. v. Commercial Tax Officer, Amratala Charge, reported in [1989] 75 STC 334 ; (1989) 22 STA 282 wherein it was held that while clubbing of assessment for four years was in contravention of the statutory provision, there was no lack of jurisdiction to make assessment. The said Bench of the Board also referred to a judgment of the Supreme Court in Central Potteries Ltd. v. State of Maharashtra [1962] 13 STC 472, where a distinction between want of jurisdiction and irregular assumption of jurisdiction was pointed out. It was laid down therein that an order passed by an authority with respect to a matter over which it had no jurisdiction, is a nullity ; but an order passed by an authority having jurisdiction over the matter, but assuming it otherwise than in the mode prescribed by law, is not a nullity. After referring to all those authorities and precedent cases, the two-Member Bench of the Board held that non-description of the correct status of the trustees in the assessment notice in form VI and in the subsequent proceedings does not vitiate the proceedings or oust the competence of the assessing authority, particularly in view of the fact that after receipt of the notice in form VI no objection was raised by the dealer (the same dealer who is also the applicant here).
6. The object of a notice in form VI is to make it known to the dealer on whom the notice is served, that an assessment proceeding is started.
That object was duly fulfilled in the present case which concerns assessment of the period of four quarters ending March 31, 1988 under the 1941 Act. Although in the notice in form VI, N.M. Jain was described as a partner, the trade name was correctly described as "Power Sales & Service". On receipt of this notice Sri Chinmoy Chakraborty appeared at the hearing of the assessment case as authorised representative of the applicant-dealer. No objection was raised to the defect in the notice. Books of account and other documents were produced and examined. Hence, the notice had served its purpose. It cannot, therefore, be said that the notice in form VI was invalid. After the order of assessment was made, the applicant-dealer has been taking the plea of illegality of the proceedings on the ground that the dealer has been wrongly described. In other words, the ground of appeal and revision and also of the present application before us, is that N.M. Jain and P.D. Surana were trustees, but they were described as partners. There is no doubt that such description of trustees as partners is erroneous. But should merely such an error vitiate the order of assessment 7. It is to be remembered that before final disposal of the appeal from the order of assessment, the notices of demand were revised by issuing fresh notices in form VII and form VII-L by describing the dealer correctly, namely, by describing N.M. Jain and others as trustees.
There is no dispute about this factual position.
8. "Dealer" was defined in 1941 Act in Section 2(c) as "any person who carries on the business..................", and a "dealer" also includes "a trust or other body corporate.....................".
Therefore, any person is a dealer and a trust is also a dealer.
Applicants strongly relied on Section 11A not only at the time of hearing before us, but also at the stages of appeal and revision. The relevant portion of Section 11A of 1941 Act is quoted below : "Action taken and proceedings commenced or continued in the trade name of a business.--Notwithstanding anything contained in any law for the time being in force, in respect of any business carried on under a trade name,-- (1) any action may be taken under this Act in any matter connected with the purposes of this Act including the realisation of taxes or penalty, and proceedings for the recovery of any such taxes or penalty may be commenced or continued under any law against the person owning the business." Since a trust is claimed to be the dealer under Section 2(c) of 1941 Act, and since the name of Kasturi Devi Jain Trust was mentioned in the registration certificate, armexure A, it must be held that the said trust represented by N.M. Jain and P.D. Surana, trustees, is the dealer in respect of the business carried on in the trade name of Power Sales & Service. As already held, the error in the designation of N.M. Jain and others in the notice in form VI (notice of assessment case) was there, but such error did not vitiate the notice, because the object of the notice had been fulfilled by the conduct of the dealer. The order of assessment carried the same error as in form VI. Therefore, when the object of the notice was fulfilled and no prejudice was caused to the dealer, there could be no prejudice also, when the order of assessment was made with the same error of description of the dealer. The error was partly rectified by issuance of fresh notice of demand in form VII and form VII-L by correctly describing the trustees. We approve of the view taken by the two-Member Bench of the Board in its order dated December 26, 1995, reported in (1996) 29 STC 53 (Power Sales & Service v. A.C.C.T. Chowringhee Circle) in this connection. There was no want of jurisdiction on the part of respondent No. 1 in spite of his commission of error in description. In our considered opinion, the order of assessment cannot be said to be vitiated for the misdescription of the trustees as partners.
9. Section 11A(1) clearly lays down that when a business is carried on under a trade name, action may be taken in connection with the purposes of 1941 Act including the realisation of taxes or penalty and proceedings for recovery thereof against "the person owning the business". It is to be noticed that Section 11A(1) does not mention the expression "dealer". It mentions the expression "the person owning the business". Now, in respect of the business under the trade name of Power Sales & Service, who is the person or persons owning the business The applicant No. 2 is N.M. Jain who admits to be a trustee. He was wrongly described as a partner. But who is the owner of the business Is it the trust or the trustee In this respect reference should be made to the definitions of "trustee" and "trust" in Section 3 of the Indian Trusts Act, 1882. Under those definitions, a "trust" is an "obligation" annexed to the ownership of the property for the beneficial enjoyment of the person for whose benefit the confidence is accepted by the trustee. It is the trustees who are legally owners of the trust property which vests in them, because the author of the trust reposed or declared his confidence in the trustees who accepted that confidence. The trust is not a juristic person. By the very nature of such relationship, the subject-matter of the trust, which is called "the trust property" is transferred to the joint ownership (not to any single trustee) of the trustees. This principle and interpretation can be found from Chhatra Kumari Devi v. Mohan Bikram Shah AIR 1931 PC 196, which was followed in Ram Dass Trust v. Damodardas 1967 Raj LW 273 and the case of Kansara Abdulrehman Sadruddin v. Trustees of the Maniar Jamat, Ahmedabad AIR 1968 Guj 184 at 187 [see serial No. 13 at pages 66 and 67 of N. Suryanaraya Iyer's "The Indian Trust Act" Fourth Edition, Second Reprint, 1997]. Therefore, under the law the trustees, N.M. Jain (applicant No. 2), and P.D. Surana are owners of the business under the trade name of Power Sales & Service. That being the correct position, realisation of taxes and penalty can be made and continued against the trustees who are under the law, the owners of the aforesaid business.
10. In the result, the application is dismissed. Respondent No. 1 is directed to correct the order of assessment by substituting the designation of N.M. Jain as "trustee" in place of "partner". This direction is given merely for removing the innocuous error. No order is made for cost.