SUSANTA CHETTERJEE J. - The present rule was issued on December 18, 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 dated November 3, 1976, issued under section 16(1) of the Gift-tax Act, 1958, and the notices dated May 25, 1978, July 7, 1978, August 7, 1978, September 26,1978, November 7, 1978 and December 8, 1978, for the assessment years 1973-74 and 1974-75 and all proceedings thereunder. The impugned notices have been addressed to Messrs. Aminchand Pyarelal, registered under the Partnership Act, 1932.
Dr. Pal, learned advocate appearing for the petitioners, has argued that the petitioners are not raising any questions 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 petitioners, a partnership firm. According to him, a partnership firm is not liable to be assessed in respect of any gift under the Gift-tax Act and, as such, respondent No. 1, the Gift-tax Officer, 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 Gift-tax Act upon the writ petitioners. Further, since the petitioners are not liable under the Gift-tax 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 section 2 (xviii) of the Gift-tax Act, to indicate that a 'person' includes a Hindu undivided family or a company or an association of persons or a body of individuals or persons, whether incorporated or not.
Looking to the said definition, partnership firm cannot be termed a body of individuals or association. By way of analogy, the attention of the court has been drawn to the definition of 'person' in the Income-tax Act, 1961, which includes :
'(i) an individual, (ii) a Hindu undivided family, (iii) a company (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not (vi) a local authority, and (vii) every artificial juridical person, not falling within and 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 a body of individuals as the statutory expression is quite distinguishable as would be evident from the Income-tax Act. It would be evident from the Gift-tax Act that there is no mention of a firm and a partnership firm having an independent identity 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 v. CTO [1978] 42 STC 209, wherein the Division Bench of this court has found that, in view of the fact that, by section 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 section 2(c) of the Bengal Act, a firm cannot be treated as a separate unit for purposes of amendment to sales tax under the Act. It is further observed that, under the definition of the word 'person' in section 3(32) of the 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 body of individuals, would be a person under the definition in the General Clauses Act. A dealer being a person under the Act, it would include the partners of a firm as a body of individuals and hence a person. An application for registration under section 7 or section 8 of the Act in Form No. 1A as prescribed by rule 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 Gift-tax 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 contention 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 respondents authorities from proceeding against the partner(s) of the petitioner firm and there will be no question of limitaion or otherwise. It is also made clear that this court has not considered anything as to merits of the case in any manner.
There will be no order as to costs.