K.P. Nazeer vs State of Kerala

Arijit Pasayat, C.J.—These revision applications filed u/s 41 of the Kerala General Sales Tax Act, 1963 (in short "the Act") relate to a common judgment passed by the Kerala Sales Tax Appellate Tribunal, Additional Bench, Kozhikode (in short "the Tribunal"). The dispute relates to assessment year 1986-87. Tribunal adjudicated two appeals ; one relating to the Act and the other relating to the Central Sales Tax Act, 1956 (in short "the Central Act") ; both in respect of aforesaid assessment year. The only point adjudicated by the Tribunal related to liability of the petitioner, who claimed to have retired from the partnership, Keyem Traders with effect from April 1, 1985. Appeals had been filed by the State before the Tribunal against the adjudication by the Deputy Commissioner of Appeals, Kozhikode [in short "the Dy. C. (A)"] holding that there was material to show that assessee-petitioner had retired from the partnership with effect from April 1, 1985.

In a nutshell factual position as projected by the assessee is as follows : Assessee based his claim on a deed of release and re-constitution of partnership purported to have been executed at the time of retirement to contend that he had retired from the partnership with effect from April 1, 1985. Revenue''s stand was that intimation in a particular manner as prescribed under the Kerala General Sales Tax Rules, 1963 (in short "the Rules") was required to be given in case a claim of retirement is made and same had not been given. Therefore, it was concluded that the plea of retirement was just a ruse to get over liabilities of the firm which were substantial.

There appears to be lot of controversy as to whether in fact there was any intimation given. Assessee referred to certain documents to substantiate his claim that intimation in fact had been given. Revenue''s stand as aforesaid was that on verification of records it was clearly established that no such intimation was given and, in any event, assessee failed to adduce any evidence to show that intimation had been given.

In support of the revision applications learned counsel for the assessee submitted that there is abundant material on record to establish the retirement of assessee with effect from April 1, 1985. That being the position, Tribunal was not justified in upsetting conclusion arrived at by the first appellate authority, i.e., Dy. C. (A), that assessee had retired with effect from April 1, 1985.

Learned counsel for the Revenue, on the other hand, submitted that the statutory provisions make it clear as to the manner in which intimation has to be given, and that having not been done, assessee cannot be made immune from the liability.

Section 21 of the Act and Rule 5(8)(b) of the Rules are relevant for the purpose of adjudicating the present dispute. They read as follows :

"Section 21. Liability of firms.--(1) Where any firm is liable to pay any tax, fee or other amount under this Act, the firm and each of the partners of the firm shall be jointly and severally liable for such payment.

(2) Where a partner of a firm liable to pay any tax, fee or other amount under this Act retires, he shall, notwithstanding any contract to the contrary, be liable to pay the tax, fee or other amount remaining unpaid at the time of his retirement and any tax, fee or other amount due up to the date of retirement, though unassessed."

"Rule 5(8)(b) : if a partner retires without the partnership being dissolved thereby he shall send to the registering authority a declaration in form 3 within 30 days of his retirement, along with a copy of the deed of retirement."

The intimation is to be given in form 3 which reads as follows :

"FORM No. 3 (See Rule 5) I/We (name)...............of............(address).....................hereby declare that I/we have ceased my/our connection with the above business with effect on and from

Name of person

Amount or nature of previous share in the business

(1)

(2)

Date Signature."

On a combined reading of the statutory provisions, position is clear that a partner liable to pay any tax, fee or other amount under the Act on his retirement does not cease to be liable for any amount remaining unpaid up to the date of retirement, and he continues to be liable for the tax, fee or other amount remaining unpaid at the time of his retirement, and any tax, fee or other amount due up to the date of retirement, though unassessed. Such liability exists notwithstanding any contract to the contrary. The crucial thing, therefore, is the date of retirement. Revenue can know about the retirement only if intimation as required under Rule 5(8)(b) is given. Said Rule requires that (a) the partner who retires without the partnership being dissolved shall send to the registering authority a declaration in form 3 ; (b) such declaration is to be given within 30 days of his retirement ; (c) the declaration has to be accompanied by a copy of the deed of retirement. Form 3 contains the declaration about retirement. In normal course, revenue is not expected to know as to when a person retires from a partnership unless it has information in that regard in the prescribed manner. Therefore, the rule mandates intimation to be given in a particular form within a particular time to the "registering authority", as defined in Rule 3(h).

Whether intimation has been given is a question of fact. Records of the department revealed that no such intimation was given. Assessee also did not produce any material to show that he had in fact sent it to the registering authority. Merely because some documents which, according to the assessee, established factum of his retirement were referred to, that cannot be said to be compliance with the requirement of Rule 5(8)(b). Tribunal has recorded a finding on fact that intimation had not been given.

If the statute requires a thing to be done in a particular manner, it has to be done in that manner and not in any other manner. It is now well-settled that if a statute prescribes that an act has to be done in a particular manner, that act can be done only in that manner, and in no other manner. If a statute gives a power to do a certain thing in a certain way, the thing must be done in that way or not at all and other methods of performance are necessarily forbidden. Taylor v. Taylor (1875) 1 Ch D. 426 quoted in State of Gujarat Vs. Shantilal Mangaldas and Others, and University of Kashmir and Others Vs. Dr. Mohd. Yasin and Others, In Ramchandra Keshav Adke (Dead) by Lrs. and Others Vs. Govind Joti Chavare and Others, it was observed as follows :

"A century ago, in Taylor v. Taylor (1875) 1 Ch D 426, Ind. App. Jessel, M.R. adopted the rule that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and that other methods of performance are necessarily forbidden. This rule has stood the test of time. It was applied by the Privy Council in AIR 1936 253 (Privy Council) (2) and later by this Court in several cases, Rao Shiv Bahadur Singh and Another Vs. The State of Vindhya Pradesh, , Deep Chand Vs. The State of Rajasthan, ......"

Similar view was also expressed in Narbada Prasad Vs. Chhaganlal and Others, , Parmar Himatsingh Jugatsingh Vs. Patel Harmanbhai Narsibhai, and Birad Mal Singhvi Vs. Anand Purohit, .

Looked at from any angle, there is no merit in these cases and we are not inclined to entertain the revision applications.

The application are accordingly dismissed.

An oral prayer was made for grant of leave to appeal to the Supreme Court in terms of Article 133 of the Constitution of India, 1950. We do not consider this to be a fit case for grant of such leave. Prayer is accordingly rejected.