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Judgment
Ramanujam, J.—One K.M. Abbu Chettiar, a manufacturer and dealer in groundnut oil, gingelly oil and oil-cake, died on 11th July, 1963.
Even before his death, he had been assessed u/s 12 of the Madras General Sales Tax Act, 1959, for the years 1959-60, 1960-61, 1961-62 and
1962-63. But subsequent to his death, there was an inspection of his residential house and in the course of such inspection, certain anamath
account books relating to his business were traced. On the basis of the entries in the said accounts, the assessing authority proposed to revise the
original assessments made for the years 1959-60 to 1962-63. u/s 16(1) of the Act. Based on the said anamath account books, the assessing
authority proceeded to make the original assessment for the year 1963-64. u/s 12. At that stage, the assessing authority issued summons in the
name of K.M. Abbu Chettiar for the production of the account books. That summons was received by one Kuppuswamy, said to be an employee
of Abbu Chettiar while he was alive and who later continued in the employ of the legal representatives in the management of the business of the
deceased. The said Kuppuswamy appeared before the assessing authority on an authorisation given by the legal representatives in form No. XIII
and produced the account books. After a perusal of the account books produced by him, the assessing authority issued notices proposing
reassessments for the years 1959-60 to 1962-63 and a notice proposing to make an assessment on the best judgment basis for the year 1963-64
on the basis of the anamath account books recovered from the residence of Abbu Chettiar. Even these notices were issued in the name of K.M.
Abbu Chettiar and served on the said Kuppuswamy. In pursuance of the above notices, Kuppuswamy filed objections to the proposed
assessment and reassessment for and on behalf of Abbu Chettiar. Thereafter, the assessing authority passed the assessment and reassessment
orders, as the case may be, in respect of the assessment years 1959-60 to 1962-63, in the name of the deceased Abbu Chettiar. In respect of
1963-64, however, the original assessment was made in the name ""K.M. Abbu Chettiar, K.M. Abbu Chettiar Estate"".
These assessments were challenged by the legal representatives not only on the merits, but also on the ground that the assessment orders are
invalid for the reason that the pre-assessment notices have not been served on the legal representatives and that the assessments having been made
on Abbu Chettiar, who died long ago on 11th July, 1963, are illegal and invalid. The appellate authority considered the assessment orders on
merits and upheld the same. He has not however considered the validity and legality of the assessment orders in any detailed manner. In the appeal
before the Tribunal, the main attack against the assessment orders was based on the above legal ground. The Tribunal by a majority judgment held
that the assessment orders are invalid on two grounds: (1) notices preceding the assessment and reassessments were not served on the legal
representatives and (2) the assessments had been made on a dead person. The correctness of the said order of the Tribunal is being challenged
before us by the revenue.
On the facts stated above, it is contended by the learned Government Pleader that the business of the deceased was continued by the widow
and daughters under the trade name K.M. Abbu Chettiar and, therefore, notices should be deemed to have been rightly issued in the name of
K.M. Abbu Chettiar. It is also contended that the assessments having been made on the trade name, they should be held to be legally valid. But on
a perusal of the orders passed by the Tribunal as well as the authorities below, it is seen that no such plea was put forward by the revenue at any
earlier stage. The Tribunal specifically proceeded on the basis that the assessments have been made in the name of the deceased dealer. That the
departmental authorities also proceeded on that basis is clear from the fact that even in the year 1965, while testing the security offered by the legal
representatives at the stage of the appeal the departmental authorities have reported that K.M. Abbu Chettiar, the dealer on whom the assessment
is made, is solvent.
The first question to be considered, therefore, is whether the assessment made on a deceased dealer without taking note of Section 15 of the
Madras General Sales Tax Act, 1959, is valid. In this case, the death of the dealer was communicated to the assessing authority on 3rd August,
1963 and on 27th September, 1963. Despite these communications about the death of the dealer, the assessing authority has chosen to make the
assessment for 1963-64 and the reassessments for the years 1959-60 to 1962-63 only as against the deceased dealer K.M. Abbu Chettiar.
Section 15 of the Act provides that ""where a dealer dies, his executor, administrator or other legal representative shall be deemed to be a dealer
for the purposes of this Act"". While so, it is not known how the assessing officer proceeded to make the assessments against the deceased dealer.
The mere fact that the legal representatives authorised the employee Kuppuswamy to produce the account books in pursuance of the summons
issued by the department prior to the pre-assessment notices will not make the assessment made against a dead person valid.
A similar case arose in Gopalkishan v. Sales Tax Officer [1968] 21 S.T.C. 109. In that case, a dealer died in 1965. A notice in the name of the
deceased was served on his sons in response to which, the sons, their accountant and their advocate appeared before the assessing authority.
After hearing their objections, the assessment was completed in the name of the deceased dealer. The question was whether such an assessment
was valid, in view of the provisions of Section 33-B of the Madhya Pradesh General Sales Tax Act, 1958, which corresponds to Section 15 of the
Madras General Sales Tax Act. The court held that in view of the said Section 33-B of that Act, the legal representative shall be deemed to be the
dealer for the purpose of the Act and that, therefore, the legal representative is the person to be proceeded against as a dealer. The court
expressed the view that not only notice should be issued to the legal representative but the assessment order also must necessarily be passed
against him.
In State of Madras v. M. Rangarajan [1968] 21 S.T.C. 186, though the question which came up for consideration was different, the following
observations made in that case as to the scope of Section 15 are apposite:
Section 15 directs that when a dealer dies his legal representative shall be deemed to be a dealer for the purposes of the Act. In view of this
deeming provision, one cannot boggle with one''s imagination and notwithstanding the deeming, revert to putative state of affairs and imagine an
assessment on a legal representative as such. For purposes of the Act, a legal representative of a deceased should be taken as a dealer and it will
be so for purposes of Section 12(3). All the provisions of the Act will apply to the deemed dealer in respect of the business of the deceased
dealer. Section 15 further provides that in respect of any tax or fee assessed as payable by such dealer or any tax or fee which would have been
payable by him under the Act if he had not died, the executor, administrator or other legal representative shall be liable to the extent of the assets of
the deceased in his hands.
We are, therefore, of the view that on the face of the provisions of Section 15 of the Act, the assessments made in these cases against the
deceased dealer cannot be upheld as valid. We confirm the order of the Tribunal setting aside the orders of assessment on the above ground.
Hence, it is unnecessary for us to specifically consider the question whether the assessment orders are bad for the reason that the pre-assessment
notices have not been served on the legal representatives.
The tax cases are dismissed. There will be no order as to costs.