2025 (7) TMI 1615 - HC - GST

Seeking to set aside summoning order - also seeking a restraint upon respondents No. 1 and 2 from attaching the property which belongs to him - Liability of partners of firm to pay tax when he is retired from the firm - Liability of current and retired partners HELD THAT - The intimation of retirement of partner has to be given to the Commissioner by notice in writing and that in case no such intimation is given within one month from the date of retirement liability of such partner under first proviso shall continue until the date on which such intimation is received by the Commissioner. Perusal of two documents attached as Annexure P13 reveals that firstly a request has been addressed to the authority for updating partner detail inasmuch as Harvinder Singh (present petitioner) is stated to have retired as on 20.04.2021 with Deepak Kumar son of Sham Lal being inducted as partner and other communication also dated 28.02.2025 attached as Annexure P13 - the petitioner was unable to point out as to why such course of action could not have been adopted earlier in April 2021 or within the month thereof when he allegedly retired from the Firm. In the given factual matrix it cannot be concluded that petitioner is not liable under the Act especially in view of categoric provision of Section 90 of CGST Act 2017. Writ petition is accordingly dismissed with liberty to petitioner to avail remedy(ies) as may be available to him in accordance with law.

Summary

ISSUES:

Whether a partner who has retired from a partnership firm is liable to pay tax, interest, or penalty under the Punjab Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017, in absence of intimation of retirement to the Commissioner.Whether the failure to intimate the Commissioner about the retirement of a partner within one month affects the continuing liability of that partner under the CGST Act, 2017.Whether the writ petition is maintainable when an alternative remedy of appeal under Section 107 of the PGST Act, 2017 is available.Whether the attachment of property belonging to a retired partner is justified under the PGST Act, 2017 and CGST Act, 2017, given the circumstances of non-intimation of retirement.

RULINGS / HOLDINGS:

Under Section 90 of the CGST Act, 2017, a partner who retires from a firm remains liable to pay tax, interest, or penalty "due up to the date of his retirement" if the firm or the partner fails to intimate the Commissioner by notice in writing within one month of retirement; hence, liability continues until such intimation is received.The petitioner's argument that the firm alone was responsible for intimation and that he could not have given notice himself is rejected as devoid of merit, since the statutory provision clearly requires intimation by either the partner or the firm.The writ petition is not entertainable because a remedy of appeal under Section 107 of the PGST Act, 2017, which is a "complete code in itself," is available to the petitioner.The attachment of the petitioner's property was lawful under the recovery provisions of the PGST Act, 2017 and CGST Act, 2017, given the absence of timely intimation of retirement and the consequent continuing liability.

RATIONALE:

The Court applied the statutory framework under Section 90 of the CGST Act, 2017, which imposes joint and several liability on partners for tax dues of the firm and mandates written intimation of retirement to the Commissioner to limit liability.The Court emphasized that failure to provide such intimation within one month results in the continuation of liability until the Commissioner receives notice, placing the burden of compliance on both the partner and the firm.The Court noted the availability of a statutory appeal mechanism under Section 107 of the PGST Act, 2017, underscoring the principle that writ jurisdiction is not to be exercised where an efficacious alternative remedy exists.The Court rejected the petitioner's factual assertion that intimation was not possible earlier, highlighting that the petitioner failed to demonstrate any valid reason for delay, and that the GST portal access issue did not absolve him of statutory obligations.No dissent or doctrinal shift was noted; the judgment reaffirmed established principles of partner liability and procedural compliance under GST law.