Unreported Ex-Partners: Kerala HC issues one month stay on Tax Demands [Read Order]

In a significant case, the Kerala High Court, while observing the unreported ex-partners, issued a one-month stay on tax demands. Therefore, it directed that, for a period of one month, no coercive measures should be taken against the petitioners in pursuance of the impugned Ext.P4 to Ext.P7 revenue recovery notices concerning arrears of Value Added Tax.

The writ petition was filed by N.K Jeeju one of the partners of the Firm Sree Krishna International regarding arrears of Value Added Tax for the financial years 2012–13 through 2018–19. The tax arrears pertain to the partnership document dated July 28, 2001, incorporating the company Sree Krishna International.

According to the petitioners, they retired from the firm on 31.03.2009 and, since then, never received any notice or assessment order. Biju Abraham, Counsel for the petitioner, argued that the petitioners are not liable for the amount mentioned in Ext.P4 to Ext.P7 notices, as they were no longer partners after retiring from the firm.

The Advocate General for the state submitted that, as per Rule 5 (8) (b) of KGST Rules 1963, if a partner retires without dissolving the partnership, they should send a declaration in Form 3 within 30 days, along with a copy of the deed of retirement.

The petitioners never intimated or filed any declaration in Form 3, indicating their retirement from the partnership firm. Under the KGST Act and Rules, they are still considered partners of Sree Krishna International.

After analyzing the facts and arguments, the single bench of Dinesh Kumar Singh disposed of the case with a direction for the petitioners to approach the assessing authority within ten days for obtaining the certified copy of the assessment order. After obtaining the certified copy, they should file an appeal before the appellate authority in accordance with the provisions of the law.

Therefore, the single bench directed that, for a period of one month, no coercive measures shall be taken against the petitioners in pursuance of the impugned Ext.P4 to Ext.P7 revenue recovery notices regarding arrears of Value Added Tax.

To Read the full text of the Order CLICK HERE

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