The Punjab & Haryana High Court has held that failure to notify change in partnership makes retired partners liable for GST dues.
The bench of Justice Lisa Gill and Justice Sudeepti Sharma has observed that 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.
A partnership Firm was constituted by the present petitioner and one Puneet Singla son of Bhim Singh, Deepak Nagpal son of Jogender Nagpal and Gurvinder Singh son of Gurdev Singh. Land belonging to petitioner and other partner Gurvinder Singh son of Gurdev Singh was taken on rent by the Firm vide agreement dated 16.02.2017. It is stated that there were various changes in the composition of Firm with number of partners retiring and some new ones inducted with various retirement deeds and partnership deeds/re-constitution deeds being executed between concerned parties.
The State Tax Officer-cum-Proper Officer assessed the liability of Rs.37,84,228/- was assessed under
Section 73 of PGST Act and Central Goods and Services Tax Act, 2017 read with Section 20 of the Integrated Goods and Services Act, 2017 on account of discrepancy in payment of Goods and Service Tax.
The notice/order was issued to the petitioner and Raswinder Singh. It was submitted that petitioner had in fact retired from the Firm on 20.04.2021. Petitioner, it was further submitted, accessed land revenue records on 28.02.2025 for some personal reasons and it is then it came to light that special remark has been added to jamabandi/land record to the effect that petitioner’s share (103/3890) in the land measuring 19 bighas 09 biswas had been attached in favour of GST department vide rapat No. 194 dated 02.01.2025. Representation dated 11.03.2025 was submitted by petitioner before State Tax Officer, Ward 4, Dhuri explaining his case and requesting for removal of attachment.
The petitioner contended that petitioner had retired from partnership Firm in question on 20.04.2021 and
had nothing to do with the Firm in question, therefore, he cannot be saddled with any responsibility at this stage. It is further submitted that intimation regarding his retirement was to be made by partnership Firm itself and needful was done on 28.02.2025. Petitioner, it was stated, could not have given necessary intimation because he had given up his access to GST portal and login details for the same remained with the then existing partners i.e. Raswinder Singh and Deepak Kumar. Default in question had allegedly occurred in the year 2022 whereas petitioner had retired from partnership on 20.04.2021. It is the existing partners who may be at fault, therefore, action as required should be taken against them alone.
The court held that although he retired from partnership Firm in question on 20.04.2021, no intimation in respect to the same was given to the competent authority. Argument raised on behalf of petitioner that it was not possible for him to have intimated the competent authority on his own and it was only for the Firm to have taken necessary steps, therefore, he cannot be fastened with any liability, is devoid of any merit, hence rejected.
Case Details
Case Title: Harvinder Singh Versus State of Punjab and others
Case No.: CWP-9172-2025
Date: 18/07/2025
Counsel For Petitioner: Amit Gupta, Advocate
Counsel For Respondent: Saurabh Kapoor, Addl. AG
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