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CHAPTER VI LIABILITY TO PAY TAX IN CERTAIN CASES. G. VAT ACT

 

CHAPTER VI 

LIABILITY TO PAY TAX IN CERTAIN CASES.
 


 
 
 

 Applicability of the Act or earlier law to other persons liable to pay tax.

 

 
 
49. Where in respect of any tax, interest or penalty due from a dealer under this Act or under any earlier law, any other person is liable for the payment thereof under any provisions of this Act or earlier law, all the relevant provisions of this Act or, as the case may be, of the earlier law shall, in respect of such liability apply to such person also, as if he were the dealer himself.
 
Liability of commission agent and principal.
 
50. (1) Where a commission agent purchases or sells any taxable goods on behalf of his principal, such commission agent and his principal shall be jointly and severally liable to pay the tax payable under the Act.
(2) If the commission agent shows to the satisfaction of the Commissioner, in the manner as may be prescribed, that the tax payable by
him under this Act in respect of any goods, has been paid by the principal on whose behalf the goods were purchased, the commission agent shall not be liable to pay the tax again in respect of the same transaction.
(3) If the principal, on whose behalf commission agent has sold the goods, shows to the satisfaction of the Commissioner, in the manner as may be prescribed, that the tax payable under this Act in respect of any goods, has been paid by his commission agent, the principal shall not be liable to pay the tax again in respect of the same transaction.
 
Liability in case of transfer of business.
 
51. (1) Where a dealer, liable to pay tax under this Act, transfers his business in whole or in part, by sale, gift, lease, leave and licence, hire or in any other manner whatsoever, the dealer and the person to whom the business is so transferred shall jointly and severally be liable to pay the tax, interest or any penalty due from the dealer up to the time of such transfer, whether such tax, interest or penalty has been assessed before such transfer, but has remained unpaid or is assessed thereafter.
(2) Where the transferee or the lessee of a business referred to in sub-section (1) carries on such business either in his own name or in some other name, he shall be liable to pay tax on the sale of goods effected by him with effect from the date of such transfer and shall, if he is an existing dealer, apply within the prescribed time for amendment of his certificate of registration.
 
Amalgmation of companies.
 
52. (1) When two or more companies are amalgamated by the order of court or of the Central Government and the order is to take effect from a date earlier to the date of the order and any two or more of such companies have sold or purchased any goods to or from each other during the period commencing on the date from which the order is to take effect and ending on the date of the order, then such transactions of sale and purchase shall be included in the turnover of sale or purchase of the respective companies and shall be assessed to tax accordingly.
(2) Notwithstanding anything contained in the said order, for all the purposes of this Act, the said two or more companies shall be treated as distinct companies for all the periods upto the date of the said order and the registration certificates of the said companies shall be cancelled, where necessary, with effect from the date of the said order.
Explanation.-- Words and expressions used in this section but not defined shall have the respective meanings assigned to them in the Companies Act, 1956.
 
Liability in case of company in liquidation.
 
53. (1) Every person—
(a) who is a liquidator of any company which is being wound up whether under the orders of a court or otherwise; or
(b) who has been appointed as receiver of any assets of a company (hereinafter referred to as the "liquidator"), shall, within thirty days after his appointment, give intimation of his appointment as such to the Commissioner.
(2) The Commissioner shall, after making such inquiry or calling for such information as he may deem fit, notify the liquidator within three
months from the date on which he received intimation of the appointment of the liquidator, the amount which in the opinion of the Commissioner would be sufficient to provide for any tax, interest or penalty which is then, or is likely thereafter to become, payable by the company.
(3) When any private company is wound up and any tax, interest or penalty assessed under this Act on the company for any period, whether before or in the course of or after its liquidation, cannot be recovered, then every person who was a director of the private company at any time during the period for which the tax is due, shall jointly and severally be liable for the payment of such tax, interest or penalty, unless he proves to the satisfaction of the Commissioner that such non-recovery is be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company.
Explanation.--For the purposes of this section, the expressions "company" and "private company" shall have the meaning respectively assigned to them under clauses (i) and (ii) of sub-section (1) of section 3 of the Companies Act, 1956.
 
Liability of partners of firm to pay tax.
 
54. Notwithstanding any contract to the contrary, where any firm is liable to pay any tax, interest or penalty under this Act, the firm and each of the partners of the firm shall jointly and severally be liable for such payment: Provided that where any partner retires from the firm, he shall intimate the date of his retirement to the Commissioner by a notice in that behalf in writing and he shall be liable to pay tax, interest or penalty remaining unpaid at the time of his retirement and any tax, interest or penalty due up to the date of his retirement whether assessed or not assessed , on that date:
Provided further that if no such intimation is given within one month from the date of retirement, the liability of such partner under the first proviso shall continue until the date on which such intimation is received by the Commissioner.
 
Liability of guardians, trustees etc.
 
55. Where the business in respect of which tax is payable under this Act is carried on by any guardian, trustee or agent of a minor or other
incapacitated person on behalf of and for the benefit of such minor or other incapacitated person, the tax, interest or penalty shall be levied upon and recoverable from such guardian, trustee or agent, as the case may be, in like manner and to the same extent as it would be assessed upon and recoverable from any such minor or other incapacitated person, as if he were major and capacitated person and if he were conducting the business himself, and all the provisions of this Act shall, so far as may be, apply accordingly.
 
Liability of Court of Wards etc.
 
56. Where the estate or any portion of the estate of a dealer owning a business in respect of which tax is payable under this Act is under the control of the Court of Wards, the Administrator General, the Official Trustee or any receiver or manager (including any person, whatever be his designation, who in fact manages the business) appointed by or under any order of a court, the tax, interest or penalty shall be levied upon and be recoverable from such Court of Wards, Administrator General, Official Trustee, receiver or manager as he case may be, in like manner and to the same extent as it would be assessed upon and be recoverable from the dealer as if he were conducting the business himself, and all the provisions of this Act shall, so far as may be, apply accordingly.
 
Special provision regarding liability to pay tax in certain cases.
 
57. (1) Where a person who is or has been a dealer, liable to pay tax under this Act, dies, then-
(a) if a business carried on by the dealer is continued after his death by his legal representative or any other person, such legal representative or other person, shall be liable to pay tax, interest or penalty due from such dealer under this Act or under any earlier law, and
(b) if the business carried on by the dealer is discontinued, whether before or after his death, his legal representative shall be liable to pay out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax, penalty or interest due from such dealer under this Act or under any earlier law,-
whether such tax interest or penalty has been assessed before his death but has remained unpaid or is assessed after his death.
(2) Where a dealer, liable to pay tax under this Act, is a Hindu Undivided Family and the property of the Hindu Undivided Family is partitioned amongst the various members or groups of members then each member or group of members shall jointly and severally be liable to pay the tax, interest or penalty due from the dealer under this Act or under any earlier law upto the time of the partition whether such tax, penalty or interest has been assessed before partition but has remained unpaid or is assessed after the partition.
(3) Where a dealer, liable to pay tax under this Act, is a firm, and the firm is dissolved, then every person who was a partner shall be jointly and severally liable to pay to the extent to which he is liable under section 54 the tax, interest or penalty due from the firm under this Act or under any earlier law, upto the time of dissolution whether such tax, interest or penalty has been assessed before the dissolution, but has remained unpaid or is assessed after dissolution.
(4) Where the dealer liable to pay tax under this Act,-
(a) is the guardian of a ward on whose behalf the business is carried on by the guardian, or
(b) is a trustee who carries on the business under a trust for a beneficiary, then if the guardianship or trust is terminated, the ward or, as the case may be, the beneficiary shall be liable to pay the tax, interest or penalty due from the dealer upto the time of the termination of the guardianship or trust, whether such tax, interest or penalty has been assessed before the termination of guardianship or trust but has remained unpaid or is assessed thereafter.
(5) Where a person becomes liable to pay tax in the manner described in clause (a) of sub-section (1), then such person shall, (notwithstanding anything contained in section 3), be liable to pay tax on the sales of goods made by him on and after the date of such succession or transfer and shall (unless he already holds a certificate of registration) in the case of succession, within six months and in the case of transfer, within thirty days, thereof apply for registration.
 
Liability in other cases.
 
58. (1) Where a dealer is a firm or an association of persons or a Hindu Undivided Family and such firm, association or family has discontinued business—
(a) the tax payable under this Act, by such firm, association or family up to the date of such discontinuance may be assessed as if no such
discontinuance had taken place; and 
(b) every person who was at the time of such discontinuance, a partner of such firm, or a member of such association or family, shall, notwithstanding such discontinuance be liable jointly and severally for the payment of tax assessed and penalty or interest imposed and payable by such firm, association or family, whether such tax, interest or penalty or has been assessed prior to or after such discontinuance, and subject as aforesaid, the provisions of this Act shall, so far as may be, apply as if every such person or partner or member were himself a dealer: 
(2) Where a change has occurred in the constitution of a firm or an association of persons, the partners of the firm or members of association, as it existed before and as it exists after its reconstitution, shall, without prejudice to the provisions of section 54, jointly and severally be liable to pay tax, interest and penalty due from such firm or association for any period before its reconstitution.
(3) The provisions of sub-section (1) shall, so far as may be, apply where the dealer, being a firm or association of persons is dissolved or where the dealer, being a Hindu Undivided Family, has effected partition with respect to the business carried on by it and accordingly references in that sub-section to discontinuance shall be construed as reference to dissolution or, as the case may be, to partition.
 
Service of notice in certain circumstance
 
59. (1) Where a Hindu Undivided Family has been partitioned, notice under this Act shall be served on the person who was the last manager of the Hindu Undivided Family, or if such person cannot be found, then on all adults who were members of the Hindu Undivided Family, immediately before the partition.
(2) Where a firm or an association of persons is dissolved, notice under this Act may be served on any person who was a partner (not being a minor) of the firm, or member of the association, as the case may be, immediately before its dissolution.
(3) Where the business of a firm, an association of persons or company has been discontinued, a notice under this Act shall be served in
the case of a firm or an association of persons on any person who was a member of such firm or association at the time of its discontinuance and in the case of a company, on the principal officer thereof.

 

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