The Punjab & Haryana High Court in the case of HARVINDER SINGH VERSUS STATE OF PUNJAB AND OTHERS, vide Case No. CWP-9172-2025 dated 18.07.2025, held that Section 90 of the CGST Act provides that the liability of a retired partner continues unless intimation of retirement is given to the Commissioner within one month of the date of retirement. The petitioner failed to provide such intimation in a timely manner, and belated communication cannot nullify the liability that arose earlier. The petitioner’s claim that he lacked access to the GST portal or that responsibility lay with existing partners is not a valid defence. The Department was justified in treating him as liable for dues of the Firm.
Facts of the Case: In this case, the petitioner was a founding partner of the firm M/s Foreigners Auto Zone. He retired from the firm on 20.04.2021, but did not intimate the Commissioner about his retirement as required under Section 90 of the CGST/PGST Act. A demand of ₹37,84,228 was raised against the firm under Section 73, due to non-payment of GST for the month of April 2022.
Upon initiation of recovery proceedings, the petitioner’s land was attached, and a summons was issued to him by the State Tax Officer on 20.02.2025. The petitioner claimed that he had no responsibility for the tax liability of the firm after his retirement, which occurred before the period of default. Further, contended that he had lost access to the GST portal and that the responsibility of updating the firm’s status on the portal lay with the continuing partners.
The Department argued that the petitioner continued to be jointly and severally liable for the firm’s tax dues since no intimation was given to the Commissioner within one month as mandated by Section 90(2).
The petitioner finally uploaded the retirement details on the GST portal on 28.02.2025, long after the limitation period had lapsed.
Issue: Whether a retired partner can be held liable for the tax dues of a firm incurred after his retirement when no timely intimation was given to the Commissioner under Section 90 of the CGST/PGST Act. Whether recovery proceedings, including land attachment, initiated against the petitioner are valid in law.
Held that: The High Court dismissed the writ petition, upholding the Department’s recovery action. The Court held that Section 90(2) of the CGST Act clearly provides that a retiring partner remains liable for the tax dues of the firm unless and until due intimation is furnished to the Commissioner within one month of the retirement.
The failure to provide timely notice meant that the petitioner continued to be jointly and severally liable for the firm’s tax obligations incurred even after his retirement.
The petitioner’s explanations that he lost access to GST credentials or that co-partners were at fault, were not accepted. The attachment of petitioner’s land and the issuance of summons were found to be lawful and within the scope of the recovery provisions.
The Court observed that the petitioner was free to avail alternative statutory remedies available under the PGST Act but declined to entertain the writ.
To read the complete judgment 2025 Taxo.online 1624
