At certain instances, it comes to notice that provision of a particular Statue provides for levy and payment of personal penalty for e.g. by Managing Director besides the payment of penalty by Organization concerned for a particular contravention. In such cases a Question arises, whether the proprietor or partners can also be made liable for the contraventions of Proprietorship firm or partnership firm.

To clarify the issue, The Hon’ble High Court of Punjab & Haryana in case of Vinod Kumar Gupta vs. Commissioner of Central Excise 2013 (287) E.L.T. 54 (P & H) has held that although a firm in mercantile usage is the firm in its own but strictly in the eye of law, it is not a legal entity like a natural person. The rights & obligations of a firm are really the rights and obligations of the individual partners of the firm and hence, penalty imposed on the firm would amount to imposition of penalty to the proprietor or the partners, as the case may be. Therefore, imposition of penalty on the proprietor independently would not be legal.

The copy of the Case is attached herewith for your kind perusal.