LIABILITY TO PAY TAX IN CERTAIN CASES – PART-2
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 22-10-2016
Chapter XXII of the Model Law contains Chapter XXII comprising of sections 108 to 115 which deal with liability to pay GST in eight special cases as follows :
Section
Liability
108
Liability in case of transfer of business
109
Liability in case of amalgamation / merger of companies
110
Liability in case of company in liquidation
111
Liability of partners of firm to pay tax
112
Liability of guardians, trustees etc
113
Liability of Court of Wards etc.
114
Special provision regarding liability to pay tax in certain cases (death, discontinued business, hindu undivided family or association of persons, on partition, dissolution of firm, termination of guardianship or trust etc).
115
Liability in other cases (discontinued business of HUF, firm, AOP; change in constitution of firm or AOP etc.)
This part covers sections 110 to 112 of th
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dation, every person appointed by an order of the Court/Tribunal as receiver of any assets of a company (liquidator) shall within thirty days of his appointment, give intimation of his appointment to the Commissioner. Commissioner to notify the liquidator within 3 months from the date on which he receives intimation of the appointment of the liquidator, the amount of tax, interest or penalty which is payable by the company.
While every person who was a director of company during the period of liability, independent directors who are not involved in affairs of the company and are able to prove that non-recovery can not be attributed to gross neglect, misfeasance or breach of duty on their part, may not be liable for recovery from them.
Liability of Partners of the Firm
All the partners of any firm shall jointly and severally liable for payment of any tax, interest or penalty. Firm or partner shall intimate the retirement of any partner to the Commissioner by a notice in writing. Liab
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e business in respect of which any tax is payable is carried on by any guardian / trustee / agent of a minor or other incapacitated person on behalf of and for the benefit of such minor/incapacitated person, the tax, interest or penalty shall be levied upon and recoverable from such guardian or trustee or agent, as the case may be.
Following persons shall liable to pay tax in respect of such business –
* guardian
* trustee
* agent
The amount of the tax, interest, penalty or any other dues which are recoverable from the minor or any such incapacitated person are the amounts –
* levied / assessed in the hands of guardian, trustee or agent.
* collected from the guardian, trustee or agent.
The term 'incapacitated person' is not defined in GST law. It may include persons of unsound mind or terminally ill persons, one who is incapable of or prevented from normal working / functioning.
According to Advanced Law Lexicon, 'incapacitated person' is any person who is
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