LIABILITY TO PAY TAX IN CERTAIN CASES – PART-3
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 28-10-2016
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 113 to 115 of the m
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le –
* Court of Wards
* Administrator general
* Official trustee
* Any receiver or manager
* Any other person by whatever name and the designation called, who in fact actually manages the business
Liability to pay tax in certain cases
Death
Where a person liable to pay tax dies, then, if the business is continued by his legal representative or any other person, such legal or any other person shall be liable to pay tax, interest or penalty due from such person. If the business 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 capable of meeting the charge, tax, penalty or interest due from such person, whether such dues have been determined before his death but has remained as unpaid or is determined after his death. Taxable persons would include individuals and proprietorship concerns.
In following cases, recovery can not be made from the legal representative of
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s remained unpaid or is determined after dissolution firm would include a LLP.
Guardian / Trustee
Where a taxable person liable to pay tax is the guardian of a ward on whose behalf the business is carried on by the guardian or a trustee who carries on the business under a trust for a beneficiary, 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 taxable person up to the time the termination of the guardianship or trust whether such dues have been determined before the termination of the guardianship or trust but has remained as unpaid or is determined after such termination.
Liability in other cases
Discontinued Business
Where a firm or AOP or HUF has discontinued the business, the tax payable by such entity up to the date of discontinuance may be determined as if no such discontinuance has taken place. Every person who was at the time of discontinuance, a partner of firm
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