Failure To Notify GST Commissioner About Partner's Retirement Makes Ex-Partner Liable For Firm's GST: Punjab & Haryana High Court

Section 90 of the CGST Act, 2017 extends the liability in case of partnership firm to its partners as well.

Justices Lisa Gill and Sudeepti Sharma stated that “intimation of retirement of partner has to be given to the Commissioner by notice in writing and that in case, no such intimation is given within one month from the date of retirement, liability of such partner under first proviso shall continue until the date on which such intimation is received by the Commissioner.”

In this case, a partnership Firm was constituted by the petitioner/assessee and one Puneet Singla son of Bhim Singh, Deepak Nagpal son of Jogender Nagpal and Gurvinder Singh son of Gurdev Singh. Land belonging to assessee and other partner Gurvinder Singh son of Gurdev Singh was taken on rent by the Firm vide agreement dated 16.02.2017. 

It is stated that there were various changes in the composition of Firm with number of partners retiring and some new ones inducted with various retirement deeds and partnership deeds/re-constitution deeds being executed between concerned parties.

Order (DRC-07) was passed by State Tax Officer in respect to assessment year 2023-24. Thereafter, notice/order was issued to the petitioner/assessee and Raswinder Singh. 

The assessee argued that the assessee had retired from partnership Firm in question on 20.04.2021 and had nothing to do with the Firm in question, therefore, he cannot be saddled with any responsibility at this stage.

It was further submitted that intimation regarding his retirement was to be made by partnership Firm itself and needful was done. The assessee could not have given necessary intimation because he had given up his access to GST portal and login details for the same remained with the then existing partners.

The bench observed that other partner of Firm who even as of now is an active partner as per pleading of assessee, is none other but his real brother Raswinder Singh. There is nothing on record to indicate that assessee at any point of time had taken any steps to ensure intimation to authorities about his retirement from the Firm in question.

The bench opined that the assessee was unable to point out as to why such course of action could not have been adopted earlier in April 2021 or within the month thereof when he allegedly retired from the Firm. Hence, it cannot be concluded that assessee is not liable under the Act, especially in view of categoric provision of Section 90 of CGST Act, 2017.

In view of the above, the bench dismissed the petition. 

Case Title: Harvinder Singh v. State of Punjab and others

Case Number: CWP-9172-2025 

Counsel for Petitioner/Assessee: Amit Gupta

Counsel for Respondent/Department: Saurabh Kapoor