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CA Final · Indirect Tax Laws · Liability to Pay in Certain Cases

A Hindu Undivided Family, Mehta HUF, registered under GST, partitioned its business property among its members Hari, Isha and Jay on 15 December. Tax and interest for the period up to 15 December were determined in the following February and remain unpaid. What is the position?

Hari, Isha and Jay, as members or groups of members, are jointly and severally liable for all dues up to the date of partition. Determination of the amount after the partition does not release them, and liability is not limited to the share each received.

  1. AThe dues lapse because the HUF ceased to exist on partition
  2. BOnly the karta at the time of partition is liable
  3. CEach member or group of members is jointly and severally liable for the dues up to the time of partition, even though determined after partitionCorrect
  4. DEach member is liable only for the dues proportionate to the share received

Explanation

On partition of the property of an HUF that is a taxable person, each member or group of members is jointly and severally liable for the tax, interest or penalty due up to the partition, whether determined before or after it. A proportionate-share limit is not provided, so the department can recover the whole from any of them.

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