Skip to content

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

Kumar Brothers (HUF) was a registered taxable person. Its property was partitioned among members A, B and a group of members C and D on 1 January. GST of ₹2,40,000 for periods up to 31 December was determined later in April. Which is correct?

Each member or group of members is jointly and severally liable for the tax, interest or penalty due from the HUF up to the time of partition. It does not matter that the amount was determined after the partition, so the April determination does not remove their liability.

  1. AEach member or group of members is jointly and severally liable for the tax, interest or penalty due up to the time of partition, even though determined afterwardsCorrect
  2. BOnly the Karta is liable for the dues
  3. CLiability is extinguished on partition because the HUF ceases to be a taxable person
  4. DA, B and the group C and D are liable only for amounts determined before partition

Explanation

When the property of an HUF is partitioned, each member or group of members is jointly and severally liable for tax, interest or penalty due up to the time of partition, whether determined before or after partition. Options limiting liability to pre-partition determination or to the Karta contradict this.

Did you get it right without looking?

One question tells you little. A timed set on Liability to Pay in Certain Cases shows your real accuracy, how long you take and where you lose marks.

Practise Liability to Pay in Certain CasesFree diagnostic mock

More Liability to Pay in Certain Cases questions