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

Mehta Family HUF, a registered taxable person, had unpaid GST dues for the period up to 31 December. On 1 January its property was partitioned among members Dinesh, Eesha and the group of Farhan and his two sons. In March, tax and penalty of Rs 2,70,000 were determined for the period before partition. What is the position under the CGST Act?

Dinesh, Eesha and the group of Farhan and his sons are each jointly and severally liable for the Rs 2,70,000. The Act makes each member or group liable for HUF dues up to partition, whether determined before or after the partition.

  1. AEach member or group of members is jointly and severally liable for the dues up to the time of partitionCorrect
  2. BThe HUF's liability ends at partition and passes only to the karta
  3. CEach member or group is liable only for one-third, being three units, with no joint liability
  4. DLiability arises only for tax determined before partition, not after

Explanation

Where an HUF's property is partitioned, each member or group of members is jointly and severally liable for tax, interest or penalty due up to partition. This applies whether determined before or after partition. Hence the March determination is recoverable from each of them, and a split share or karta-only liability is not provided.

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