Retirement From Partnership Firm Must be Intimated: Partner’s
Retirement Without GST Intimation – High Court Upholds Liability
Background
of the Case
Harvinder Singh, a former
partner in the firm M/s Foreigners Auto Zone, filed a writ petition
seeking to quash a summoning order dated 20.02.2025. The order required
him and another partner to appear and deposit ₹37,84,228 under the
Punjab GST Act, 2017 (PGST) and the Punjab Land Revenue Act, 1887.
Harvinder Singh claimed
he had retired from the firm on 20.04.2021 and should not be liable for
the firm’s tax dues arising from 2022. He also challenged the attachment of his
land share recorded in the revenue records.
· Harvinder
Singh vs. State of Punjab & Others
·
Court:
High Court of Punjab and Haryana at Chandigarh
·
Case No.:
CWP-9172-2025
·
Date of Decision:
July 18, 2025
Petitioner’s
Submissions
- Retired before the liability period
– Left the firm on 20.04.2021, while the alleged default occurred in 2022.
- Responsibility of firm to update GST
portal – He no longer had login access; GST
registration details remained with the continuing partners.
- No role in defaults
– Existing partners, namely Raswinder Singh and Deepak Kumar, should be
responsible for dues.
- Land attachment improper
– Discovered the red entry in revenue records on 28.02.2025 without prior
notice.
Respondents’
Submissions
- Section 90 of CGST Act
– If retirement is not intimated to the Commissioner within one month, the
liability continues until such intimation is given.
- No timely intimation
– GST records still showed Harvinder Singh as an active partner.
- Due process followed
– Notices (DRC-01A and DRC-01) were issued and served; no response was
received.
- Active partnership in records
– Last amendment in GST records was in 2020; no application for further
amendment till 2025.
Court’s
Observations
- Clear statutory mandate under Section
90 – Liability of a partner continues until formal
intimation of retirement is received by the Commissioner.
- Petitioner’s claim that only the firm
could intimate retirement was rejected; either the partner or the firm
could have sent the intimation.
- Delay of nearly four years in
sending intimation (from April 2021 to February 2025) was unjustified.
- The fact that petitioner’s real
brother remained an active partner further weakened his claim of lack of
control or knowledge.
- No valid reason was provided for not
adopting the procedure earlier to update GST registration.
Decision
- Writ petition dismissed
– The Court refused to interfere at this stage.
- Liberty granted to petitioner to
avail alternative remedies under the law, such as appeal under Section 107
of PGST Act.
- Reiterated that failure to notify
retirement on time keeps the partner liable for GST dues.
Key
Takeaways
- Timely intimation is critical
– Partners must ensure the GST department is formally informed within one
month of retirement to avoid continuing liability.
- Personal responsibility remains
– Relying on other partners to complete formalities can be risky.
- GST records are decisive
– Until updated, the department will treat the partner as active for
recovery purposes.
- Section 90 CGST Act is strict
– It overrides contractual arrangements and makes partners jointly and
severally liable for tax dues.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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