#partnership liability

The Gauhati High Court has ruled that partners of a firm can be penalized under Section 122(1A) of the CGST Act for retaining benefits from fraudulent transactions, even if they are not registered taxable persons. This extends liability beyond the entity to individuals who profit from tax evasion, and applies retroactively to pre-2021 transactions if notice was issued after the provision came into force, significantly broadening enforcement scope for GST fraud cases.

CESTAT Ahmedabad rules that a voluntary, unretracted confessional statement under Section 108 of the Customs Act is sufficient to uphold a duty demand, eliminating the need for additional corroborative evidence. The decision reinforces the evidentiary weight of admissions in customs disputes, impacting importers and partners in similar proceedings.

The Madhya Pradesh High Court ruled that a partner who retires from a firm remains liable under Section 138 of the Negotiable Instruments Act for cheques issued by the firm during their partnership tenure, pending evidence of liability discharge. This holding reinforces vicarious liability principles in partnership disputes, impacting retired partners facing cheque bounce prosecutions.

Bombay High Court holds that prosecution under Section 138 NI Act against partners requires clear allegation of involvement and privity of contract; mere designation insufficient.