Chapter XVI LIABILITY TO PAY IN CERTAIN CASES

. ( l) Where a taxable p;san, liable to pay tax under thisAct, transfers his bQSiness in whole or in part, by· sale, gift, lease, leave and license, hire .or in any other manner whatsoever, the taxable person and the ?n to whom the business is so transferred shall. jointly and severally, beliablewhollyortotheextentofsuchtransfer,topaythe tax, interest or any penalty due from the taxable person up to the time of such transfer, whether such tax, interest or penalty has been determined before such transfer, but has remained unpaid or is determined thereafter. (2) Where the transferee of a business referred to in sub- section ( l) carries on such business either in his own name or. in some other name, he shall be liable to pay tax on the supply of goods or services or both effected by him with etfect &om the date of such transfer and shall. ifhe is a registaed persou under this ?,apply Within the presaibed time for amendmalt ofms certificate of registration. Liability in case of transfer of busineSS.

Where an agem, supplies or receives any taxable goods on Llability of agent and behalf of his principal. such agent and his principal shall, principal. joimly and severally, be liable to pay the .tax payable on· such goods under, this Act.

( l) When two or more companies are amalgamated or merged in pursuance of an order of court or of Tribunal or otherwise and the order is to take effect from a date earlier to the date of the order and any two or more or' such companies have supplied or received any goods or services or both to or from each other during the period commencing on the date from which the order takes effect till the date of the order, then such transactions of supply and receipt shall be included in the turnover of supply or receipt of the respective companies and they shall be liable to pay tax accordingly; (2) Notwithstanding anything contained in the said order, for the purposes of this Act, the said two or more companies shall be treated as distinct companies for the period up to Ole date of the said order and the registration certificates of the said companies shall be cancelled with effect from the date of the said order. Liability in case of amalgamation or :........J of companies. .._..,

of2016 88. (1) .W,hen any coin:vany is being wowid up whether under Y' the. 9!4?H; of, a cpllf!. 9r Tribunal· or: ?We?e. eyFry . perso? appointed as receiver of any ?set? of a company (here??er ip. this .sec?on referrefto ? .the "liqllida?or"; shall, within thirty days ?? .. his appointment, ,gj.v intimation ofhis appointment to the Commissioner. ' (2) The Commissioner shall,' after making such inquuf i»-, callmg forsuch information as ht may d? fit, nofffy1' the .liquidator within three months·irdm 'the datJ1bi --, which he receives intimation '.bf th?"'appomtment of''-: the, liquidator, the amount- which m, !lie opinion of the -: Cemmissioner wouldbe sufficientto·wo?.de for any tax, r' --. iateress.or penalty which is then, orJ?Jikely thereafterto become, payablebythe company. ·, r:l Li?lplity in case of cothpany in liquidation. of2013 (3)' · When::any privat?:cpmp?f is -wo\lll?- up'and any? · inte?est or penalty deter?? under this Act on dit, ,,f??J>any for any period, Wheter \)ef?re 0? ,in the CO';'fSe r : of?t ? its Jiq?clatiOJ1, ?not be/eCoVered, then every person who wasa dir?ftor of such tp1np'any at any time,_ during the period fol whicl\ the? w? due shall, j?intlt) ?d severally s . beliable for the p??ent of sue?--?: interest or penalty, 1JIDesshe proyes to the satisfaction of the Commissioner that Supt non-recovery cannot be a¥-buted toany gross negleft, Illisfeasahce or breach.?{,( duty on his part in relation to the affairs of the company .": 89. (1) - -Notwithstanding anything contain.ed in the Companies' · 'At£ 2013;where any tax, interest or penalty due from a private company in respe? of any supply of goods or services or both for any period canriot be recovered, then, eferf petson"who was a, director of the private company > duririg such period 'shall, jointly and severaUy, b? liable ;jfor the payment of such tax, interi? or penalty μnless he: P!oves that the npn-recoverfc?i ?e ?ttlibtite?}o ?y .gross neglect, rmsfeasance or breach of-duty on his pm in relation to,the affairs ofthe company. ' (2) Where a private company iscol\'W!tted into a public .,,icompanyandthetax,interestorpenaltyinrespectofahy· supply of goods or services or both for any period during ._,: 'w?ich such company was a, privat? company cannot' ' ;, be relovered before such con.v?on, then, -nothing contained in' sub-section (lJshaU'appfy to any person who wasa director of such private company in relation h0 to any tax:, interest or penalty ifl:respect of,such supply of 1•oigoods or services or both of such private'company: ?·· . .,:;':.,,: -? .., :\ c>:;, , Prqvkkd·that nothing,containt.d in,J:W,. sμh?section shall apply to any personal penalty imposed,on sqch director. I uibility of directors of private company.

of2016 Notwithstanding any contract to the contrary ?d any 'other law for.th? time bang in force, where any firJl'l is' liable to pay any t?x/inte?est or penalty under this Act, the .1irm ? each of th??e?r?f thefirm shall. · • j?intly and severally. be liable for sucn pay,mertt: .,. Provided that where any partner retires from the firm, he or the firm, ?all intimate the,date of fCtirement ofth? sai4 partner to :;:;:r?zn??!·?:::???=::?: .: ::d?1: date of his retiren;ient.whether determined or μot, on? ?: Provided further •uilt· if no such intimation is giVeti 'within one month from the date ? retirement, the liability of sudl• partner under the first proviso shall continue until the date M'Wbich'su.ch intimation is received by the

101 (1) .W,hen any coin:vany is being wowid up whether under Y' the. 9!4?H; of, a cpllf!. 9r Tribunal· or: ?We?e. eyFry . perso? appointed as receiver of any ?set? of a company (here??er ip. this .sec?on referrefto ? .the "liqllida?or"; shall, within thirty days ?? .. his appointment, ,gj.v intimation ofhis appointment to the Commissioner. ' (2) The Commissioner shall,' after making such inquuf i»-, callmg forsuch information as ht may d? fit, nofffy1' the .liquidator within three months·irdm 'the datJ1bi --, which he receives intimation '.bf th?"'appomtment of''-: the, liquidator, the amount- which m, !lie opinion of the -: Cemmissioner wouldbe sufficientto·wo?.de for any tax, r' --. iateress.or penalty which is then, orJ?Jikely thereafterto become, payablebythe company. ·, r:l Li?lplity in case of cothpany in liquidation. 18 of2013 (3)' · When::any privat?:cpmp?f is -wo\lll?- up'and any? · inte?est or penalty deter?? under this Act on dit, ,,f??J>any for any period, Wheter \)ef?re 0? ,in the CO';'fSe r : of?t ? its Jiq?clatiOJ1, ?not be/eCoVered, then every person who wasa dir?ftor of such tp1np'any at any time,_ during the period fol whicl\ the? w? due shall, j?intlt) ?d severally s . beliable for the p??ent of sue?--?: interest or penalty, 1JIDesshe proyes to the satisfaction of the Commissioner that Supt non-recovery cannot be a¥-buted toany gross negleft, Illisfeasahce or breach.?{,( duty on his part in relation to the affairs of the company .":

(1) - -Notwithstanding anything contain.ed in the Companies' · 'At£ 2013;where any tax, interest or penalty due from a private company in respe? of any supply of goods or services or both for any period canriot be recovered, then, eferf petson"who was a, director of the private company > duririg such period 'shall, jointly and severaUy, b? liable ;jfor the payment of such tax, interi? or penalty μnless he: P!oves that the npn-recoverfc?i ?e ?ttlibtite?}o ?y .gross neglect, rmsfeasance or breach of-duty on his pm in relation to,the affairs ofthe company. ' (2) Where a private company iscol\'W!tted into a public .,,icompanyandthetax,interestorpenaltyinrespectofahy· supply of goods or services or both for any period during ._,: 'w?ich such company was a, privat? company cannot' ' ;, be relovered before such con.v?on, then, -nothing contained in' sub-section (lJshaU'appfy to any person who wasa director of such private company in relation h0 to any tax:, interest or penalty ifl:respect of,such supply of 1•oigoods or services or both of such private'company: ?·· . .,:;':.,,: -? .., :\ c>:;, , Prqvkkd·that nothing,containt.d in,J:W,. sμh?section shall apply to any personal penalty imposed,on sqch director. I uibility of directors of private company. 31 of2016 102 Notwithstanding any contract to the contrary ?d any 'other law for.th? time bang in force, where any firJl'l is' liable to pay any t?x/inte?est or penalty under this Act, the .1irm ? each of th??e?r?f thefirm shall. · • j?intly and severally. be liable for sucn pay,mertt: .,. Provided that where any partner retires from the firm, he or the firm, ?all intimate the,date of fCtirement ofth? sai4 partner to :;:;:r?zn??!·?:::???=::?: .: ::d?1: date of his retiren;ient.whether determined or μot, on? ?: Provided further •uilt· if no such intimation is giVeti 'within one month from the date ? retirement, the liability of sudl• partner under the first proviso shall continue until the date M'Wbich'su.ch intimation is received by the Commissioner.

Wh?e _the .busin,ess in ?.of which a,.1y ? interest. or P,?ty. is payable under .1flis Act. is . carried on by. any guardian, trustee .. or .ent. of a .minor or other inc;ap?tated person on.behalf ?f ?d for the benefit ofsuch minor or other incapacitated ?i thetax.iil?est or? sbal1.?llWed upo.11.and recovenal>I? fio1:;11 such,? ?pr'?t in likenianp? m,d to.?.? empt _as .1twQμlij?.??ed and i:ec;<iverable fro? any such ?or or o.ther incap? person, 'as ifhe ? a major or.capacitated Jiei'so1lan4 ? if he we? conducting me ?.himse.lf, andall the provisions of this. ?Of the ruJ? ina,Je thereunder?· ap?lf; !lCCOrclingly. 92. Wh? 1?e. estate or any pqrtiqμ, .of the. estate. 9f a ?le person·pwimga.b?in? of which anyt? iilt?est or ?nal?? p?pble,in??r tfqs ? is under the co11trol of the Court.of Wards, the?orGeneral, the Ofli.eutl.T.tv.stee or aμ.y receiver .. m?er (including 1ll1Y person, w;?et be his de?Jgnati?; who in, fa? inanages the bqsiness)' apJ>Qinted by or un4!? atJ.y orde; R(.? (:()? the ? interest or pe?alty shaUJ,? levied upon ?d, .t,e recoverable, from such Cour,t of Wards?· Adininis?tor. Gcperal. . Officiai. Trustee, .. ??eiv? or manager in like IIWUlffilitd to thf: same ?t as \t w:01il? be determined and be recoverable from the taxable person as ifhe wei:e:?llCtin.g the??hi?elf. andalhheprovwons of. this "'4:lPr the ?s,f\lla4e therel.lUder shall apply ac?orc:lingly. . . 93. (1)<, ?ve as. o.yt?rwi$C prqvid?d in the Insolvencr::?d . . .B?ptcy Co?}J:tl6,where a person, lia?le. tQ3 PV .? interest W penaJty'under this Act, dies, thf:.p-. ? V ? '.. ' :I' . ,/·., • .•; . . ' . ·._.;_.,_,: ·,.,. : .•. ·: • ( a) if a business cal.lied on ? the person is ?ptimied after his death by,his legal representative Ol'·:fIIY other person, such legal representative or other person. shallbe liable·w payt-., interestdt penalty due from such persoll under this·A? and Liability of partners am firm to pay tax. Llability of guardians. trustees etc. Liability of Court of Wards etc. Special provisions regarding liability to pa, tax, interest or penalty iJ! certain cases.

of2016 of2016 , of2016 (b) . ifthe b?ss !. ?ied on by the ;?rson is discontinued.. ?ther. before. or aftei .l.J.j.s death, his1eg? J'.9)?e? be?? to pay, out of the estate of the deceased, to the extentto which • - - I the ?·li5 ????g the?e, the tax, interest, ?I" p?@ty;dμ.e from such person under this Ac4 .•... ' ' ,, l , . a··.·: whether such tax. lnte?for penalty hasbeen deterrliined ? his death but has remained unpaid or is determined after-.his death. ',:- . (2) 1Save -as oth? pro?(,1¢d in tile Insolvency and B?ptcy q,de,,20? wb.?fe .a ?e person. liable to pay tax, ipterest ? ?ty ?r ?i?? is a Hindu ?vid.ed 4miJy 01' an:asspciatiBn qt ?ns andthe ?pertyoftlleHin?uundivu¥df.aniwsrrw-e?on . of persons is parti.tion? ?ongst tlisXH!ous members or. ?up$,, '?f m?bers. .. ?,n,_ each -? ? group Jlf J):Jembers_,?, JOintly,ai,id ?.-? liable to pay the tax. ?t or penf}ty due froin the,jaxable person · under_Jlj_i?),\ct 'W ? the ti?? oftlie ?on whether such tax. penalty<>! inte.test? l>een iete:rmined before partition buthas reinairled uft'paid orisdefermined after · the partition. (3) ·_s.e .as.,-???- .prQl'i? ? tht: J;??cy .? ,!;'=!?Yi?:r??ii???;t;?d:::?·?n?=· . ?d the firmjs diswfyf!d. ffi?.,?ery persop who was a .• shaDi{MS??£; penalty lias been determined before the dissolution,_ but ?as remained unpaid oris deti!i-mined ·a,ftel: dissolution.r ?. _::rr·· ;- _ _ _ )t5 (4) Save. as otherwise ?,-• 1-J,lnsolvency and Bankruptcy Code, 2Ql(;, wh,« a taxable person liable to i,ay: tax. interest or pelMJlty,μnder this Act.?. (a) is the guarCllilll ·.··??a,1\\1ari{_<>ll _wbose behalf the business is camed'on ?Y theptdiail; or ,f; ,.\,. (b) is a trustee wl}.o carries on thebusiness under a trust for a beneficiary, then, ·if tl'le gti?rdfanshlp or ttust. U terminated,. the -ward or the beneficiary' shall 'be liable· to ·pily'the tax, interest· or penalty due from the taxable person 1.ip te·1tlie time of tluvtenriination ofthe guardianship or trust, whether such ? interest or penalty has been deter,:μ?'4, befor?, the ?tlllin,ation of ?ardiatla.lup-qr trust· but has remained unpaid or is determined thereafter.

7430£2012 94. (l) 'W}lere a 'taxable perso?' ? · a'rum,·or an association of Liability in other a4 persons or a. Hindu unaivided family and such firm, association or family has:discontinued business- ,'.}\-;,j{:j .::· . 'f t,, . . .. _· (a):''?etax;interat,?r,?payable.under this Act . ' by such mm, associatirlrt'br family up to the date ofsuch discontinuance may be determined as if no such disconnnuance ?d?en p]ace; and •',)!fl'l':I' ,,· f •;, ; (b). everypersonwho,atthetimeof suchdiscontinuance, was a partner of-such firm, ot a m?ber ofsuch association or family, shall, notwithstanding such ·?discofitmuance, jointly and severally,'<be: liable ' .. '[o? the ... payment of tax and · .. iriterest determined ana ?? imposed and payable btsucli firm, ?bdation or family, whethei?uclimrandinterest t':::?j? determined or penaltyhtlposedprior to or . Wf such discon?uance and subjectas af9,:-esaid, . 'Ute provjsions of . this Act shall, so far as triay be. apply?· if every such person of partn?r or niember i?re)ilinscl(a taxable,?1Lr ·,. ' (2) W];lere. a cbang? has occurred in the constitution of a firfflftt.' .· usodatioWof?ns, thepartners <ttthe finn orllje?fs of assoaatiBn,'as·itmsted before and as it · ? 1ffler the tec<>nsti?tt,?11, f11a1J, wtth?Jf prtjudice to thi provisions of ?on'?, jointly an4 severally, be li,?le to pay? interest"?r?@ty due from su? firm or ?oda,tion;for any periq? before i?, reconsU??on. l (3) The p?mons·.??J!\>:section (1) sh?, so ra;as 'may be, apply where the taxable person, being a firm pr associati<m ofpersons is dissolved or where the taxalJle person, being a Hindu t1n&vided Family, has effected partition with respect . t6 ·t1ie •. business carried} on by it and ·. accordingly references in . thatsub-section to discohtinuan? shall .. ' be construed . as reference to dissolutio?;i. as the?? may be, to partition. Explanation:-For the purposes of this ?hap?er,- . ( a) · a ?Linuted Liability Partn?ip" formeq anq ,J?gi?re? , under, the provisi<.>ns of ?JJmited Li.ability Pat:tn?p . Act, 2012. shall alsq ?- cQS$d,ered as a firm;, , II::. (b) ?court'"? theDistrid Court. PlighCourt or Supfeme Court. · · .· .. · ···

95. (a) "a?vance ruling\fil? ? decisio.n provided by the .. ,,, · Autliority ot the' Apptllat¢ iutli<>rity to an applicant on matters or on questions ipecified in; ,uo?section (2) of se??on97toU?sectjPP. {?)}<>f ?gn 100,inrelation to the supply of g?Bf,S??-ifib?undertaken or proposed to be undertaken by the applicant; • (b) "Appellate Autho?-means the Appellal!.t\l.rthority for Advance Ruling constituted under sectlo?.99. (c) "?t··?1tμy,person registered,otdesm,us of obtaining regis?tiol). QDdel' this Act; ( d) "application" mtans'an application madetotheAuthority under sub-section, {l) of section 97; __ ? .:t?fi? 1·-?Jr.<: r,,_ :>"-? : .r·.:J-r.-(::.z: -1..,,., (?) '"Alitliority" fu?$ the. Aiith,ority fqr Advance Ruling. constituted under section 96;

Wh? 1?e. estate or any pqrtiqμ, .of the. estate. 9f a ?le person·pwimga.b?in? of which anyt? iilt?est or ?nal?? p?pble,in??r tfqs ? is under the co11trol of the Court.of Wards, the?orGeneral, the Ofli.eutl.T.tv.stee or aμ.y receiver .. 01 m?er (including 1ll1Y person, w;?et be his de?Jgnati?; who in, fa? inanages the bqsiness)' apJ>Qinted by or un4!? atJ.y orde; R(.? (:()? the ? interest or pe?alty shaUJ,? levied upon ?d, .t,e recoverable, from such Cour,t of Wards?· Adininis?tor. Gcperal. . Officiai. Trustee, .. ??eiv? or manager in like IIWUlffilitd to thf: same ?t as \t w:01il? be determined and be recoverable from the taxable person as ifhe wei:e:?llCtin.g the??hi?elf. andalhheprovwons of. this "'4:lPr the ?s,f\lla4e therel.lUder shall apply ac?orc:lingly. . .

(1)<, ?ve as. o.yt?rwi$C prqvid?d in the Insolvencr::?d . . .B?ptcy Co?}J:tl6,where a person, lia?le. tQ3 PV .? interest W penaJty'under this Act, dies, thf:.p-. ? V ? '.. ' :I' . ,/·., • .•; . . ' . ·._.;_.,_,: ·,.,. : .•. ·: • ( a) if a business cal.lied on ? the person is ?ptimied after his death by,his legal representative Ol'·:fIIY other person, such legal representative or other person. shallbe liable·w payt-., interestdt penalty due from such persoll under this·A? and Liability of partners am firm to pay tax. Llability of guardians. trustees etc. Liability of Court of Wards etc. Special provisions regarding liability to pa, tax, interest or penalty iJ! certain cases. 31 of2016 31 of2016 , 31 of2016 103 (b) . ifthe b?ss !. ?ied on by the ;?rson is discontinued.. ?ther. before. or aftei .l.J.j.s death, his1eg? J'.9)?e? be?? to pay, out of the estate of the deceased, to the extentto which • - - I the ?·li5 ????g the?e, the tax, interest, ?I" p?@ty;dμ.e from such person under this Ac4 .•... ' ' ,, l , . a··.·: whether such tax. lnte?for penalty hasbeen deterrliined ? his death but has remained unpaid or is determined after-.his death. ',:- . (2) 1Save -as oth? pro?(,1¢d in tile Insolvency and B?ptcy q,de,,20? wb.?fe .a ?e person. liable to pay tax, ipterest ? ?ty ?r ?i?? is a Hindu ?vid.ed 4miJy 01' an:asspciatiBn qt ?ns andthe ?pertyoftlleHin?uundivu¥df.aniwsrrw-e?on . of persons is parti.tion? ?ongst tlisXH!ous members or. ?up$,, '?f m?bers. .. ?,n,_ each -? ? group Jlf J):Jembers_,?, JOintly,ai,id ?.-? liable to pay the tax. ?t or penf}ty due froin the,jaxable person · under_Jlj_i?),\ct 'W ? the ti?? oftlie ?on whether such tax. penalty<>! inte.test? l>een iete:rmined before partition buthas reinairled uft'paid orisdefermined after · the partition. (3) ·_s.e .as.,-???- .prQl'i? ? tht: J;??cy .? ,!;'=!?Yi?:r??ii???;t;?d:::?·?n?=· . ?d the firmjs diswfyf!d. ffi?.,?ery persop who was a .• shaDi{MS??£; penalty lias been determined before the dissolution,_ but ?as remained unpaid oris deti!i-mined ·a,ftel: dissolution.r ?. _::rr·· ;- _ _ _ )t5 (4) Save. as otherwise ?,-• 1-J,lnsolvency and Bankruptcy Code, 2Ql(;, wh,« a taxable person liable to i,ay: tax. interest or pelMJlty,μnder this Act.?. (a) is the guarCllilll ·.··??a,1\\1ari{_<>ll _wbose behalf the business is camed'on ?Y theptdiail; or ,f; ,.\,. (b) is a trustee wl}.o carries on thebusiness under a trust for a beneficiary, then, ·if tl'le gti?rdfanshlp or ttust. U terminated,. the -ward or the beneficiary' shall 'be liable· to ·pily'the tax, interest· or penalty due from the taxable person 1.ip te·1tlie time of tluvtenriination ofthe guardianship or trust, whether such ? interest or penalty has been deter,:μ?'4, befor?, the ?tlllin,ation of ?ardiatla.lup-qr trust· but has remained unpaid or is determined thereafter. 7430£2012 104

(l) 'W}lere a 'taxable perso?' ? · a'rum,·or an association of Liability in other a4 persons or a. Hindu unaivided family and such firm, association or family has:discontinued business- ,'.}\-;,j{:j .::· . 'f t,, . . .. _· (a):''?etax;interat,?r,?payable.under this Act . ' by such mm, associatirlrt'br family up to the date ofsuch discontinuance may be determined as if no such disconnnuance ?d?en p]ace; and •',)!fl'l':I' ,,· f •;, ; (b). everypersonwho,atthetimeof suchdiscontinuance, was a partner of-such firm, ot a m?ber ofsuch association or family, shall, notwithstanding such ·?discofitmuance, jointly and severally,'<be: liable ' .. '[o? the ... payment of tax and · .. iriterest determined ana ?? imposed and payable btsucli firm, ?bdation or family, whethei?uclimrandinterest t':::?j? determined or penaltyhtlposedprior to or . Wf such discon?uance and subjectas af9,:-esaid, . 'Ute provjsions of . this Act shall, so far as triay be. apply?· if every such person of partn?r or niember i?re)ilinscl(a taxable,?1Lr ·,. ' (2) W];lere. a cbang? has occurred in the constitution of a firfflftt.' .· usodatioWof?ns, thepartners <ttthe finn orllje?fs of assoaatiBn,'as·itmsted before and as it · ? 1ffler the tec<>nsti?tt,?11, f11a1J, wtth?Jf prtjudice to thi provisions of ?on'?, jointly an4 severally, be li,?le to pay? interest"?r?@ty due from su? firm or ?oda,tion;for any periq? before i?, reconsU??on. l (3) The p?mons·.??J!\>:section (1) sh?, so ra;as 'may be, apply where the taxable person, being a firm pr associati<m ofpersons is dissolved or where the taxalJle person, being a Hindu t1n&vided Family, has effected partition with respect . t6 ·t1ie •. business carried} on by it and ·. accordingly references in . thatsub-section to discohtinuan? shall .. ' be construed . as reference to dissolutio?;i. as the?? may be, to partition. Explanation:-For the purposes of this ?hap?er,- . ( a) · a ?Linuted Liability Partn?ip" formeq anq ,J?gi?re? , under, the provisi<.>ns of ?JJmited Li.ability Pat:tn?p . Act,