Penalty on both partnership firm and partners set aside where simultaneous imposition was held unsustainable.

Penalties imposed on partnership firms and their partners were held unsustainable where the appeals were confined to the penalty component and the underlying manufacture issue was not decided. The Tribunal applied the principle that penalty cannot be imposed simultaneously on a partnership firm and its partners on the same facts. As the controversy on the underlying activity remained unresolved and the penalty basis was defective, the penalties were set aside.

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Issues: Whether the penalties imposed on the partnership firms and their partners were sustainable.

Analysis: The appeals were confined to the penalty component. The Tribunal noted that the issue of manufacture was not being decided and that two Tribunal decisions had taken opposite views on the underlying activity. It also considered the principle that penalty cannot be simultaneously imposed on a partnership firm and its partners.

Conclusion: The penalties were set aside.

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