Joint and several liability of HUF members allowed recovery by arrest against the karta named in the recovery certificate.
A Hindu undivided family was treated under the U.P. Sales Tax Act as a separate taxable dealer, and on discontinuance of business section 3-C(1)(b) created a legal fiction making every member at the time of discontinuance jointly and severally liable for the family's tax and penalty. That consequence extended to the karta as well, so if he was named in the recovery certificate under section 33, recovery proceedings could be taken against him as a defaulter, including arrest and detention.
Issues: Whether the karta of a Hindu undivided family that has discontinued business can be arrested in recovery proceedings for arrears of sales tax and penalty due from the family for the period prior to discontinuance.
Analysis: Under the U.P. Sales Tax Act, a Hindu joint family is treated as a separate taxable entity and a "dealer". On discontinuance of business, section 3-C(1)(b) creates a legal fiction by making every person who was a member of the family at the time of discontinuance jointly and severally liable for the tax and penalty payable by the family, and the Act then applies to such member as if he were himself the dealer. The Court held that this consequence extends to the karta as well. If the karta is shown in the recovery certificate contemplated by section 33, he can be proceeded against in recovery, including by arrest and detention.
Conclusion: Yes. The karta of a Hindu undivided family which has discontinued business can be arrested in recovery proceedings for arrears of sales tax and penalty due from the family for the pre-discontinuance period, provided he is named in the certificate under section 33 of the Act.
Ratio Decidendi: Where the statute treats a discontinued Hindu undivided family and its members as jointly and severally liable through a legal fiction, recovery proceedings may be taken against the karta as a defaulter if he is specifically named in the recovery certificate.
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