Partnership retirement not proved, so former partners remained liable for firm's tax arrears and recovery proceeded.

Persons claiming to have retired from a dealer-firm remained liable for the firm's sales tax dues because the alleged retirement was not shown to be legally effective under the Indian Partnership Act, 1932. No material established retirement by consent, express agreement, notice in a partnership at will, or public notice, so they continued to be partners in law and able for the firm's obligations. As the tax liability was that of the dealer-firm, the recovery provision permitted realisation of the arrears as land revenue from the dealer and its partners. The objection concerning attachment of property of third parties was treated as disputed and was not finally decided.

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Issues: Whether the petitioners who claimed to have retired from the dealer-firm remained liable for the sales tax dues of the firm under the law governing partnership and recovery of tax arrears.

Analysis: The claim of retirement was not supported by material showing retirement in accordance with the Indian Partnership Act, 1932. There was no proof of retirement by consent, express agreement, notice in the case of a partnership at will, or public notice of retirement. In the absence of legally effective retirement, the petitioners continued to be partners in the eye of law and remained liable for the firm's obligations. The tax liability was that of the dealer-firm, and under the recovery provision the amount due could be realised as an arrear of land revenue from the dealer and its partners. The petition also raised an objection regarding attachment of property belonging to others, but that question was treated as disputed and was not adjudicated finally.

Conclusion: The petitioners were held liable for the tax dues of the firm, and the challenge to the recovery proceedings failed in favour of the revenue.

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