Central sales tax arrears may be recovered from partners using State recovery provisions under the enforcement machinery

Central sales tax arrears, once finally determined against a partnership firm, could be recovered through the State recovery machinery invoked under section 9(2) of the Central Sales Tax Act, 1956. The Court treated the Kerala General Sales Tax Act, 1963 recovery provisions as governing the mode of enforcement and held that section 21, which makes the firm and its partners jointly and severally liable for amounts payable under the Act, could be used to enforce the outstanding dues against the partners. The objection to partner-level recovery was rejected, and the writ petition failed.

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Issues: Whether arrears of tax due under the Central Sales Tax Act, 1956, though assessed for earlier years, could be recovered from the partners of the firm by resort to section 21 of the Kerala General Sales Tax Act, 1963 in proceedings under section 9(2) of the Central Sales Tax Act, 1956.

Analysis: The liability had already been finally determined against the partnership firm. Section 9(2) of the Central Sales Tax Act, 1956 authorises the State authorities to assess, reassess, collect and enforce payment of Central sales tax as if the tax were payable under the State sales tax law. In that setting, the Court treated the State recovery machinery as governing the mode of collection, not merely the law in force on the assessment date. The Court also noted that section 21 of the Kerala General Sales Tax Act, 1963 creates joint and several liability of the firm and its partners for amounts payable under the Act, and held that this recovery provision could be invoked for enforcing the outstanding Central sales tax dues against the partners.

Conclusion: The objection to recovery from the partners was rejected, and resort to section 21 of the Kerala General Sales Tax Act, 1963 for recovery of the firm's Central sales tax arrears was held permissible.

Final Conclusion: The writ petition failed, and the recovery action against the partners was sustained.

Ratio Decidendi: Where Central sales tax arrears are recovered by State authorities under section 9(2) of the Central Sales Tax Act, 1956, the State recovery provisions applicable at the stage of enforcement may be applied to collect the dues from the persons made liable under those provisions.

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