Recovery against partner's heirs requires a certificate in their name; proceedings based only on the firm's certificate were quashed.

An individual partner or the heirs of a deceased partner cannot be subjected to coercive recovery of income-tax arrears when the tax recovery certificate is issued only in the name of the partnership firm. The Court applied the earlier Division Bench view that a person cannot be proceeded against unless the recovery certificate specifically names that person, and the Department must first obtain an appropriate certificate against the proposed defaulter before enforcing recovery. On that basis, recovery proceedings founded solely on a certificate against the firm were held unsustainable and were quashed.

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Issues: Whether an individual partner or the heirs of a deceased partner can be proceeded against for recovery of income-tax arrears on the basis of a tax recovery certificate issued only in the name of the firm.

Analysis: The recovery certificate had been issued against the partnership firm alone and not against the individual partner or his heirs. The Court followed the earlier Division Bench view that an individual partner cannot be proceeded against on the basis of a certificate that does not name him, and that the Department must first issue an appropriate certificate against the person sought to be proceeded against before coercive recovery can be made.

Conclusion: The recovery proceedings against the petitioners, founded on the certificate issued only against the firm, were unsustainable and were quashed.

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