High Court lifts bank account attachment, retired partner not liable for penalty, payment due in 6 months

The High Court ruled in favor of the petitioner, lifting the attachment on his bank account imposed by the revenue department for a penalty as a partner of a firm. The court held that the petitioner, as a retired partner, was not liable for the penalty as the firm's challenge to the order of adjudication was successful. The court directed the petitioner to pay the remaining balance within six months to have the attachment lifted, warning of enforcement measures if he failed to comply.

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Issues:
1. Request to raise attachment on bank account due to penalty levied on petitioner as a partner.
2. Liability of petitioner for penalty as a retired partner of the firm.
3. Recovery of past dues and balance amount from petitioner.
4. Disputed penalty amount and attachment of bank account.
5. Directions for payment and consequences of non-compliance.

Analysis:
1. The petitioner sought relief from the High Court to lift the attachment on his bank account imposed by the revenue department due to a penalty of Rs. 2,00,000 levied on him as a partner of a firm. The petitioner clarified that he had retired from the partnership firm, and no show cause notice or order of adjudication was issued to him in his capacity as a partner.

2. The court considered the liability of the petitioner for the penalty, emphasizing that the firm had challenged the order of adjudication in appeal, which was subsequently set aside by the Tribunal. As a result, the demand for tax did not survive, leading to the conclusion that the penalty imposed on the petitioner also did not stand. The court highlighted that even if a partnership firm has no independent existence from its partners, the liability of the partner ceases upon retirement or resignation.

3. Regarding the recovery of past dues, it was noted that a significant amount had already been adjusted by the revenue department from the petitioner's bank accounts. The court directed the petitioner to pay the balance amount within six months to have the attachment lifted. The court also mentioned the recovery of outstanding dues from the firm's assets and the petitioner's liability to pay the remaining sum.

4. The court scrutinized the disputed penalty amount and the attachment of the bank account in detail. It was observed that the petitioner's retirement from the firm was undisputed, and the demand for the penalty, which was set aside in the original order, was deemed invalid. The court clarified that the petitioner was only liable to pay the balance amount as indicated by his representative.

5. In conclusion, the court disposed of the writ petition by instructing the petitioner to pay the remaining sum within three months and report compliance to the Commissioner. Upon compliance, the attachment on the bank account would be lifted, allowing the petitioner to operate it. However, failure to pay could result in the attachment and sale of the petitioner's movable and immovable properties to enforce the demand, as per the court's directions.

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