TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Joint Liability of Association Members for Trade Tax Assessment Upheld by Court</h1> The Court affirmed the assessment of trade tax on an Association of Persons run by three brothers, holding the liability as joint and several. Despite the ... Validity of assessment order - Levy of Trade Tax - association of persons - HELD THAT:- While making the assessment assessing authority was of the view that the business is being run by three brothers namely Pradeep Kumar, Kamlesh Kumar and Vimlesh Kumar and, therefore, treating them to be association of persons the said assessment order has been passed. The assessment has been made against the firm namely Pradeep Khad Bhandar which has challenged the assessing orders as well as both the appellate orders. Against the said order of assessment an appeal was filed which was allowed by the Joint Commissioner (Appeal) - Ist, Lucknow thereby holding that all the three persons were part of the association of persons and directions were issued to the assessing authority to pass a fresh assessment order considering them to be an association of persons and issue them individual notices before finalizing the said assessment. It is noticed that there is no dispute in the present case with regard to the assessment order but the grievance pertains only that the said Association of Persons has been described as S/Sh Pradeep Khad Bhandar and, accordingly, the liability to pay the tax for Association of Persons would fall directly on the revisionist. It is stated that the other two partners are also liable to pay the Trade Tax as per the assessment order. In the present case it is noticed that the said Association of Person is being run by the three brothers while the firm is being run by only one brother, i.e., revisionist has been made liable to pay the amount of Trade Tax and, accordingly, even if the revisionist pays the tax as assessed, he can always recover it from other members of the Association of Person as the liability is joint and several but merely on this score the validity of the impugned orders cannot be doubted - this Court does not find any infirmity with the assessing order or with order passed by the Commercial Tax Tribunal and it is left open to the petitioner to recover the outstanding amount of the tax from the other members of the Association of Person in accordance with law. The revision is dismissed. Issues:The issues involved in the judgment are the assessment of trade tax as an Association of Persons, the liability of individual partners in the association, and the challenge to the orders of Assistant Commissioner, Joint Commissioner (Appeal), and Commercial Tax Tribunal.Assessment of Trade Tax as Association of Persons:The revisionist, a firm named M/S Pradeep Khad Bhandar, was assessed to trade tax as an Association of Persons by the assessing authority based on the belief that the business was run by three brothers together. This assessment was challenged through appeals which were subsequently rejected, leading to the filing of the present revision.Liability of Individual Partners in the Association:The main contention raised in the revision was that although the assessment was made treating the business as an association of persons, only the revisionist was made liable for payment of the Trade Tax. The revisionist argued that the liability under the association of persons should be joint and several for all partners/members of the firm.Judgment Details:The Court noted that the assessment order correctly identified the revisionist as an Association of Persons run by the three brothers. Even though the firm was operated by only one brother, the liability to pay the Trade Tax was imposed on the revisionist. The Court affirmed that the revisionist could recover the tax amount from the other members of the association as the liability was joint and several.Legal Precedent:The judgment referred to the case law Commissioner of Trade Tax vs. Laxmi Vanaspati and Oil Company, Varanasi, which highlighted the definition and requirements for forming an association of persons. It emphasized that members must join together for the purpose of producing income, and there should be sharing of profit and loss to constitute an association of persons.Conclusion:In conclusion, the Court found no fault with the assessing order or the decisions of the lower authorities. The revision was dismissed, allowing the petitioner to recover the outstanding tax amount from the other members of the association in accordance with the law.
TaxTMI 
TaxTMI 
