TaxTMI 
TaxTMI 
1998 (11) TMI 627
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....Pawan Kumar at Old Anaj Mandi, Ambala City. The petitioner stood surety for the firm M/s. Jai Laxmi Rice Mills, which consisted of three partners, Gulshan Kumar and his two sons, Dhanender Kumar and Narinder Kumar. The petitioner executed a surety bond in form ST-50 on September 21, 1987 standing as surety for the said firm in the sum of Rs. 50,000 for securing the payment of sales tax by the firm under the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956. One of the conditions in the bond was that the bond could be terminated by giving six months' notice in writing to the Assessing Authority. Two partners, namely, Dhanender Kumar and Narinder Kumar of M/s. Jai Laxmi Rice Mills, retired on April 1, 1993. Gulshan Ku....
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...., the action taken by the Excise and Taxation Officer against the petitioner is said to be in contravention of the conditions of the surety bond. 4.. The petitioner has challenged the issuance of warrant of attachment and arrest against him. His plea is that no tax liability could be raised against him after he had withdrawn as surety on September 20, 1995. The amount of tax is sought to be wrongly recovered from him after the expiry of six months from the date of withdrawal. Since it is not legally permissible to recover tax from the petitioner, the action of the respondents is said to be wholly illegal and without jurisdiction. 5.. Shri A.K. Mittal, learned counsel for the petitioner, has also argued that the partnership firm, M/s. ....
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....titioner continued till the surety bond was cancelled. The dissolution of the firm or the cancellation of the registration certificate would not help the petitioner inasmuch as the tax liability sought to be recovered relates to the period during which M/s. Jai Laxmi Rice Mills was functioning as a partnership firm. The petitioner is liable as a surety to pay the tax dues of the firm till the expiry of six months from September 20, 1995, the date of the letter of withdrawal submitted by the petitioner before the Excise and Taxation Officer. The petitioner's liability ceased after March 19, 1996 only. The sales tax liability, which became due against the firm up to the year 1992-93, was payable by the petitioner to the extent of Rs. 50,000. ....
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....w firm after its re-constitution on April 1, 1993. No recovery of tax dues, arising against the new firm, can be made from the petitioner. The Excise and Taxation Officer can also recover tax dues from the erstwhile partners. The petitioner has pointed out in his petition that Dhanender Kumar and Narinder Kumar, the erstwhile partners of the firm, are running a new business as partners in the name and style of M/s. J.L. Rice Mills, Hisar Road, Nasirpur, Ambala City. It is stated that they have sufficient credit balances in their capital accounts in M/s. J.L. Rice Mills. 9.. As has been seen, sales tax liability, for the assessment year 1988-89, exists against M/s. Jai Laxmi Rice Mills. There is some liability for other years also. ....