32. Liability in case of transfer of business.—(1) Where a dealer, liable to pay tax under this Act,
transfers his business in whole or in part, by sale, gift, lease, leave or licence, hire or in any other manner
whatsoever, the dealer and the person to whom the business is so transferred shall jointly and severally be
liable to pay the tax (including any penalty) due from the dealer up to the time of such transfer, whether
such tax (including any penalty) has been assessed before such transfer, but has remained unpaid or is
assessed thereafter.
(2) Where the transferee or the lessee of a business referred to in sub-section (1) carries on such
business either in his own name or in some other name, he shall be liable to pay tax on the sale of goods
effected by him with effect from the date of such transfer and shall, if he is an existing dealer, apply
within the prescribed time for amendment of his certificate of registration.
33. Liability in case of company in liquidation.—(1) Every person—
(a) who is a liquidator of any company which is being wound up whether under the orders of a
court or otherwise; or
(b) who has been appointed the receiver of any assets of a company (hereinafter referred to as the
“liquidator”),
shall, within thirty days after he has become such liquidator, give notice of his appointment as such to the
Commissioner.
(2) The Commissioner shall, after making such inquiries or calling for such information as he may
deem fit, notify the liquidator within three months from the date on which he received notice of the
appointment of the liquidator, the amount which, in the opinion of the Commissioner, would be sufficient
to provide for any tax (including any penalty) which is then, or is likely thereafter to become, payable by
the company.
(3) The liquidator shall not part with any of the assets of the company or the properties in his hand
until he has been notified by the Commissioner under sub-section (2) and on being so notified, the
liquidator shall set aside an amount equal to the amount notified and, until he so sets aside such amount,
he shall not part with any of the assets of the company or the properties in his hand:
Provided that nothing contained in this sub-section shall debar the liquidator from parting with such
assets or properties in compliance with any order of a court or for the purpose of the payment of the tax
and penalty, if any, payable by the company under this Act or for making any payment to secured
creditors whose debts are entitled under law to priority of payment over debts due to Government on the
date of liquidation or for meeting such costs and expenses of the winding up of the company as are in the
opinion of the Commissioner reasonable.
(4) If the liquidator fails to give notice in accordance with sub-section (1) or fails to set aside the
amount as required by sub-section (3) or parts with any assets of the company or the properties in his
hand in contravention of the provisions of that sub-section, he shall be personally liable for the payment
of the tax and penalty, if any, which the company would be liable to pay under this Act:
Provided that if the amount of any tax and penalty, if any, payable by the company is notified
under sub-section (2), the personal liability of the liquidator under this sub-section shall be to the extent of
such amount.
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(5) Where there are more liquidators than one, the obligations and liabilities attached to the liquidator
under this section shall attach to all the liquidators jointly and severally.
(6) When any private company is wound up and any tax and penalty, if any, assessed under this Act
on the company for any period, whether before or in the course of or after its liquidation, cannot be
recovered, then every person who was director of the private company at any time during the period for
which the tax is due, shall be jointly and severally liable for the payment of such tax and penalty, if any,
unless he proves to the satisfaction of the Commissioner that non-recovery cannot be attributed to any
gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company.
(7) The provisions of this section shall have effect notwithstanding anything to the contrary contained
in any other law for the time being in force.
(8) For the purposes of this section, the expressions “company” and “private company” shall have
the meanings respectively assigned to them under clauses (i) and (iii) of sub-section (1) of section 3 of the
Companies Act, 1956 (1 of 1956).
34. Liability of partners of firm to pay tax.—Notwithstanding any contract to the contrary, where
any firm is liable to pay any tax (including any penalty) under this Act, the firm and each of the partners
of the firm shall be jointly and severally liable for such payment:
Provided that where any such partner retires from the firm, he shall intimate the date of his retirement
to the Commissioner by a notice in that behalf in writing and he shall be liable to pay tax (including any
penalty) remaining unpaid at the time of his retirement and any tax (including any penalty) due up to the
date of his retirement though unassessed on that date:
Provided further that if no such intimation is given within fifteen days from the date of retirement, the
liability of the partner under the first proviso shall continue until the date on which such intimation is
received by the Commissioner.
35. Liability of guardians, trustees, etc.—Where the business in respect of which tax is payable
under this Act is carried on by, or is in the charge of any guardian, trustee or agent of a minor
or other incapacitated person on his behalf and for the benefit of such minor or other incapacitated person,
the tax (including any penalty) shall be levied upon and recoverable from such guardian, trustee or agent,
as the case may be, in like manner and to the same extent as it would be assessed upon and recoverable
from any such minor or other incapacitated person, if he were of full age and of sound mind and if he
were conducting the business himself, and all the provisions of this Act shall, so far as may be, apply
accordingly.
36. Liability of Court of Wards, etc.—Where the estate or any portion of the estate of a dealer
owning a business in respect of which tax is payable under this Act is under the control of the Court of
Wards, the Administrator-General, the Official Trustee or any receiver or manager (including any person,
whatever be his designation, who in fact manages the business) appointed by or under any order of a
court, the tax (including any penalty) shall be levied upon and be recoverable from such Court of Wards,
Administrator-General, Official Trustee, receiver or manager in like manner and to the same extent as it
would be assessable upon and be recoverable from the dealer if he were conducting the business himself;
and all the provisions of this Act shall, so far as may be, apply accordingly.
37. Liability in other cases.—(1) Where a dealer is a firm or an association of persons or a Hindu
undivided family, and such firm, association or family has discontinued business—
(a) the tax payable under this Act, by such firm, association or family up to the date of such
discontinuance may be assessed as if no such discontinuance had taken place; and
(b) every person who was at the time of such discontinuance a partner of such firm, or a member
of such association or family, shall, notwithstanding such discontinuance, be liable jointly and
severally for the payment of tax assessed and penalty imposed and payable by such firm, association
or family, whether such tax (including any penalty) has been assessed prior to or after such
discontinuance, and subject as aforesaid, the provisions of this Act shall, so far as may be, apply as if
every such person or partner or member were himself a dealer:
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Provided that where the partner of a firm liable to pay such tax (including any penalty) dies, the
provisions of sub-section (4) shall, so far as may be, apply.
(2) Where a change has occurred in the constitution of a firm or association, the partners or members
of the firm or association as it existed before and as it exists after its re-constitution, shall, without
prejudice to the provisions of section 34, jointly and severally be liable to pay any tax (including any
penalty) due from such firm or association for any period before its re-constitution.
(3) The provisions of sub-section (1) shall, so far as may be, apply where the dealer, being a firm or
association of persons, is dissolved or where the dealer, being a Hindu undivided family, has effected
partition with respect to the business carried on by it and accordingly references in that sub-section to
discontinuance shall be construed as references to dissolution or, as the case may, to partition.
(4) Where a dealer liable to pay tax under this Act dies, than—
(a) if the business carried on by the dealer is continued after his death by his legal representative
or any other person, such legal representative or other person, shall be liable to pay the tax (including
any penalty) due from the dealer under this Act, whether such tax (including any penalty) has been
assessed before his death but has remained unpaid, or is assessed after his death;
(b) if the business carried on by the dealer is discontinued after his death, his legal
representative shall be liable to pay out of the estate of the deceased, to the extent the estate is capable
of meeting the charge, the tax (including any penalty) due from the dealer under this Act, whether
such tax (including any penalty) has been assessed before his death but has remained unpaid, or is
assessed after his death,
and the provisions of this Act shall, so far as may be, apply to such legal representative or other person as
if he were the dealer himself.
Explanation.—For the purposes of this sub-section and section 40, “legal representative” has
the meaning assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908 (5 of 1908).