02/08/2026
Can a partner who has resigned from a partnership firm still be held liable for old GST dues? โ๏ธ
A recent court ruling has made the position very clear under GST law in India.
In this case, a partner resigned from a partnership firm in 2020. However, the GST department later issued a demand related to the financial year 2019โ20, when he was still an active partner.
Neither the firm nor the partners filed an appeal against the GST demand, and it eventually became final.
Later, the department initiated recovery proceedings under Section 79 of the CGST Act and even issued notices to the former partnerโs bank account.
The argument raised was simple: โHe has already resigned from the firm.โ
But the court held otherwise.
The court observed that since the GST liability arose during the period when he was an active partner, he remains jointly responsible for the tax dues of that period.
Therefore, recovery action against the former partner was held to be legally valid.
Key takeaway:
โ Resignation from a partnership does NOT erase past GST liabilities
โ Partners can be held responsible for dues of the period they were active
โ Unchallenged GST demands become final and enforceable
โ Recovery under Section 79 can extend to partnersโ personal assets
โ ๏ธ Important GST Advisory:
Never ignore a GST demand notice. If you disagree, file an appeal within the prescribed time. Once it becomes final, recovery proceedings can be initiated.
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