• Sales tax dues notice

Dear sir I was working for one Gentleman Mr X in mumbai. He had several companies all registered on the name of employees like sales manager / production manager / even his driver therefore he used to make his employees sign the partnership deed to run the company from behind the scene as he had his malafide intentions which we were not aware. He took us in good faith and made us signed those deeds. Like this there are 5 to 6 employees who were made partner on his instructions. He never wanted to become the partner of the company becuase he used to tell him employees that he had some old legal matters running so he cant own any company. So in one of his compnay he made me enter a partnership deed along with one more of his employee. So basically i am saying i along with others were dummy partners . Under his instructions I signed the partnership deed without reading or understanding the consequences. 
I left the firm in 2015 and joined another company. But in 2021 I received a notice of sales tax dues on my name regarding the same firm where I was made partner . Is there a way I can prove that I was not involved in any managerial decision and my role was limited to sales and marketing. That particular compnay where I was made partner has defaulted on paying sales tax dues. I have the retirement deed with me but the actual deed where i was introduced in the company is not available with me. With no knowledge of the business activities happening in the firm I am being slapped with notices for dues which are running in crores. I am seeking legal advice to understand. That as a employee who use to get 45000 monthly salary. How can I handle these notices. After my exit from the firm. Me and my boss are not in contact.
Asked 5 years ago in Taxation

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3 Answers

Firm and partners are jointly and severally liable for payment of sales tax dues

 

2)  

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.

 

3) you have not mentioned period for which claims have been made 

 

4) Partnership deed and deed of retirement must have been registered with registrar of firms 

 

5) take search in registrar of firm for copy of partnership deed and deed of retirement 

Ajay Sethi
Advocate, Mumbai
100092 Answers
8174 Consultations

If you have received a notice from the taxation department then it becomes your duty either to pay the tax demanded or to defend your interest by producing documentary evidences to prove that you are not liable to pay any such taxes. 

Whether you were a dummy partner or an effective partner, as far as the partnership registration deed is concerned you are a partner of the firm 

You canot say that you ere just an employee hence the salary you received is the salary allotted to the working partner, therefore on that basis you cannot claim yourself as an employee. 

You may consult a local advocate , discuss the subject matter at length and proceed as suggested. 

T Kalaiselvan
Advocate, Vellore
90295 Answers
2513 Consultations

You are victim of fraud by your employer. Reply to the notice  stating the facts and file a fraud case against employer. Only if you file fraud case against him you can prove your innocence.

Ravi Shinde
Advocate, Hyderabad
5133 Answers
42 Consultations

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