Liability of Tax of Dissolved Firm, Etc

Liability of tax of dissolved firm, etc (1) Where a dealer is a firm or association of persons or a joint Hindu family, and such firm, association or family has discontinued business
(a) tax, including penalty, payable under this Act by such firm, association or family up to the date of such discontinuance may be assessed and determined 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 severally and jointly for the payment of tax assessed and penalty imposed and payable by such firm, association or family whether such assessment is made or penalty is imposed prior to or after such discontinuance, and subject as aforesaid, the provisions of this Act shall apply as if every such person or partner were himself a dealer:
PROVIDED that where it is found that a change has occurred in the constitution of the firm or association, the firm or association as reconstituted as well as partners or members of the firm or association, as it existed before reconstitution, shall jointly and severally be liable to pay any tax including penalty, if any, due from such firm or association for any period before its reconstitution.
(2) Liability to tax of transferee: Where the ownership of the business of any dealer liable to pay taxis transferred, the transferor and the transferee shall jointly and severally be liable to pay the tax including penalty, if any, payable in respect of such business till the time of such transfer, whether the assessment is made or the penalty is imposed prior to or after such transfer.
(3) Where a tax including penalty, if any, is recovered from a reconstituted firm or association under the proviso to sub-section (1) or from a transferee under sub-section (2), such firm or association or a transferee shall be entitled to recover the same from the person who was originally liable to pay the tax.
Explanation: The dissolution or reconstitution of firm or association of persons or transfer by a dealer of his business or partition of a Hindu undivided family shall be deemed to be discontinuance of business within the meaning of this section.