Ramesh Chand Vs State of H.P and others (Himachal Pradesh High Court)
The Himachal Pradesh High Court considered a writ petition challenging a recovery notice dated 09.09.2024 issued against the petitioner, who had earlier been a partner in M/s Biologics INC, a partnership firm. The petitioner contended that he had ceased to be a partner after reconstitution of the firm on 19.02.2025 and that the reconstituted partnership firm had already filed a statutory appeal against the demand before the competent authority. Pursuant to the Court’s earlier directions, the respondents placed office instructions on record and the Assistant Commissioner, State Taxes & Excise, Nahan, appeared before the Court.
The respondents stated that the firm had been registered under the H.P. VAT Act, 2005 and the CST Act, 1956, continued under the GST regime, and that assessment for 2015-16 to 2017-18 had been finalized on 01.09.2023, creating an additional demand of ₹43,94,410, of which ₹10,77,860 had already been recovered. The balance demand had been declared recoverable as arrears of land revenue under Section 75 of the H.P. Land Revenue Act, 1954, and recovery proceedings had been initiated. The respondents further submitted that, under Sections 25, 26 and 27 of the H.P. VAT Act, partners were jointly and severally liable for tax liabilities, interest, and penalty.
The petitioner requested that no coercive action be taken until the statutory appeal filed by the reconstituted partnership firm was decided. The respondents acknowledged that the appeal was pending, though delayed by thirty months, and was listed for hearing on 03.08.2026. Without examining the merits, the High Court disposed of the writ petition by directing that no coercive action be taken against the petitioner on the basis of the recovery letter dated 09.09.2024 until the pending statutory appeal preferred by the partnership firm is decided.
FULL TEXT OF THE JUDGMENT/ORDER OF HIMACHAL PRADESH HIGH COURT
The grievance of the petitioner was noticed in the following order passed in this writ petition on 20.07.2026:-
“Notice. Mr. L.N. Sharma, learned Additional Advocate General, appears and waives service of notice on behalf of the respondents.
Petitioner feels aggrieved against recovery notice dated 09.09.2024 (Annexure P-1). In nutshell, his case is that the dispute in question is between the State Excise & Taxation Department and M/s Biologics INC-a partnership firm, of which the petitioner was a partner at one stage. The petitioner has since ceased to be partner in the firm. New partner stands inducted. There is constitution of a new partnership firm and the said new partnership firm has already preferred an appeal before the competent authority against the intended realization of the amount in question.
Let learned Additional Advocate General to have instructions about the efficacy of Annexure P1, dated 09.09.2024, in the present scenario.
List on 21.07.2026.”
Pursuant to above, learned Deputy Advocate General has placed on record office instructions dated 21.07.2026 in compliance to the directions issued in the further order passed in this matter on 21.07.2026. Today’s hearing has also been attended by Mr. Avinash Chauhan, Assistant Commissioner, State Taxes & Excise, Nahan. The officer present has apprised that new partnership firm constituted on 19.02.2025 though did not have petitioner as its partner but this fact did not have any relevance as:- The partnership firm- M/s Biologic Inc Ogli was registered under H.P.VAT Act, 2005 and CST Act, 1956; The partnership firm had two partners- real brothers with 50% share each including the present petitioner. This firm continued business in same constitution under H.P VAT/CST Act, upto 30.06.2017 and migrated to GST regime with same constitution. The assessment case of partnership firm for the years 201516 to 2017-2018 was finalized on 01.09.2023 whereby additional demand of ₹43,94,410/- was held recoverable for the period in question. The officer has further apprised that out of aforesaid amount due against the partnership firm, the respondents have already effected recovery to the extent of ₹10,77,860/-; The additional demand was declared as arrears of land revenue on 18.09.2023 under Section 75 of the H.P. Land Revenue Act, 1954. Thereafter, recovery proceedings were initiated. The District Collector,Sirmour on 21.09.2024 wrote to District Collector, Karnal, Haryana for recovery of aforesaid amount as both the partners-real brothers belonged to Indri, Karnal, Haryana. On the basis of instructions imparted by Mr. Avinash Chauhan, Assistant Commissioner, State Taxes & Excise, Nahan and also on the basis of office instructions dated 20.07.2026, learned Deputy Advocate General submits that in terms of Sections 25, 26 & 27 of H.P. VAT Act, all partners are jointly and severally responsible for payment of all tax liabilities, including interest and penalty..
2. Learned counsel for the petitioner submits that new partnership firm as constituted on 19.02.2025 has preferred statutory appeal against the demand raised by the respondent. The said appeal is pending adjudication before the Competent Authority. Till the decision of the aforesaid appeal, coercive action be not taken against the petitioner. Learned Deputy Advocate General on the basis of instructions imparted to her admits the pendency of the statutory appeal instituted by the partnership firm and submits that said appeal is barred by thirty months and is fixed for hearing on 03.08.2026.
3. Looking to the facts of the case, the instructions placed on record and the submissions made by learned Deputy Advocate General, as also, Mr. Avinash Chauhan, Assistant Commissioner, State Taxes & Excise, Nahan but without examining merits of the matter, it is deemed appropriate to dispose of this writ petition with the order that till the decision of the time barred statutory appeal preferred by the partnership firm, no coercive action be taken against the petitioner on the basis of office letter dated 09.09.2024.
4. This writ petition is disposed of in the above terms. Pending miscellaneous application(s), if any, to also stand disposed of.
Notes:
1 Whether reporters of print and electronic media may be allowed to see the order? Yes.
