In M/S. Hannah Career Excellence LLP v. CTO, the Kerala High Court held that while obtaining KVAT Registration, the LLPs are required to follow the rules applicable to Partnership Firms since there is no specific provision for LLPs.
The petitioner, LLP approached the Court contending that they are not obliged to comply with the Departmental communication issued by the Commercial Tax Officer since s. 17(8)(vi) only refers to Partnership Firms. The Petitioner urged that as per Section 4 of the LLP Act, the provisions of the Indian Partnership Act, 1932, are not applicable to LLPs.
Section 17(8)(iv) of the KVAT Rules provides that “in the case of a partnership firm [by an attested copy] of the partnership deed and a declaration in Form No.2, signed by all the partners stating the names and addresses of all the partners and their respective shares in the business [and a certified copy of the resolution to apply for registration and authorizing a partner to file application on its behalf]
Dismissing the petition, Justice Vinod Chandran said that the petitioner is a partnership firm, though one of limited liability to the partners and in Rule 17, there is no reference to the Indian Partnership Act.
“The LLP Act came into force in 2008 after the KVAT Act and Rules were framed. It was not in the contemplation of the rule making authority or the legislature of such a legal entity, ie; the limited liability partnership. In such circumstance, the petitioner being a partnership; though of limited liability, would have to comply with all the necessary incidence of an application to be made by a partnership firm as provided under the KVAT Rules. In such circumstance, the petitioner would have to comply with Ext.P6, by way of providing a declaration in form No.2, signed by all the partners with details as shown therein.”
“However, with respect to the affidavit to be filed, the form of which is available in the rule itself indicates that the same could be filed by a proprietor/managing partner / managing director/ director or manager. Hence the affidavit as directed in Ext.P6 could be filed by the managing partner, who as per the Partnership Act is the Designated Partner and the details of PAN card and bank accounts would be available in the declaration to be filed. The petitioner would be entitled to comply with the aforesaid directions before the registering authority.”
Read the full text of the Judgment below.
