Transferee liability under tax law extends to recovery, and special recovery powers survive instalment arrangements.

A transferee deemed to be the registered dealer under section 19(1) in respect of unpaid tax is treated as such for the full operation of the taxing statute, so the legal fiction extends beyond assessment to recovery proceedings as well. The court also held that the special non obstante recovery power under section 13-A is not displaced by instalment arrangements recorded in certificate proceedings, because the provision allows recovery despite parallel payment terms and the revenue was not shown to have accepted the instalment arrangement. On that reasoning, the recovery action against the transferee was upheld and the writ challenge failed.

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Issues: (i) Whether, on transfer of the business, the transferee could be treated as liable under the legal fiction in section 19(1) only for determining tax liability, or whether that fiction also extended to recovery proceedings under section 13-A; (ii) Whether, after instalments were fixed in certificate proceedings, the sales tax authorities could still proceed under section 13-A for recovery of the tax due.

Issue (i): Whether, on transfer of the business, the transferee could be treated as liable under the legal fiction in section 19(1) only for determining tax liability, or whether that fiction also extended to recovery proceedings under section 13-A.

Analysis: The transferee was statutorily deemed to be the registered dealer in respect of unpaid tax remaining due on the date of transfer. Such a legal fiction had to be fully worked out and could not be confined merely to the ascertainment of liability. Once the transferee was treated as a dealer for the purpose of section 19(1), the other provisions of the Act governing assessment, levy, and recovery applied to him as well.

Conclusion: The legal fiction extended to recovery also, and the transferee was liable to be proceeded against under the Act.

Issue (ii): Whether, after instalments were fixed in certificate proceedings, the sales tax authorities could still proceed under section 13-A for recovery of the tax due.

Analysis: Section 13-A conferred a wide non obstante power permitting special recovery from persons owing money to the dealer. The existence of instalment arrangements in certificate proceedings did not curtail that statutory power. The section was not confined to money immediately payable under an instalment order, and the revenue authority was not bound to treat the instalment amount as the only sum recoverable. The factual finding that the department had not agreed to the instalment arrangement also stood against the petitioner.

Conclusion: The sales tax authorities were entitled to invoke section 13-A notwithstanding the instalment order.

Final Conclusion: The challenge to the recovery action failed on both grounds, and the writ petition was dismissed.

Ratio Decidendi: A statutory legal fiction deeming a transferee to be the registered dealer for unpaid tax must be given full effect for all consequences under the taxing statute, including recovery provisions, and a special non obstante recovery power is not displaced by parallel instalment arrangements in another proceeding.

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