Sales-tax recovery from third-party debtors can proceed as arrears of land revenue after notice and certification.

Under section 17 of the Bombay Sales Tax Act, 1953, a Collector may require a person owing money to a dealer, or holding money for the dealer, to pay tax and penalty arrears after notice, with objections available to the noticee. If liability is not disproved, the amount becomes recoverable as arrears of land revenue. Once certified and transmitted, section 3 of the Revenue Recovery Act, 1890 enables recovery by the Collector of another district, and the noticee's remedy lies in the statutory protest-and-suit mechanism under section 4.

---

---

Issues: Whether the amount recoverable from a debtor of the sales-tax defaulter could be realised under section 17 of the Bombay Sales Tax Act, 1953 and section 3 of the Revenue Recovery Act, 1890, and whether the impugned demand notices were valid.

Analysis: Under section 17 of the Bombay Sales Tax Act, 1953, the Collector could require any person from whom money was due to the dealer, or who held money on the dealer's account, to pay the amount towards the dealer's tax and penalty arrears after service of notice. The section also permitted objections by the noticee, but if liability was not disproved, the amount became recoverable as arrears of land revenue under sub-section (6). The Court found that notice under section 17 had been served and the petitioners had not established that no such notice was issued. Once the amount became recoverable as arrears of land revenue, section 3 of the Revenue Recovery Act, 1890 authorised the Collector of the other district to recover it on the strength of the certificate, and the petitioners became defaulters within section 2(3). The Court also held that the petitioners could not raise a new factual case at the argument stage and that the statutory remedy under section 4 of the Revenue Recovery Act, 1890 was available but not pursued.

Conclusion: The recovery proceedings and demand notices were valid, and the challenge to them failed.

Ratio Decidendi: Amounts recoverable from a person under the special recovery machinery of the sales-tax law, once certified and transmitted under the Revenue Recovery Act, may be recovered as arrears of land revenue, and the noticee's remedy is to dispute liability before the proper authority or pursue the statutory protest-and-suit mechanism.

---