Recovery against transferee property barred where sales tax arrears were not statutorily extended to immovable property purchasers.

Immovable property purchased by subsequent transferees could not be proceeded against under the Revenue Recovery Act for sales tax arrears of the transferor. Although the Madras General Sales Tax Act created a charge on the dealer's property and allowed tax recovery as arrears of land revenue, that liability did not extend to transferees of immovable property who were not transferees of the business and were not treated as defaulters under the statutory scheme. The Revenue Recovery Act's attachment and sale machinery, including its transferee provisions, applied only where the statute made the transferee liable as a defaulter. On these facts, the recovery proceedings against the petitioners' property were not justified.

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Issues: Whether property transferred by a dealer after assessment could be proceeded against under the Revenue Recovery Act for recovery of sales tax arrears due from the transferor.

Analysis: The arrears related to sales tax due from the transferor under the Madras General Sales Tax Act. Although that Act created a charge on the property of the dealer and provided for recovery of tax as arrears of land revenue, the petitioners were only subsequent transferees of immovable property and not transferees of the business. The Revenue Recovery Act authorises attachment and sale of the defaulter's land, and its extended provisions concerning a transferee apply only where the statute makes the transferee liable as a defaulter. The statutory scheme governing sales tax did not treat a transferee of the dealer's immovable property as a defaulter for the transferor's sales tax arrears. The provisions applicable to land revenue and the certificate procedure under the Revenue Recovery Act did not justify proceeding against the petitioners' property on these facts.

Conclusion: The property of the petitioners could not be proceeded against under the Revenue Recovery Act for recovery of the sales tax arrears due from the transferor, and the writ petition succeeded.

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