Tax liability cannot be implied against a deceased dealer's heir; succession is not a voluntary transfer under the sales tax provision.

A taxing statute cannot fasten a deceased dealer's liability on a legal heir by implication; where the Act contains no express machinery for recovering a deceased person's tax dues from the estate or representative, the heir is not liable for the unassessed dues. Section 26(1) of the Bombay Sales Tax Act, 1953 was held to apply only to voluntary transfers inter vivos between living parties and not to devolution of business by succession on death. The successor was therefore not a transferee within that provision, and no liability could be imposed either as legal heir or as transferee.

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Issues: (i) Whether, in the absence of an express statutory provision, the legal heir of a deceased dealer could be made liable for tax dues arising from the deceased's business; and (ii) whether section 26(1) of the Bombay Sales Tax Act, 1953 applies to a devolution of business by succession so as to make the successor liable as a transferee.

Issue (i): Whether, in the absence of an express statutory provision, the legal heir of a deceased dealer could be made liable for tax dues arising from the deceased's business.

Analysis: The statutory definition of dealer did not include the legal representative of a deceased person, and the Act then in force contained no provision corresponding to the later liability provision introduced in the 1959 Act. In tax legislation, liability cannot be inferred by implication; where the Legislature intends to fasten liability on the estate or representative of a deceased person, it must create the machinery expressly. The earlier authorities applied this principle and held that, without such a provision, assessment or recovery could not proceed against the legal heir for the deceased's unassessed tax liability.

Conclusion: The legal heir could not be held liable as such for the deceased dealer's tax dues, and the finding was in favour of the assessee.

Issue (ii): Whether section 26(1) of the Bombay Sales Tax Act, 1953 applies to a devolution of business by succession so as to make the successor liable as a transferee.

Analysis: Section 26(1) fastens joint and several liability on the transferor and transferee and therefore contemplates a voluntary transfer between living parties. Its language and scheme do not accommodate a transfer caused by death or succession, because the transferor must be in existence for the provision to operate. The provision was therefore confined to voluntary transfers inter vivos and not to devolution by operation of law.

Conclusion: The successor was not a transferee within section 26(1), and no liability could be imposed under that provision; this issue was also in favour of the assessee.

Final Conclusion: The reference was answered against the taxing authority, and the respondent was held not liable for the father's tax liability either as legal heir or as transferee.

Ratio Decidendi: A taxing statute cannot impose liability by implication, and a provision imposing liability on a transferor and transferee is limited to voluntary transfers inter vivos unless the statute expressly extends it to succession or legal ation.

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