Transferee liability under sales tax law arises only on transfer of the business itself, not a mere sale of machinery.

Section 19(4) of the Bombay Sales Tax Act fastens joint and several liability only when there is a transfer or disposal of the business in whole or in part, or a succession to the business or part of it. A mere sale of machinery does not create transferee liability where the business itself is not transferred. On the stated facts, the former concern had stopped, no stock, goodwill, tenancy rights or other business assets were transferred, and the new concern started independently after securing a separate tenancy and restoring the machinery to use. The revenue material did not prove transfer of the business or succession, so the purchasers were not liable for the predecessor's sales tax dues.

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Issues: Whether the sale of machinery, without transfer of the business as a going concern or any part of the business, attracted transferee liability under section 19(4) of the Bombay Sales Tax Act, 1959 for the transferor's pre-transfer sales tax dues.

Analysis: Section 19(4) fastens joint and several liability only where a dealer transfers or otherwise disposes of his business in whole or in part, or effects a change in ownership resulting in succession to the business or part thereof. The decisive inquiry is whether there was a transfer of the business itself, or of a part of the business as such, and not merely a sale of some assets. On the facts found, the transaction was confined to the machinery of the former concern. The business had stopped, stock and other assets were not transferred, goodwill was not transferred, tenancy rights were not transferred, and the new concern commenced its own business after arranging a separate tenancy and putting the machinery back into working condition. The material relied upon by the revenue did not establish transfer of the business or succession to it.

Conclusion: The petitioners were not transferees of the business or any part of it, and section 19(4) did not make them liable for the predecessor's sales tax dues. The recovery notice and assessment orders were without jurisdiction and liable to be quashed.

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