Third-party tax recovery under section 39 cannot determine disputed civil liability; unauthorized notices and attachment were invalid.

Section 39 authorises recovery from a person who owes or holds money for the dealer, but it does not empower the Commissioner to decide, in a summary proceeding, a disputed civil liability between an alleged third-party debtor and the dealer. A contractual undertaking between the petitioner and the dealer, even if assumed, did not create a direct liability enforceable by the State. Applying strict construction of taxing statutes, the court noted that no express power existed to adjudicate third-party liability, so the recovery notices and the consequential attachment and proclamation under land revenue provisions were without jurisdiction and invalid.

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Issues: Whether the sales tax authorities could, under section 39, proceed against a third party and determine his liability for the dealer's arrears of sales tax, and whether the consequential attachment and sale proceedings were valid.

Analysis: Section 39 permits recovery from a person who owes money to, or holds money for, the dealer, but it does not confer power on the Commissioner to adjudicate, in a summary and informal proceeding, the disputed civil liability between the alleged debtor and the dealer. A contractual undertaking between the petitioner and the dealer, even if assumed, did not create a direct liability in favour of the State. In a taxing statute, ambiguity must be resolved strictly and in favour of the taxpayer; absent an express conferment of authority to decide third-party liability, the authorities could not enter upon that enquiry. The recovery notices and the steps taken under the land revenue provisions were only consequential to that unauthorized determination.

Conclusion: The proceedings against the petitioner were without jurisdiction and the notices, attachment and proclamation were invalid.

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