Successor liability under sales tax law requires a transfer by the tax-liable dealer; a fresh lease after surrender does not suffice.

Successor liability under section 19(4) of the Bombay Sales Tax Act, 1959 arises only where the tax-liable dealer transfers, disposes of, or changes ownership of the business and another person succeeds in consequence of that act. On the stated facts, the earlier lessee had surrendered its leasehold rights and possession to the original owner, leaving no continuing interest in the factory, trade marks, or quota rights; the petitioner later acquired rights under a fresh lease after a complete break in business. Mere continuation of similar business at the same premises did not satisfy the statutory requirement, so the demand for the predecessor's tax dues could not be enforced against the petitioner.

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Issues: Whether the petitioner-firm could be fastened with liability for the tax dues of the earlier dealer as a successor under section 19(4) of the Bombay Sales Tax Act, 1959, and whether the impugned order and demand notice were liable to be quashed in writ jurisdiction.

Analysis: Section 19(4) fastens joint and several liability on the predecessor-dealer and the successor only when two conditions coexist: there must be a transfer, disposal, or change in ownership of the business by the dealer liable to pay tax, and the other person must succeed in consequence of that act. On the facts found, the earlier lessee had surrendered its leasehold rights and possession to the original owner, leaving no interest in the factory, trade marks, or quota rights. The petitioner obtained rights only under a fresh lease executed by the original owner after a complete hiatus in business. The mere continuation of similar business at the same premises did not satisfy the statutory requirement of succession in consequence of a transfer by the tax-liable dealer. The authority therefore acted on a misconception of law, and the order disclosed a patent error of law and lack of jurisdiction.

Conclusion: The petitioner-firm was not a successor within section 19(4) of the Bombay Sales Tax Act, 1959, and the demand for the predecessor's tax dues could not be enforced against it; the challenge succeeded.

Ratio Decidendi: Successor liability under section 19(4) arises only when the predecessor-dealer itself transfers, disposes of, or changes the ownership of the business and the transferee succeeds in consequence thereof; a fresh lease from the original owner after surrender of all rights does not attract the provision.

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