Bona fide transferee protection under sales tax recovery law applies where the purchaser lacks notice of pending proceedings.

Section 33-A of the M. P. Sales Tax Act voids transfers made by a dealer during pending recovery proceedings if intended to defraud revenue, but its proviso protects a transfer for valuable consideration made without notice of those proceedings. The Court held that the expression "without notice of the proceedings" refers to the transferee, not merely the dealer, because the proviso is meant to save bona fide purchasers for value and would otherwise add little to the main rule. On that construction, a bona fide transferee without notice was protected and the attachment orders were quashed.

---

---

Issues: Whether, under section 33-A of the M. P. Sales Tax Act, the proviso protects a transferee who purchases property for valuable consideration without notice of the pendency of recovery proceedings against the dealer, and whether the expression "without notice of the proceedings" refers to the transferee or the transferor.

Analysis: Section 33-A makes a transfer by a dealer during pendency of proceedings void if made with intent to defraud the revenue, but the proviso saves a transfer made for valuable consideration and without notice of the pendency of those proceedings. The proviso was treated as an exception intended to protect a bona fide transferee for value. A construction that ties notice only to the dealer would make the proviso largely redundant, because a transfer made by a dealer ignorant of the proceedings would already lack the requisite intent to defraud. Reading the proviso in context, the protection is available where the transferee acquires the property bona fide for consideration without notice of the proceedings.

Conclusion: The expression "without notice of the proceedings" refers to the transferee, not merely the dealer, and a bona fide transferee for valuable consideration is protected by the proviso. The impugned attachment orders were quashed.

Ratio Decidendi: A proviso saving transfers made for valuable consideration and without notice of pending proceedings must be construed as protecting a bona fide transferee for value, unless the context clearly indicates otherwise.

---