Transferee liability for pre-transfer sales tax dues applies when a registered dealer's business is entirely transferred.

Section 17 of the Bihar Sales Tax Act, 1944 fastens liability on a transferee where the ownership of a registered dealer's business is entirely transferred, making unpaid tax recoverable from the transferee as if he were the registered dealer. The Patna business had a separate registration and was transferred first to a 1946 partnership and then to the petitioner-firm; the later assessment merely quantified a pre-transfer liability and did not change its character. The note also states that taxation periods are distinct, so an earlier decision did not operate as res judicata for a different assessment period. Recovery against the transferee for the Patna business dues was therefore treated as valid.

---

---

Issues: Whether the sales tax arrears relating to the Patna business of the erstwhile Hindu undivided family could be recovered from the petitioner as transferee of that business under Section 17 of the Bihar Sales Tax Act, 1944.

Analysis: Section 17 fastens liability on the transferee where the ownership of the business of a registered dealer is entirely transferred, and unpaid tax in respect of that business becomes recoverable from the transferee as if he were the registered dealer. On the materials in the writ petition, the Patna business had a separate registration and was specifically transferred first to the partnership formed in 1946 and thereafter to the petitioner-firm. The revised assessment, though made later, related to the same pre-transfer period, and the later quantification did not alter the character of the liability. The Court also held that the assessment period is distinct in taxation matters and the earlier decision could not operate as res judicata for a different period. The petitioner failed to show that the dues related to both the Patna and Dinapore businesses jointly.

Conclusion: The petitioner was liable as transferee for the sales tax dues relating to the Patna business, and the recovery proceedings were valid.

Final Conclusion: The writ petition failed on the merits and the challenge to recovery of the tax dues was rejected.

Ratio Decidendi: Where the ownership of a registered dealer's business is entirely transferred, unpaid sales tax relating to that business remains recoverable from the transferee even if the assessment is completed after the transfer and even if subsequent transfers have occurred.

---