Deeming provision under sales tax law extends assessment liability to a successor carrying on the same business.

The Punjab General Sales Tax Act, 1948 was construed to permit assessment of a successor partnership where the original dealer died before assessment began, because section 17 contains an express deeming provision treating the transferee as registered for the Act's purposes if the same business continues. The court treated succession by operation of law as within the statutory language and distinguished the position from the Income-tax Act, where no equivalent deeming provision was relied upon. On that construction, succession to the business did not defeat assessment, and the transferee carrying on the business fell within the tax liability scheme.

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Issues: Whether a dealer who dies before assessment proceedings are initiated can still be assessed under the Punjab General Sales Tax Act, 1948, and whether a successor partnership carrying on the same business can be assessed as transferee under section 17 of that Act.

Analysis: The questions turned on the scope of sections 16 and 17 of the Punjab General Sales Tax Act, 1948. The Court noted the earlier view that, in the absence of an express provision, no assessment could be made against an entity which had ceased to exist before assessment. It then considered the amended section 17, which uses broad language and creates a legal fiction by deeming the transferee to be and to have always been registered for the purposes of the Act, so long as the transferee carries on the same business. The Court further relied on the principle that absolute transfer by operation of law, including succession, falls within the expression used in the provision. The statutory scheme was treated as distinct from the Income-tax Act because the Act itself contained the necessary deeming provision for transferee liability.

Conclusion: The questions were answered in favour of the Revenue and against the petitioners. The successor business was liable to be assessed as transferee under section 17.

Final Conclusion: The reference was disposed of by holding that succession to the business did not prevent assessment and that the transferee carrying on the business could be brought within the tax liability scheme of the Act.

Ratio Decidendi: Where the sales tax statute contains an express deeming provision covering transfer of ownership of a registered business, transferee liability extends to succession by operation of law if the transferee continues the business.

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