Transferee liability for unpaid tax is confined to tax already determined before transfer under the statute.

Under the Bengal Motor Spirit Sales Taxation Act, 1941, assessment of a retail dealer's tax required determination after giving the dealer a reasonable opportunity to verify the return. The text states that, where the dealer died before completion of assessment, no provision authorised substitution of legal representatives to complete assessment for periods when the deceased was alive, and fiscal liability could not be extended by implication. It further explains that section 10(4) refers only to tax already quantified and remaining unpaid at the time of transfer, so a transferee's exposure is confined to unpaid tax lawfully determined before transfer.

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Issues: Whether, on the death of a retail dealer under the Bengal Motor Spirit Sales Taxation Act, 1941, the legal representatives or transferees of the business could be assessed for tax relating to periods when the deceased dealer was alive, and whether section 10(4) authorised recovery only of tax already determined and remaining unpaid at the time of transfer.

Analysis: The charging and assessment scheme of the Act required determination of tax due under section 7(1) after giving the retail dealer a reasonable opportunity of proving the correctness and completeness of the return. The deceased dealer alone had filed the relevant returns, and the statute contained no provision for substituting his legal representatives for the purpose of completing that assessment after his death. In a fiscal statute, no deficiency can be supplied by implication. The expression in section 10(4), namely, tax 'which remains unpaid at the time of the transfer', was held to be significant and to refer to tax already quantified under the Act during the transferor's lifetime. The transferee's liability under that provision was therefore confined to unpaid tax lawfully determined before the transfer.

Conclusion: The impugned notices were invalid insofar as they sought assessment for periods during which the deceased dealer was alive, and valid only for periods after his death. The appeals were accordingly allowed in part in favour of the appellants.

Ratio Decidendi: In a taxing statute, liability of a transferee under a provision making unpaid tax of the transferor recoverable arises only where the tax had already been assessed or otherwise legally determined as unpaid at the time of transfer; such liability cannot be extended by implication to assessments of a deceased dealer for periods when he was alive, absent an express statutory provision and compliance with the statutory hearing requirement.

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