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Issues: (i) Whether, on a transfer of business, the transferee alone was liable for sales tax under section 17 of the Bengal Finance (Sales Tax) Act, 1941, and whether the transferor's liability had ceased. (ii) Whether the petitioner remained liable for the demand relating to the period during which he was a partner, despite notices having been issued to the transferee only.
Issue (i): Whether, on a transfer of business, the transferee alone was liable for sales tax under section 17 of the Bengal Finance (Sales Tax) Act, 1941, and whether the transferor's liability had ceased.
Analysis: Section 17 deems the transferee of a registered dealer's business to be registered for all purposes under the Act, including assessment and recovery, but the provision operates where the transferor has not already discharged the liability. The Court noted that the transferor's own statement and the dissolution arrangement contemplated responsibility for the relevant period, and the liability for that period had not ceased by reason of the transfer alone.
Conclusion: The transferee was liable under section 17, but the transferor's liability for the relevant period did not cease.
Issue (ii): Whether the petitioner remained liable for the demand relating to the period during which he was a partner, despite notices having been issued to the transferee only.
Analysis: The notices to the transferee were consistent with section 17, but they did not extinguish the petitioner's liability for the period during which he was a partner. The petitioner's own statement and the dissolution deed created joint liability for the relevant period, and the demand was confined to that period alone.
Conclusion: The petitioner remained liable for the demand relating to the period of his partnership, and the demand was upheld to that extent.
Final Conclusion: The reference was answered against the petitioner on the substantive liability question, and the sales tax demand for the partnership period was sustained.
Ratio Decidendi: Under section 17 of the Bengal Finance (Sales Tax) Act, 1941, a transferee may be liable for sales tax on transfer of business, but a transferor's own admitted joint liability for the relevant period remains enforceable and is not displaced merely because notices were issued to the transferee.
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