Transferee liability under sales tax law does not apply where nationalisation statute separately governs pre-vesting tax liabilities.

A nationalised undertaking was not an absolute transfer attracting transferee liability under section 17 of the Bengal Finance (Sales Tax) Act, 1941. That provision applies where a dealer transfers ownership of a business, but the Jute Companies (Nationalisation) Act, 1980 separately kept pre-appointed-day liabilities with the jute company and provided a distinct claims mechanism before the Commissioner of Payments. In that statutory setting, pre-vesting tax liabilities were governed by the nationalisation law, not by the sales tax transfer provision. The petitioner therefore could not be treated as a transferee for registration purposes, and the direction to apply on that footing was unsustainable.

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Issues: Whether the petitioner, whose undertaking vested in and was later acquired by the Corporation under the nationalisation law, could be treated as a transferee under section 17 of the Bengal Finance (Sales Tax) Act, 1941, so as to sustain the direction to apply for registration on that footing.

Analysis: Section 17 of the Bengal Finance (Sales Tax) Act, 1941 proceeds on an absolute transfer of the ownership of a business and is designed to fasten liability on a transferee where a dealer transfers his business. Under section 5(1) of the Jute Companies (Nationalisation) Act, 1980, liabilities for periods prior to the appointed day remained liabilities of the jute company and were not enforceable against the Central Government or the Corporation. Section 17 of that Act, read with the Second Schedule, created a separate machinery for claims, including revenue and taxes, before the Commissioner of Payments. In that statutory setting, pre-appointed-day tax liabilities were governed by the nationalisation Act itself and not by the transfer-based scheme of section 17 of the Sales Tax Act. The acquisition under nationalisation was therefore not a transfer attracting transferee liability under the sales tax law.

Conclusion: The petitioner could not be treated as a transferee under section 17 of the Bengal Finance (Sales Tax) Act, 1941, and the direction to apply for registration on that basis was unsustainable.

Final Conclusion: The impugned orders were quashed and the respondents were directed to deal with the registration application in accordance with law, with the nationalisation statute governing the liability position.

Ratio Decidendi: Where a nationalisation statute separately vests liabilities in the transferor company and provides its own claims mechanism for pre-vesting fiscal liabilities, the transferee-liability provision in a sales tax enactment does not apply to the nationalised undertaking.

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