Recovery notice under sales tax law cannot attach third-party dues unless the recipient is the actual tax defaulter.

Section 17 of the Andhra Pradesh General Sales Tax Act, 1957 permits recovery only from persons who owe money to the dealer or hold money on the dealer's account. It cannot be used to require a third party to withhold or pay sums due to a person who is not the sales tax defaulter merely because another person connected with that concern may have tax liability. On the stated facts, the petitioner had receivables from the second respondent and no sales tax arrears were shown against it, so the recovery notice travelled beyond the provision and was quashed.

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Issues: Whether a notice issued under section 17 of the Andhra Pradesh General Sales Tax Act, 1957 could validly require a third party to withhold and pay money due to the writ petitioner when the writ petitioner was not the sales tax defaulter.

Analysis: Section 17 authorises recovery from persons from whom money is due to the dealer, or who hold money for or on account of the dealer, but the statutory power cannot be used against a person who is not the assessee or defaulter merely because another person, said to be a partner/proprietor of a different concern, may have tax liability. The writ petitioner was shown to have money receivable from the second respondent, and there was no arrear of sales tax due from the writ petitioner. Since the impugned direction proceeded on the footing that the petitioner was itself liable, the notice travelled beyond the scope of the provision.

Conclusion: The notice under section 17 was invalid and was quashed. The writ petition was allowed in favour of the assessee.

Ratio Decidendi: A statutory recovery notice cannot attach monies payable to a person who is not the tax defaulter, unless the person squarely falls within the class of persons against whom the recovery provision is expressly directed.

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