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of <h1>Court rules transferee not liable for outstanding tax under Rajasthan Sales Tax Act SS9(1)</h1> The Court ruled in favor of the petitioner, holding that the transferee was not liable for the outstanding tax amount under section 9(1) of the Rajasthan ... - Issues:Recovery of outstanding tax amount from a transferee under section 9(1) of the Rajasthan Sales Tax Act, 1954; Validity of attachment and sale of properties belonging to the transferee; Interpretation of provisions related to transfer to defraud revenue.Analysis:The writ petition was filed to challenge the notices, attachment-memo, and sale proclamation issued by the Commercial Tax Officer for the recovery of outstanding tax amount from the petitioner, who had purchased a lime kiln and adjoining buildings from a registered dealer. The petitioner contended that the provisions of section 9(1) of the Act were not applicable as only the properties were transferred, not the entire business. The non-petitioners argued that the entire business was transferred, making the petitioner liable for the unpaid tax amount. The Court analyzed the transfer deed and relevant provisions of the Act to determine the scope of liability under section 9(1).The Court noted that the transfer deed did not show a transfer of the entire business, including stock-in-trade, assets, and goodwill. As per section 9(1) of the Act, the transferee is liable only if the ownership of the entire business is transferred. The Court emphasized that the liability does not extend to partial transfers of business assets. Additionally, it was clarified that the provision of section 11AAA regarding transfers to defraud revenue did not apply in this case as the transfer was made for valuable consideration and without notice of pending proceedings.Regarding the objections raised by the petitioner and the decision-making process of the tax authorities, the Court observed discrepancies in the handling of objections and the lack of a formal finding regarding the petitioner's liability. Citing precedents, the Court emphasized the necessity of a clear finding on liability before taking action against a transferee for unpaid tax amounts. The Court concluded that since no such finding was made by the tax authorities, the recovery actions against the petitioner were not justified.Ultimately, the Court allowed the writ petition, quashing the notices and attachments while restraining the non-petitioners from recovering the outstanding amount from the petitioner. The judgment highlighted the importance of establishing liability under statutory provisions before enforcing recovery measures against a transferee.This detailed analysis of the judgment showcases the Court's thorough examination of the legal issues involved, including the interpretation of relevant provisions and the application of established legal principles in tax recovery matters.
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