Transferee liability for agricultural tax arrears upheld where recovery from transferor failed and notices were timely.

Section 23 of the Agricultural Income-tax Act, 1950 permits recovery of agricultural tax arrears from a transferee where the transferor cannot be reached and the tax cannot be realised from the transferor. The Kerala HC accepted that the transferor could not be traced and upheld fastening liability on the transferee. It further held that the transferee could not reopen the transferor's assessment or question the demand notices on maintainability grounds, and the notices were within limitation. The revenue recovery notices were therefore valid and the transferee's challenge failed.

---

---

Issues: Whether, under section 23 of the Agricultural Income-tax Act, 1950, the transferee of agricultural property was liable to discharge the transferor's tax arrears when recovery from the transferor had failed, and whether the transferee could challenge the transferor's assessment or the demand notices on grounds of maintainability or limitation.

Analysis: Section 23 governs assessment and recovery in cases of transfer of rights in land and authorises recovery from the transferee where the tax cannot be realised from the transferor. The finding that the transferor could not be traced was accepted, and the liability was therefore fastened on the transferee. On that basis, the transferee could not reopen the validity or maintainability of the assessment made on the transferor. The prior revision proceedings had already been held to be not maintainable, and the notices had been issued within the statutory period.

Conclusion: The revenue recovery notices were held to be valid, and the challenge by the transferee was rejected.

---