Sales tax arrears recovery upheld against a connected transferee or partner, with discretionary relief refused on the facts.

Recovery of sales tax arrears was upheld where the petitioner's connection with the defaulting concern was not effectively denied and the later business was carried on in the same premises under the same lease. On those facts, liability could be fastened either because he was treated as a partner of the defaulting firm or because he was a transferee of the business. The petitioner's undertaking to repay any unpaid arrears also weighed against discretionary relief, and the challenge to the distraint and recovery proceedings failed.

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Issues: Whether the petitioner could resist recovery of sales tax arrears of another concern on the plea that he was not connected with that concern, and whether recovery could be sustained against him as a partner or transferee of the business.

Analysis: The pleadings showed that the petitioner's connection with the earlier concern was not satisfactorily denied, and the business of the later concern was carried on in the same premises under the same lease. On those facts, the liability for arrears could be fastened either on the footing that the petitioner was one of the partners of the defaulting firm or on the footing that he was a transferee of the business. The Court also took note of the petitioner's undertaking to repay the arrears if they remained unpaid and treated that conduct as a factor against granting discretionary relief.

Conclusion: Recovery of the arrears from the petitioner was held to be lawful and the challenge to the distraint and recovery proceedings failed.

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