Recovery from third-party funds requires prior satisfaction that money is due to the dealer, not merely linked indirectly.

Section 17 of the Andhra Pradesh General Sales Tax Act authorises recovery from a person only where money is actually due, or may become due, from that person to the dealer. The tax authority must first record satisfaction that the noticee owes such money to the defaulter before issuing a recovery notice. Where the amount was in fact payable to a third party and no finding linked the noticee to the dealer's debt, the attempted attachment of third-party funds was unsustainable. The notice was quashed, the amount was directed to be refunded, and recovery was left open only against the defaulting dealer in accordance with law.

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Issues: Whether a notice under section 17 of the Andhra Pradesh General Sales Tax Act, 1957 could be issued to recover the dealer's arrears from amounts allegedly payable to the writ petitioner by the second respondent, where the liability actually pertained to a third party.

Analysis: Section 17 permits recovery only from a person from whom money is due or may become due to the dealer. Before invoking the provision, the tax authority must record satisfaction that money is in fact due to the defaulter from the noticee. In the present case, no such finding existed. The amount was due to a third party, and the only link with the petitioner was that the third party was associated with the petitioner's firm. The Court held that the amount payable to an individual partner could not be ascertained in the manner attempted by the authorities, and the impugned notice was therefore unsustainable.

Conclusion: The notice issued under section 17 was invalid and was quashed; the writ petition was allowed, with a direction to refund the amount and liberty to recover the dues from the defaulting dealer in accordance with law.

Ratio Decidendi: Recovery under section 17 can be made only when the authority first ascertains that money is due or likely to become due from the noticee to the dealer; in the absence of such satisfaction, the provision cannot be used to attach or recover third-party amounts.

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