Section 34 U.P. Trade Tax Act applies only to transfers made during pending proceedings to defraud tax dues.

Section 34 of the U.P. Trade Tax Act applies only where, during pending proceedings under the Act, a liable person creates a charge on or transfers immovable property with intent to defraud tax or other dues. A transfer made for consideration before reassessment proceedings were initiated, and before any recovery certificate was issued, did not satisfy that statutory condition. The purchaser was also supported by the proviso protecting a transferee acting in good faith and for consideration. Accordingly, recovery could not be enforced against the purchaser and the endorsement of recovery was held invalid.

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Issues: Whether Section 34 of the U.P. Trade Tax Act could be invoked to proceed against the purchaser in respect of a transfer made before any proceedings under the Act were pending, and whether the purchaser was protected as a transferee in good faith and for consideration.

Analysis: Section 34 applies only where, during the pendency of proceedings under the Act, a person liable to pay tax or dues creates a charge on or transfers immovable property with the intention of defrauding tax or other dues. The transfer in question was made for consideration before reassessment proceedings were initiated and before the recovery certificate was issued. Since no proceedings under the Act were pending at the time of transfer, the statutory condition for invoking Section 34 was absent. The proviso protecting a transferee in good faith and for consideration also supported the purchaser's position.

Conclusion: Section 34 could not be applied against the purchaser, and the endorsement of recovery against it was invalid. The challenge by the Revenue failed.

Ratio Decidendi: Section 34 of the U.P. Trade Tax Act can be invoked only when the transfer of immovable property is made during the pendency of proceedings under the Act and with an intention to defraud tax or other dues; a pre-proceeding transfer for consideration cannot be fastened with the transferor's liability.

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