Dealer liability under sales tax law attaches to the company, not a shareholder; proceedings against the shareholder were quashed in part.

Where a business is carried on in the name of a registered company, the company is the dealer for purposes of the Bengal Finance Sales Tax Act, and a shareholder cannot be proceeded against personally merely because of participation in management. Proceedings under section 22(1)(a) were therefore quashed. As to the alleged want of sanction for proceedings under section 22(1)(g), the record was insufficient to determine whether the required sanction under section 22(2) had been obtained, and the Court declined to quash at that stage. The challenge succeeded only in part.

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Issues: (i) Whether proceedings under section 22(1)(a) of the Bengal Finance Sales Tax Act, 1941 could continue against a shareholder in respect of business carried on in the name of a company; (ii) Whether proceedings under section 22(1)(g) of the Bengal Finance Sales Tax Act, 1941 should be quashed at the present stage for alleged want of sanction.

Issue (i): Whether proceedings under section 22(1)(a) of the Bengal Finance Sales Tax Act, 1941 could continue against a shareholder in respect of business carried on in the name of a company.

Analysis: The expression "dealer" had to be read with the scheme of the Act, particularly sections 4, 7 and 21. Where the business was carried on in the name of a registered company, the company itself was the dealer. A shareholder, even if taking a leading part in the business, could not be treated as the dealer merely because the business was conducted in the company's name. Proceedings for contravention of section 7(1) had to be directed against the company, not against the shareholder personally.

Conclusion: The proceedings under section 22(1)(a) were liable to be quashed and were quashed in favour of the petitioner.

Issue (ii): Whether proceedings under section 22(1)(g) of the Bengal Finance Sales Tax Act, 1941 should be quashed at the present stage for alleged want of sanction.

Analysis: The record was insufficient to determine whether the requisite sanction under section 22(2) had been obtained for the offence alleged under section 21(1)(g). The question was not raised in the application on which the rule was issued, and on the materials then available the Court declined to quash the proceedings on that ground.

Conclusion: The request to quash the proceedings under section 22(1)(g) was rejected and the rule was discharged on that issue.

Final Conclusion: The challenge succeeded only in part, with the proceedings under section 22(1)(a) set aside but the challenge to the proceedings under section 22(1)(g) failing.

Ratio Decidendi: In proceedings under a sales tax statute, liability for carrying on business as a dealer attaches to the company that carries on the business, and not to a shareholder merely by reason of shareholding or participation in management.

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