TaxTMI 
TaxTMI 
1967 (4) TMI 173
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....as defined in the Madras General Sales Tax Act, 1939 (Madras Act No. 9 of 1939), hereinafter called the "Act", can be made liable for arrears of sales tax due from the dealer in respect of transactions of sale which took place before the transfer of the business under rule 21-A of the Rules framed in exercise of the powers conferred on the State Government by section 19 of the Act. The respondent purchased, by a registered instrument dated October 5, 1966, the business carried on by one Purushottam Raju under the name, All India Trading Company. Purushottam Raju was the sole proprietor of the business and had been assessed to sales tax in respect of his turnover for the years 1948-49 and 1949-50. The assessee paid some amounts towards sa....
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....ship of the business of a dealer liable to pay the tax under the Act is entirely transferred, any tax payable in respect of such business and remaining unpaid at the time of the transfer shall be recoverable from the transferor or the transferee as if they were the dealers liable to pay such tax, provided that the recovery from the trans- feree of the arrears of taxes due prior to the date of the transfer shall be only to the extent of the value of the business he obtained by transfer. The transferee shall also be liable to pay tax under the Act on the sales of goods effected by him with effect from the date of such transfer and shall within thirty days of the transfer apply for registration or licence, as the case may be, unless he already....
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....in respect of such sales remains therefore the turnover of the transferor and not of the transferee. By the amending Act of 1959 (Act 1 of 1959) an express provision was inserted by which the transferee of the business was made liable for the arrears of sales tax due from the transferor. But there is no such provision in the Act for the period with which we are concerned in the present case. The question is whether the State Government has authority under its rule-making power under section 19 of the Act to create a legal fiction by which the transferee of the business is constituted as the dealer liable to pay the tax in respect of the turnover of the transferor. On behalf of the appel- lants Mr. Rama Reddy suggested that the State Governm....
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....iability is definitely created by sections 3 and 4 of the Income-tax Act which are the charging sections and the assessment order under section 23 only quantifies the liability which has already been definitely and finally created by the charging sections and the provision in regard to assessment relates only to the machinery of taxation. In our opinion, the principle of these decisions applies to the interpretation of the Act in the present case. We consider that, in the context and background of other sections of the Act, the word "assessment" used in section 19(2)(c) does not include the power of recovering tax assessed from a person other than the assessee. It follows therefore that rule 21-A is beyond the rule-making power of the St....
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....d in the notice of assessment, not being less than fifteen days from the date of service of the notice. In default of such payment, the whole of the amount then remaining due may be recovered as if it were an arrear of land revenue." This section was amended by section 8 of the Madras General Sales Tax (Third Amendment) Act, 1956, which reads as follows: "Substitution of new section for section 10 in Madras Act 9 of 1939.- For section 10 of the principal Act, the following section shall be substituted, namely: '10. Payment and recovery of tax.-(1) The tax assessed under this Act shall be paid in such manner and in such instalments, if any, and within such time, as may be specified in the notice of assessment, not being less than fifte....