AI Drafter 
TaxTMI 
TaxTMI 
1964 (9) TMI 40
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....under section 3(1) of the Revenue Recovery Act (No. 1 of 1890). After the receipt of this certificate, the Naib Tehsildar (Sales Tax), Delhi, respondent No. 2, issued a notice to the petitioner-firm for appearance before him on 17th May, 1957. As a result, Sher Singh, petitioner No. 2, who is the managing partner of petitioner No. 1, appeared before the said officer and was informed about the recovery certificate that had been received from the Collector of Bombay. Thereafter, petitioner No. 2 went to Bombay and appeared before the Collector and made a statement on 25th May, 1957, to the effect that he had to pay Rs. 16,800 to the Bombay firm. He, however, stated that out of this decretal amount, he had made certain payments to the Bombay firm and was willing to pay the balance of Rs. 7,515-5-6 to the Government on behalf of their creditor-firm in suitable instalments at Delhi. On 13th June, 1957, the petitioner made an application to respondent No. 4 that he had approached the Collector of Bombay and the proceedings of recovery be, therefore, stayed. The said proceedings were, consequently, stayed. Thereafter, fresh notice of demand was issued by respondent No. 2 to the petitioner....
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....received by the petitioners asking them to pay the sum of Rs. 13,872.75 nP. on 12th November, 1958. On this date, the petitioners filed Civil Miscellaneous Petition No. 1618-D of 1958 in this Court, praying that the present writ petition be admitted and the recovery proceedings be stopped pending its disposal. On 13th November, 1958, the writ was admitted and recovery of the amount in dispute was stayed. Learned counsel for the petitioners submitted that the petitionerfirm was not an assessee within the meaning of the Bombay Sales Tax Act and therefore no recovery of sales tax or penalty could be made from them and the demand in dispute could not be enforced against them. The petitioners did not owe any money to the Government and, consequently, the provisions of the Revenue Recovery Act could not be made use of in the present case. It was also submitted that the respondents could not demand money from third parties in execution of a claim against an assessee. In any case, if the amount in dispute could be recovered from the petitioner-firm, then the proper forum for the realisation of the same was the executing court. The demand, however, could not be enforced under the provisi....
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....er this section shall be deemed to have made the payment under the authority of the dealer and the receipt of the Collector shall constitute a good and sufficient discharge of the liability of such person to the extent of the amount referred to in the receipt. (4) Any person discharging any liability to the dealer after receipt of the notice referred to in this section shall be personally liable to the Collector to the extent of the liability discharged or to the extent of the liability of the dealer for tax and penalties, whichever is less. (5) Where a person to whom a notice under this section is sent proves to the satisfaction of the Collector that the sum demanded or any part thereof is not due to the dealer or that he does not hold any money for or on account of the dealer, then, nothing contained in this section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, to the Collector. (6) Any amount of money which a person is required to pay to the Collector or for which he is personally liable to the Collector under this section shall, if it remains unpaid, be recoverable as an arrear of land revenue". A plain reading of th....
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....trict other than that in which the arrear accrued or the sum is payable, the Collector may send to the Collector of that other district a certificate in the form as nearly as may be of the Schedule stating- (a) the name of the defaulter and such other particulars as may be necessary, for his identification, and (b) the amount payable by him and the account on which it is due. (2) The certificate shall be signed by the Collector making it or by any officer to whom such Collector may, by order in writing, delegate this duty, and, save as otherwise provided by this Act, shall be conclusive proof of the matters therein stated. (3) The Collector of the other district shall, on receiving the certificate, proceed to recover the amount stated therein as if it were an arrear of land revenue which had accrued in his own district." The amount in dispute was recoverable as arrears of land revenue from the petitioner-firm and since this firm had failed to pay the same, they had become a "defaulter" within the meaning of section 2(3) of the Revenue Recovery Act. It says: "'defaulter' means a person from whom an arrear of land revenue or a sum recoverable as an arrear of lan....