1963 (4) TMI 35 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of section 19 of the Orissa Sales Tax Act, 1947 regarding the liability of a transferee in case of business transfer.
2. Application of section 13-A of the Act for recovery of sales tax dues.

Analysis:

Issue 1: Interpretation of section 19 of the Orissa Sales Tax Act, 1947
The case involved the transfer of a business from one entity to another, where the transferee assumed the liability of unpaid sales tax at the time of transfer. The contention raised was whether the legal fiction under section 19 extended only to determining liability or also applied to the mode of tax recovery. The court referred to precedents and emphasized that the transferee, by virtue of the transfer, is treated as a registered dealer liable to pay the unpaid tax. The court rejected the argument that the legal fiction was limited to liability determination only and upheld that the transferee falls within the definition of a "dealer" under the Act, subject to its provisions. The court cited relevant Supreme Court judgments to support its interpretation.

Issue 2: Application of section 13-A for recovery of sales tax dues
The second contention raised was regarding the application of section 13-A for recovery of sales tax dues. The petitioner argued that as instalments were granted by the Certificate Officer, the Sales Tax Officer had no jurisdiction to direct attachment as only the monthly instalment amount was due. The court held that section 13-A confers wide powers on the Sales Tax Officer for recovery, irrespective of other proceedings. The court dismissed the argument that the instalment order should be the sole amount payable. It also noted that the department had not agreed to instalments, as claimed by the petitioner. The court referred to a previous decision that was set aside and upheld the Sales Tax Officer's authority to recover the dues as per section 13-A.

In conclusion, the court dismissed both contentions and upheld the Sales Tax Officer's actions in directing recovery under section 13-A. The application was dismissed with costs, and the judgment was delivered by NARASIMHAM R.L. C.J. and MISRA G.K. JJ.