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TMI Blog1968 (2) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... nt could not be held as a transferee within the meaning of section 26(1) of the Bombay Sales Tax Act, 1953, and as such not liable to pay tax in respect of the business conducted by his father?" The facts necessary for the purpose of this reference are that the respondent's father used to carry on business in old bailing hoops, bardana, etc., till his death on the 6th of February, 1957. After his death, the respondent succeeded to the business, and carried on the same in his own name. The respondent has been sought to be assessed for the period 1st April, 1954, to 31st March, 1957, which would be almost entirely a period prior to the death of his father. The Sales Tax Officer assessed the respondent on the turnover of his father's busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to the extent specified therein. It is, therefore, clear that there is no statutory provision under which the respondent can be made liable in respect of the tax dues of his father, and unless there is a specific statutory provision which makes him liable, no person would be liable to pay tax to the State. Turning to the authorities on the point, the first is a case under the Income-tax Act, namely, the case of Ellis C. Reid v. Commissioner of Income-tax, Bombay[1930] 5 I.T.C, 100., in which the facts were that a person served with a notice under section 22(2) of the Income-tax Act, 1922, failed to make a return, and died after the expiration of the period specified in that notice. It was held that no assessment could he made on hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case, it was in order to get over the difficulty caused by the decision in Ellis Reid's case' that section 24-B was enacted in the Income-tax Act of 1922. Though this is a very old decision, in our opinion, it represents correctly the law on the point, and we are in respectful agreement with the same. It is no doubt a decision on the Income-tax Act, but it is equally applicable to the construction of the Bombay Sales Tax Act, 1953, in which also there is no specific provision which would make the legal representative of a deceased person liable to tax incurred by the deceased during his lifetime in respect of which the deceased had not yet been assessed. There is a decision of this Court on the Bombay Sales Tax Act, 1953, itself, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on referred to us must, therefore, be answered against the applicantCommissioner. That brings us to the second question which has been referred to us, namely, whether the respondent could be held liable as a transferee within the meaning of section 26(1) of the Bombay Sales Tax Act, 1953. Section 26 provides that when the ownership of the business of a dealer liable to pay tax is entirely transferred, the transferor and the transferee would jointly and severally be liable to pay any tax, including penalty, if any, payable in respect of such business, and the transferee would also be liable to pay tax on sales or purchases of goods effected by him after the date of such transfer. It was sought to be contended by Mr. Rege on behalf of the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid section, It is, therefore, quite clear that, both on principle as well as on authority, section 26 of the Bombay Sales Tax Act, 1953, must be held to be applicable only to cases of voluntary transfers inter vivos. In the result, we answer the questions referred to us as follows: Question No. (1): The Tribunal was justified in law in holding that the respondent could not be held liable to pay tax as a legal heir in respect of the business conducted by his father. Question No. (2): The Tribunal was justified in holding that the respondent could not be held to be a transferee within the meaning of section 26(1) of the Bombay Sales Tax Act, 1953, and was not liable to pay tax in respect of the business conducted by his father. The Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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