Bachhraj Baid And Anr. vs Commercial Tax Officer And Ors. on 4 May, 1984
38. The transferee from a dealer of his business under Section 17 of the said Bengal Act becomes liable for arrears of sales tax due from such transferor and in cases where a person steps into the shoes of another or body of persons incharge of the undertaking, he makes himself responsible for each and every prior conduct of the transferor and furthermore, he has also the responsibility for any evasion of tax, if such an event has occurred in course of dealings of the transferor. A "transfer" as observed in the case of Madras Type Foundry v. Joint Commercial Tax Officer, Harbour Division-III, Madras [1972] 30 STC 143 cannot be limited to only voluntary transfer, but also includes involuntary transfer. Whenever a person, for any reason whatsoever, secures a transfer of business as is popularly known and understood, he as such transferee, would be known as a "dealer". Thus, it is apparent that Section 17 creates a liability on the transferee for the dues of the transferor, for the period prior to the date of transfer and under the said section, what is essential and utmost is, that there must be either a transfer or any other disposition of the business by the transferor, who must be a registered dealer, and such transfer or other disposition may be either in whole or in part. One thing is also certain that both the transferor and the transferee are jointly and severally liable to pay the tax, including penalty, if any, due from the transferor in respect of the period upto the time of such transfer, disposition or change. It is also thus clear that firstly, either the whole or part of the business as such, must be transferred, and secondly, if there is any change in the ownership, the previous owner must be succeed in the business or part thereof by the transferee. Such tests, without any doubt would apply appropriately in this case.