TMI Blog1956 (6) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... er. The assessee admitted the correctness of the amount of assessment, but he denied his liability on the ground that as the business had been transferred by him the liability to pay tax with regard to the business done before the transfer was only upon the transferee and the transferor was absolved from his liability. The Tribunal accepted this contention and the taxing authority has come before us on this reference. Turning to the Act, section 5 imposes the liability upon the dealer whose gross turnover exceeds a certain amount during the relevant period and it makes the dealer liable to pay tax on his turnover. It is not disputed that under this section the assessee became liable to pay tax. Section 6 deals with the levy and rates of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (1) provides: "When the ownership of the business of a dealer liable to pay the tax under this Act is entirely transferred, any tax payable in respect of such business and remaining unpaid at the time of the transfer shall be pay- able by the transferee as if he were the dealer liable to pay such tax and the transferee shall also be liable to pay tax under this Act on the sales or supplies of goods effected by him with effect from the date of such transfer and shall within thirty days of the transfer apply for registration under section 8 or 8A, as the case may be, unless he already holds a certificate of registration." Under this section a three-fold statutory liability is imposed upon the transferee. The first, with which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slature, for greater caution, could have said in section 18 that not only the transferee is liable but the transferor continues to be liable. But the mere fact that the Legislature did not make the position clear cannot lead to the inference that a liability solemnly imposed in a taxing statute upon the taxpayer has been displaced or taken away by reason of the fact that a statutory liability to pay the same tax has been imposed upon a third party. It has been seriously suggested before us that even though an assessment had taken place before the date of transfer and even though a notice to pay had been served under section 12(4), as soon as the transferor transferred the whole of his business his liability would automatically cease and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to make sure of the tax makes somebody else also liable to pay the tax, but it would be fantastic to suggest that the Legislature relieved the person primarily liable to pay the tax from his liability and only made the transferee liable merely by reason of the fact that he accepted a transfer of the business. It is true, as we have pointed out, that section 18 does not in terms say that the tax shall be payable also by the transferor, but nor does the section say that the tax shall be payable only by the transferee. If the Legislature had used either one or the other expression, we would not have been called upon to consider this matter. But as the Legislature has failed to use those clear words, the question is what is the proper constr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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