Hatim Mahmood vs A.C.T.O.

Ramaswami, J.—In this case there has been transfer of a business in ball bearings from one Balakrishnan to the present petitioner, Hatim

Mahmood. The transfer was made on 20th March, 1955. In respect of the alleged amount due by way of sales-tax for 1951-52 and 1952-53

under alleged reassessment as per assessment orders dated 6th April, 1955 and 27th January, 1956, notice of demand had been issued on 27th

April, 1955 and 18th February, 1956, to this Hatim Mahmood. The demand had not been complied with by this Hatim Mahmood, and therefore,

distress warrant had been issued by the Magistrate.

The point for consideration is against whom this distress warrant should be issued. Rule 21-A of the Madras General Sales-tax Rules shows that

both the transferor and transferee will be liable. This must be so, because the Government cannot be done out of the sales-tax by each passing the

buck to the other.

In the present case for the reasons set out in the affidavit of Balakrishnan this distress warrant should be issued in the first instance to the

transferor and only when the amount cannot be realised from him, the transferee should be proceeded with. The Fifth Presidency Magistrate,

Egmore, Madras, will issue a distress warrant in the light of the observations made above.