The liability of a transferee under section 15(1) of the Mysore Sales Tax Act, 1957 is limited to the tax or penalty remaining unpaid at the time of transfer, and recovery under section 13(3) is not authorized for assessments in which the transferee was not a party.

( 1 ) A certain Kabadi who was carrying on business as a radio and cloth dealer at Gadag was a dealer under the Mysore Sales Tax Act, 1957. On 28th February, 1963, the whole of his business was purchased by Bhandage who is the petitioner in these four revision petitions. When he made the purchase, Kabadi's turnover for the period between 1st April, 1962, and 30th June, 1962, had been assessed to sales tax by an order of assessment made on 6th December, 1962. The turnover relating to the years 1959-60, 1960-61 and 1961-62 formed the subject-matter of subsequent assessment proceedings in which assessments were respectively made in the years 1963, 1964 and 1965. When the tax and penalty payable by Kabadi were not paid by the petitioner, an application was presented to the Judicial Magistrate, Gadag, under section 13 (3) of the Act for their recovery. The petitioner's objection to that recovery which rested on more than one ground was negatived, and these revision petitions are directed against the orders made by the magistrate in that way.

( 2 ) MR. Srinivasan advanced three arguments on behalf of the petitioner. The brat was that since the orders of assessment in respect of the years 1959-60, 1960-61 and 1961-62 were made after the transfer of the business to the petitioner, the tax and the penalty payable under those orders of assessment were not payable by the petitioner who is a transferee, and that the liability in respect of such tax and penalty does not flow out of section 15 (1) of the Act. The second submission was that no tax or penalty to which section 15 (1) refers, could be recovered from the transferee of the business through a Magistrate under section 15 (3 ). The third 'submission was that the provisions of section 15 (1) which resulted in an infraction of the fundamental right to acquire and hold property created by Article 19 of the Constitution was void.

( 3 ) ON the question whether section 15 (1) is an unconstitutional piece of legislation, we abstain from expressing any opinion in these revision petitions which could be disposed of on other grounds. And, before we state those grounds, it will be necessary to set out that sub-section which reads :

"15. Tax payable on transfer of business - (1) When the ownership of the business of a dealer liable to pay the tax or penalty is entirely transferred, the transferor and the transferee shall jointly and severally be liable to pay any tax or penalty payable in respect of such business and remaining unpaid at the time of transfer. "

( 4 ) NOW the assessment in respect of the four periods with which we are concerned was made only in proceedings to which Kabadi who was the dealer was a party, and in none of these proceedings was the petitioner a party. Similarly the imposition of penalty was only on Kabadi and not on the petitioner. The question is whether merely for the reason that the petitioner became the transferee of the whole of the business of Kabadi on 28th February, 1963, the tax and the penalty payable by the dealer under the relevant orders of assessment made in that regard became payable and could be recovered in a proceeding under section 13 (3 ).

( 5 ) NOW, section 19 (1) transmits in some measure the liability of a dealer to pay tax or penalty to a person who is the transferee of the entire business of the dealer, although the dealer also continues to be liable to pay the amount the from him. The liability comes into being only when there is a transfer of the whole of the business, and, in the cases before us, Mr. Srinivasan no longer disputes that there was such transfer to the petitioner. But it is important to observe that the tax or penalty which the transferee referred to in section 15 (1) is liable to pay is the tax or penalty remaining unpaid at the time of the transfer. It should therefore follow that the tax or penalty which the transferee could be called upon to pay is the tax or penalty which was payable by the transferor w