DEPUTY COMMERCIAL TAX OFFICER & ANR. vs SHA SUKHRAJ PEERAJEE

The Supreme Court held that Rule 21-A of the Sales Tax Rules was ultra vires the Madras General Sales Tax Act IX of 1939, specifically sections 19(1) and 19(2)(c), as it exceeded the rule-making power of the State Government. The Court clarified that prior to the amending Act 1 of 1959, there was no provision making the purchaser of a business liable for the seller's sales tax arrears. The judgment emphasized that the purchaser is only liable for their own turnover and not for the sales made by the seller, thus dismissing the appeal against the High Court's ruling.