Special mode of Recovery
(1) Notwithstanding anything contained in Section 43 or any law or contract to the contrary, the prescribed authority may at any time or from time to time, by notice in writing, (a copy of which shall be forwarded to the dealer at his last known address) direct-
(a) Any person from whom any money is due or may become due to a dealer who has failed to comply with a notice of demand served under Section 43, or
(b) Any person who holds or may subsequently hold any money for, or on account of such dealer, to pay into the Government Treasury in the manner specified in the notice, either forthwith or upon the money becoming due or being held, or at or within the time specified in the notice (not being before money becomes due or is held) so much of the money as is sufficient to pay the amount of tax due from the dealer, together with penalty, as the case may be, under this Act, or part or the whole of the money when it is equal to or less than that amount.
(2) The prescribed authority issuing the notice under sub-section (1) may at any time or from time to time, amend or revoke any such notice or extend the time for making such payment in pursuance of the notice.
(3) Any person making any payment in compliance with a notice issued under sub-section (1) shall be deemed to have made the payment under the authority of the dealer and the receipt from the Government Treasury shall construe a good and sufficient discharge of the liability of such person to the dealer to the extent of the amount specified in the receipt.
(4) Any person discharging any liability to the dealer after service on him the notice issued under sub-section (1) shall, if the liability is discharged in any manner other than that required under the said notice, be personally liable to the State Government to the extent of the liability discharged or to the extent of the liability of the dealer for tax or penalty, or both, whichever is less.
(5) Where a person on whom a notice is served under sub-section (1) proves to the satisfaction of the prescribed authority that the money demanded or any part thereof were not due to the dealer, or that he did not hold any money for or on account of the dealer, at the time the notice was served on him, nor is the money demanded or any part thereof is likely to become due to the dealer or be held for or on account of the dealer, then such person shall not be liable to pay into Govt. treasury any such money or part thereof.
(6) Any amount of money which a person is required to pay under sub-section (1) or for which he is personally liable under sub-section (4) shall, if it remains unpaid, be recoverable in the same manner as provided under sub-section (7) of Section 43.
(7) No action shall be taken under this Section in respect of any amount of tax, interest and penalty, if any, the date of payment of which has been extended or the realization of which has been stayed, under this Act during the period of such extension or stay.
Provided that nothing in this Section shall operate to affect any action taken or prevent any action that may be or is being taken under Section 43 for recovery from the dealer the amount due from him.