2017 (12) TMI 721 - AT - Service Tax

Appeal Granted: Show Cause Notice on Deceased Proprietor's Heir Void

The Appellate Tribunal CESTAT Chennai allowed the appeal, setting aside the show cause notice issued on the legal heir of a deceased proprietor for ... SCN on legal heir of proprietor after the death of proprietor - Whether the SCN can be validly issued on the legal heir of the proprietor for duty allegedly short paid on the ground that his son legal heir is carrying the same business after the death of proprietor under the same name and style? Held that: - the proprietor Birendra Singh, with respect to whom SCN was issued after his death, purportedly on the legal heir Shri Jasjit Singh is ab-initio avoid - it is of no consequence or help to the revenue that the legal heir Shri Jasjit Singh have also taken registration under the same name and style and is carrying on similar business. The said proprietorship concern of Shri Jasjit Singh is totally different from the earlier proprietorship concern of his late father Shri Birendra Singh. The Revenue have erred in issuing SCN on him after the death of late Birendra Singh - The Adjudicating authority is directed to refund the amount of ₹ 38,24,602/- collected from Shri Jasjit Singh with interest - appeal allowed - decided in favor of appellant. Issues:Validity of show cause notice on legal heir for duty allegedly short paid after the death of the proprietor.Analysis:The appeal before the Appellate Tribunal CESTAT Chennai revolved around the issue of whether a show cause notice could be validly issued on the legal heir of a deceased proprietor for duty allegedly short paid after the proprietor's death. The case involved the proprietorship of M/s Premier Security Services, where the proprietor, Shri Birendra Singh, passed away, and his son, Jasjit Singh, sought to re-register the business under his name. The Department issued a show cause notice to Jasjit Singh, demanding payment for allegedly short paid service tax during the period when Birendra Singh was the proprietor. The legal heir, Jasjit Singh, deposited the demanded amount but contested the legality of the notice.The Tribunal considered the legal precedent set by the Hon'ble Supreme Court in the case of M/s Shabina Abraham, where it was established that assessment proceedings against a deceased person's legal heirs are impermissible in the absence of specific provisions. The Tribunal noted that the show cause notice issued on Jasjit Singh after his father's death was void ab-initio, following the principles laid down in the aforementioned case. Despite Jasjit Singh re-registering the business under the same name and style, the Tribunal emphasized that the new proprietorship was distinct from the earlier one, and the revenue erred in issuing the notice to him. Consequently, the Tribunal held that the amount collected from Jasjit Singh was against the law and directed the Adjudicating authority to refund the sum with interest.In conclusion, the Appellate Tribunal CESTAT Chennai allowed the appeal, setting aside the impugned order. The Tribunal directed the Adjudicating authority to refund the amount collected from Jasjit Singh within 60 days from the date of receipt of the order. The judgment highlighted the importance of legal provisions and precedents in determining the validity of show cause notices on legal heirs for duties allegedly short paid after the death of a proprietor.