Abatement on death of sole proprietor: proceedings cannot continue against a power of attorney holder or proprietary concern.

Proceedings against a deceased sole proprietor generally abate under Rule 22 of the CESTAT (Procedure) Rules, 1982 unless continuation is sought by the successor-in-interest or legal representative. A power of attorney holder does not incur independent liability merely by acting for the principal, and the agency terminates on the principal's death under Section 201 of the Indian Contract Act, 1872. The revenue cannot revive abated proceedings by treating the attorney holder as the beneficial owner or by proceeding against the proprietary concern on new factual assertions beyond the show cause notice or memorandum of appeal.

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Issues: Whether the appeal and the proceedings against the deceased sole proprietor of the respondent firm abated on his death, and whether the revenue could continue the proceedings by treating the power of attorney holder as the beneficial owner or by proceeding against the proprietary concern.

Analysis: Rule 22 of the CESTAT (Procedure) Rules, 1982 provides that proceedings abate on the death of a respondent unless continuance is sought by the successor-in-interest or legal representative. The power of attorney did not create any independent liability in the donee, who only acts in place of the principal within the authority granted. The agency relationship also terminates on the death of the principal under Section 201 of the Indian Contract Act, 1872. The demand was not adjudged and no surviving machinery existed in the present facts to revive the case against the deceased through the power of attorney holder. The revenue could not enlarge the scope of the show cause notice or the memorandum of appeal by new factual assertions at hearing, and the legal position on proceedings against a deceased person was supported by the cited judicial authorities.

Conclusion: The proceedings against the deceased respondent proprietary firm abated, and the appeal could not be continued against the power of attorney holder or otherwise.

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