Abatement of tax proceedings on death of sole proprietor: proceedings cannot continue against legal heirs; demand set aside

Abatement of proceedings follows the death of a sole proprietor because the taxing statute provides no mechanism to continue assessment or recovery against legal heirs; therefore service of a show cause notice on the deceased is legally untenable and proceedings lapse. The tribunal applied precedent from higher courts to conclude that assessment and recovery cannot be maintained against successors, rendering the original order void ab initio and the demand unsustainable; the impugned order was set aside and the appeal allowed.

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Issues: (i) Whether adjudication and recovery proceedings initiated against a sole proprietor who died during pendency of proceedings can be continued against the deceased or their legal heirs.

Analysis: The issue concerns whether, in the absence of specific machinery provisions within the taxing statute, assessment or recovery proceedings may be proceeded with against a deceased sole proprietor or their legal heirs. Jurisprudence establishes that an "assessee" under the relevant statute is the person chargeable with the tax and that notices under the statutory provisions are directed at such person. Where the sole proprietor dies during pendency of proceedings and the statute contains no express provision enabling continuation of assessment or recovery against the deceased or successors, the proceedings abate. Relevant authorities applied include the decision treating assessment proceedings against a deceased person as not sustainable and subsequent High Court and Tribunal decisions following that principle.

Conclusion: The adjudication and recovery proceedings against the deceased sole proprietor abated on her death and the order-in-original passed against the deceased is void ab initio; the demand is set aside and the appeal is allowed in favour of the assessee.

Ratio Decidendi: In the absence of a statutory machinery provision permitting continuation of assessment or recovery against a deceased assessee, proceedings abate on the death of the sole proprietor and cannot be continued against the legal heirs.

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