https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=770318 https://www.taxtmi.com/caselaws?id=770318 Penalty imposed on a deceased assessee survives after his death - fiscal enactment where the Statute must contain a specific and enabling provision to assess and recover tax/duty - recovery of penalty from the legal representatives of the deceased assessee - HELD THAT:- Section 142 provides for the recovery of sums due to the Government by a person. The term 'person' is not defined under the Act. However, and on an application of first principles, since an assessment of duty and levy of penalty can be with respect to a 'person' alone, the recovery contemplated under Section 142 is also expected to be from the same person and no other unless the concerned enactment provides for the continuance of the proceedings for assessment/recovery in the hands of any other person. Even for recovery to be continued/taken, the concerned Department must specifically be enabled by way of a mechanism. The Supreme Court in the Judgement in Shabina Abraham and others V Collector and Central Excise and Others [2015 (7) TMI 1036 - SUPREME COURT] was concerned with the recovery of arrears of Central Excise in the hands of the appellant, who was the legal representative of an assessee who had died - The argument of the revenue in that case, similar to that advanced before us, was that the Central Excise and Salt Act provided for recovery of amounts due to the Department from an assessee by various methods including attachment and sale of excisable goods belonging to the assessee. The Department relied on the provisions of Section 11 contending that that provision would enable the revenue to continue with assessment proceedings and, should such proceedings be concluded adverse to the assessee represented by the legal representative, then the demand as raised, could be recovered from the legal representatives of the deceased assessee. In the present case, the proceedings have been concluded in the hands of the assessee. To that extent the facts are a little different. However, the difference is no so much, so as to make a difference to the legal position as there is no provision in the Customs Act for continuing proceedings even for recovery, in the hands of the legal heirs. To that extent, the ratio of the judgment supra, that the concerned enactment must contain suitable machinery to enable certain actions to be taken, would be equally applicable in this case as well. The scheme of the Act thus contemplates recovery only as set out under Section 142 or Section 142A, read with the Rules. Pre-2011, the Department could embark on recovery in the manner as set out under the Rules, in the case of those Assessee's where Certificates had been drawn up and the procedure as contemplated under the Rules. Post 2011, the demands raised after the date of insertion of Section 142A will be a charge on the property of an assessee. However, Sections 142, 142A and the Rules are silent as to the impact of the recovery provisions in the case of demise of an assessee, and Legislature has consciously not provided for such a situation - The assessments in the present case have been framed as early as on 24.10.2002 when there was no enabling provision under the Customs Act stipulating that the demands under those orders could be enforced as a first charge. In such circumstances, and on the facts of the present case, Section 142A of the Act also cannot come to the aid of the Department. Conclusion - The appeals abate. In the absence of a mechanism under the Act prior to 2011 for enforcement of the demand of duty, penalty, interest or any other sum payable by an assessee or a person under Customs Act, 1962, the demands raised under orders dated 24.10.2002 lapse. The appeals abate. Case-Laws Customs Wed, 30 Apr 2025 00:00:00 +0530