The Allahabad High Court ruled that notice should be served on the legal representative of the deceased before proceeding under the Goods and Service Tax Act, 2017 (GST Act).
The challenge in the writ petition is to the demand cum show cause notice issued by the Assistant Commissioner, Central Goods & Service Tax, as also the consequential order passed by the Respondent No.2, Principal Commissioner, Central Goods & Service Tax Commissionerate, whereunder M/s TSR Subramanian, a Sole Proprietorship Firm run by the husband of the petitioner namely late T.S.R. Subramanian, engaged in providing services as a Consultant has been saddled with tax liability of Rs.8,97,716/- under the proviso to Section 73(1) of the Finance Act, 1994 read with Sections 142, 173, 174 of the Central Goods & Service Tax Act, 2017 towards Service Tax for the Financial Year 2014-15 along with equivalent penalty and interest thereon.
Further, under the impugned order a further penalty of Rs.10,000/- has been imposed under Section 71(1)(c) of the Finance Act, 1994 read with Sections 142, 173, 174 of the Central Goods & Service Tax Act, 2017.
The counsel submitted that though the factum of death of her husband was duly communicated to the respondents yet the impugned order dated 27.02.2023 has been passed and that no show cause notice dated 26.03.2021 referred to in the impugned order dated 27.02.2023 was ever served upon the petitioner and no letters or communication in relation to affording opportunity of personal hearing was served upon the petitioner and the impugned order is ex-parte and against a dead person.
It was also argued that the impugned demand cum show cause notice dated 26.03.2021 on the basis of which the impugned order dated 27.02.2023 has been passed, pertains to Financial Year 2014-15 and as such, the entire proceedings are patently illegal having been initiated after a period of five years from the relevant date.
A Division Bench of Chief Justice Pritinker Diwaker and Justice Ashutosh Srivastava observed that “We are of the opinion that the department was required to serve notice upon the petitioner being the legal representative of the deceased before proceeding in the matter. The impugned order nowhere records that notice issued by the department was served upon the petitioner being the legal representative of the deceased assessee.”
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