The Hon’ble High Court of Allahabad vide its order dated 07.11.2023 in the matter of Mrs. Lalitha Subramanian Vs. Union of India and 3 Others in Writ Tax No. – 1137 of 2023, held that the department is required to serve notice upon the legal representative of the deceased person before proceeding in the matter, the order under challenge nowhere records that the notice was served by the department on the legal representative.  On this ground only , ex-parte order passed was set aside.

The Petitioner filed the writ petition before the Hon’ble High Court challenging the show cause notice issued by the Respondent No. 3, Assistant Commissioner, Central Goods & Service Tax, Division-I, as well as the consequential order passed by the respondent no. 2, Principal Commissioner, Central Goods & Service Tax Commissionerate, Noida, whereby a 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, has been raised against M/s TSR Subramanian, a Sole Proprietorship Firm run by the husband of the petitioner namely late Sri T.S.R. Subramanian, engaged in providing services as a Consultant.  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 impugned notice dated 26.03.2021 and the consequential order dated 27.02.2023 are being challenged on the ground that the notice was issued against the dead person (husband of the petitioner) who was the sole proprietor of the firm M/s TSR Subramanian had expired on 26.02.2018 and the said fact was communicated to the Respondent No.4 vide letter dated 18.12.2020 annexing the death certificate in response to a letter dated 07.12.2020 issued by the Respondent No.4 in the name of the firm.  Through the said letter, it was also informed that the alleged difference between gross receipt shown in the Income Tax Return and the gross receipt shown in the Service Tax was due to pension income of her late husband.

Petitioner’s Submissions: –

• Further, it was submitted on the behalf of the petitioner 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.
• No show cause notice or any communication or letter was ever served to the petitioner affording opportunity of personal hearing, and the impugned order is ex-parte and passed against a dead person.
• That the impugned show cause notice dated 26.03.2021 on the basis of which the impugned order has been passed, pertains to financial year 2014-15 and therefore, the entire proceedings are patently illegal being initiated after a period of five years from the relevant date. Thus, the impugned order is liable to be set aside.

On the other hand, an attempt was made on the behalf of the respondents to justify the order on the ground that the impugned order has been passed against the firm M/s TSR Subramanian.  Though, was not able to refute the submission made on behalf of the petitioner that the firm was a Sole Proprietorship Firm and the factum of the demise of Sri TSR Subramanian, the sole proprietor was duly communicated to the authorities and no notice was ever served upon the petitioner or any other legal representative of the deceased Sole Proprietor of the Assessee Firm.

Held: –

• The Hon’ble High Court after considering the submissions made and facts of the case found that the Assistant Commissioner, Central Goods & Service Tax, Division-I, Noida in the impugned order has taken note of the factum of the death of the husband of the Petitioner. The impugned order also states that opportunity of personal hearing was accorded and dates were fixed but neither any authorized representative appeared nor any communication was received from the party even though the communication was made by the department on registered address and registered e-mail.
• Therefore, it was found by the Hon’ble Court that 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.

The Hon’ble Court with the above observations and findings set aside the impugned order dated 27.02.2023 and remitted the matter back to the Assistant Commissioner for decision afresh after affording personal hearing to the petitioner or to her legal representative.  The Petitioner or her representative is directed to appear before the Assistant Commissioner with certified copy of the order of this Court on 28.11.2023.  The Petitioner is permitted to file objections along with documents relied upon in support of her claim before the Assistant Commissioner.  The Assistant Commissioner shall thereafter fix a date for personal hearing and decide the matter expeditiously after considering all respect of the matter strictly in accordance with law.