Kanakalata Senapati vs. The Assistant Commissioner, GST And Central Excise Bbsr- Ii Division

Facts

The petitioner, Smt. Kanakalata Senapati, assails an Order-in-Original dated 30.08.2024 passed by the Assistant Commissioner of GST and Central Excise, Bhubaneswar-II Division. This order raised a demand of service tax, interest, and penalties for Financial Years 2015-16 and 2016-17 against her deceased husband, late Atal Bihari Senapati, who operated a lodging business. The Show Cause Notice (SCN) was issued on 30.12.2020. The petitioner's husband passed away on 04.06.2021. The petitioner informed the authorities of his death on 03.06.2024. Despite this, the Assistant Commissioner passed an ex parte adjudication order in the name of the deceased. The petitioner contends that the order is non est in law as it was passed against a dead person, and the proceedings should have abated.

Held

The Court held that the Order-in-Original dated 30.08.2024, passed by the Assistant Commissioner of GST and Central Excise, Bhubaneswar-II Division, in the name of a deceased person, is invalid and non est in the eyes of law. The Court reasoned that Chapter-V of the Finance Act, 1994, specifically Section 73, deals with proceedings against a "person chargeable with service tax." The term "person" as defined and interpreted by the Supreme Court does not extend to legal heirs in the absence of explicit statutory provisions. Therefore, upon the death of the service provider (Atal Bihari Senapati) on 04.06.2021, the proceedings initiated by the Show Cause Notice dated 30.12.2020 were abated. The Court relied on the Supreme Court's decision in Shabina Abraham Vrs. Collector of Central Excise and Customs, (2015) 10 SCC 770, which held that proceedings abate in the absence of a statutory provision to continue them after the death of the assessee. Consequently, the Order-in-Original and the subsequent recovery demand letter dated 30.05.2025 were set aside. The writ petition was allowed.

Key Issues

1. Whether the Order-in-Original dated 30.08.2024, passed against a deceased person, is valid in law, considering the absence of a specific statutory provision in Chapter-V of the Finance Act, 1994, to continue proceedings against a legal heir after the death of the service provider? (Question of law) 2. Whether the proceedings initiated under Section 73 of the Finance Act, 1994, for recovery of service tax, abate upon the death of the assessee, in the absence of explicit provisions for continuation against legal heirs? (Question of law) Petitioner's Arguments: - The Order-in-Original is non est in law and a nullity as it was passed against a dead person. In the absence of a statutory provision to continue proceedings against a non-existing person, the proceedings stand abated. - The Finance Act, 1994, does not contain any provision to continue proceedings under Section 73 against a legal heir after the death of the service provider. - The judgment of the Supreme Court in Shabina Abraham Vrs. Collector of Central Excise and Customs, (2015) 10 SCC 770, supports the contention that proceedings abate in the absence of a statutory provision. Revenue's Arguments: - The revenue, through the Junior Standing Counsel, sought accommodation to obtain instructions and did not present substantive arguments against the petitioner's claims during the hearing.