Smt. Kanakalata Senapati Vs Assistant Commissioner GST and Central Excise (Orissa High Court)
Orissa High Court held that “legal heir” cannot fall within ken of Section 65(7) of the Finance Act, 1994 hence proceedings under section 73 of the Finance Act determining service tax after the death of the service provider is unsustainable in law. Accordingly, the present writ petition is allowed.
Facts- The husband of petitioner was carrying on business in the name and style “Senapati Palace” and engaged in the business of providing short stay facility (room rent). During F.Y. 2015-16 and 2016-17, the room rent was charged ranging from Rs.500.00 to Rs.800.00 per day. Since the room rent charges per day was below the ceiling limit, the service rendered did not come within the fold of charging provision under the Act, 1994. Therefore, there was no requirement to file return under the said Act.
Since the gross rent received from lodging business was to the tune of Rs.57,77,263.00 and Rs.63,64,363.00 for F.Y. 2015-16 and 2016-17 respectively, in order to disclose taxable income under the provisions of Income Tax Act, 1961, the husband of the petitioner got his books of account audited. After obtaining information from the web-portal of the Income Tax Department, the Superintendent of Goods and Services Tax and Central Excise-opposite party No.2 under a notion that the service provider was engaged in providing taxable service. The opposite party No.2 issued Demand-cum-Show Cause Notice dated 30.12.2020 wherein, the non-payment of service tax including cess has been proposed for recovery under the provisions of Section 73 of the Act along with applicable rate of interest u/s. 75 of the Act. This apart, it was proposed to impose penalties u/s. 77 and 78 thereof. During the pandemic situation that engulfed entire world, the noticee-husband of the petitioner died on 04.06.2021. Conspicuously around four years from the date of issue of SCN the successor-in-office passed ex parte Adjudication Order on 30.08.2024 in the name of dead person.
