Case Law Details
Lalitha Subramanian Vs Union of India And 3 Ors. (Allahabad High Court)
Introduction: In the case of Lalitha Subramanian vs. Union of India and Others, heard at the Allahabad High Court, the petitioner challenges a demand cum show cause notice issued by the Assistant Commissioner, Central Goods & Service Tax, Division-I, Noida, dated 26.03.2021. The subsequent order dated 27.02.2023 by the Principal Commissioner, Central Goods & Service Tax Commissionerate, Noida, imposing tax liability, penalty, and interest on M/s TSR Subramanian, a Sole Proprietorship Firm, is also contested. The central issue revolves around the alleged tax liability for the Financial Year 2014-15 on the late Sri T.S.R. Subramanian, the sole proprietor, who passed away on 26.02.2018.
Background: The petitioner, Lalitha Subramanian, contends that the notice and order were erroneously issued against her deceased husband. The petitioner had duly communicated the demise of her husband to the authorities, providing a death certificate and explaining the discrepancy in gross receipts. It was asserted that the alleged tax liability was related to pension income of her late husband. Despite these communications, the impugned order was passed on 27.02.2023.
Petitioner’s Arguments: The primary grounds for challenging the impugned notice and order include:
- The notice was issued against a deceased person, and the authorities were informed of this fact.
- No show cause notice was served upon the petitioner, and no communication regarding a personal hearing was received.
- The proceedings were initiated after an illegal delay of five years from the relevant date.
- The firm M/s TSR Subramanian was a Sole Proprietorship Firm, and the petitioner, being the legal representative, was not served any notice.
Respondent’s Defense: The learned counsel for the respondents attempted to justify the order, arguing that it was passed against the firm M/s TSR Subramanian. However, the counsel failed to counter the petitioner’s claim that the firm was a Sole Proprietorship Firm and that the demise of the sole proprietor was duly communicated.
Court’s Decision: Upon hearing both parties and examining the impugned order, the Court found that the Assistant Commissioner had acknowledged the death of the petitioner’s husband. However, it was noted that no notice was served upon the petitioner as the legal representative of the deceased assessee.
Court’s Ruling: The Court set aside the impugned order dated 27.02.2023 and remitted the matter back to the Assistant Commissioner, Central Goods & Service Tax, Division-I, Noida, for a fresh decision. The Court emphasized the need to afford a personal hearing to the petitioner or her representative, considering the petitioner’s age (stated to be 79 years). No fresh notice was required to be issued, and the petitioner was directed to appear before the Assistant Commissioner on 28.11.2023 with a certified copy of the Court’s order. The petitioner was allowed to file objections along with supporting documents, and the Assistant Commissioner was directed to decide the matter expeditiously, preferably within two months and in accordance with the law.
Conclusion: The judgment in Lalitha Subramanian Vs Union of India provides a significant legal precedent emphasizing the importance of serving notices to the legal representatives of deceased assessees and ensuring a fair opportunity for a personal hearing. The Court’s decision reflects a commitment to due process and fairness in tax proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
Heard Sri Utkarsh Srivastava, learned counsel for the petitioner, Sri Amit Mahajan, learned counsel for the Respondent Nos.2, 3 & 4 and Sri Gopal Verma, learned counsel, who has appeared for the Union of India.
The challenge in this writ petition is to the demand cum show cause notice dated 26.03.2021 issued by the Respondent No.3, Assistant Commissioner, Central Goods & Service Tax, Division-I, E-23B, Sector-8, Noida, as also the consequential order dated 27.02.2023 passed by the Respondent No.2, Principal Commissioner, Central Goods & Service Tax Commissionerate, Noida , C-56/42, Sector-62, Noida, whereby and where under 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 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 impugned notice dated 26.03.202 1 and the consequential order dated 27.02.2023 are being assailed on the ground that the notice was issued against the dead person inasmuch as the 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. Besides communicating the death of her husband, it was informed by way of the said letter dated 18.12.2020 that any 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 which was Rs.10,77,750/-.
It is further 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. It is also argued that no show cause notice dated 26.03.202 1 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 is also argued that the impugned demand cum show cause notice dated 26.03.202 1 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. It is, accordingly, submitted that the impugned order is liable to be set aside.
Sri Amit Mahajan, learned counsel appearing for the contesting respondents has attempted to justify the order on the ground that the impugned order has been passed against the firm M/s TSR Subramanian. He, however, has not been able to refute the submissions of learned counsel for 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.
We have heard the respective counsel for the parties and have perused the record as also the impugned order dated 27.02.2023. We find 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. 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.
In view of the above, we are of the view that the impugned order dated 27.02.2023 is liable to be set aside and is, accordingly, set aside. The matter is remitted back to the Assistant Commissioner, Central Goods & Service Tax, Division-I, Noida, for decision afresh after affording personnel hearing to the petitioner or to her representative considering the age of the petitioner, which is stated to be 79 years. The Assistant Commissioner, Central Goods & Service Tax, Division-I, Noida shall not be required to issue fresh notice to the petitioner. We direct the petitioner or her representative to appear before the Assistant Commissioner, Central Goods & Service Tax, Division-I, Noida on 28.11.2023 along with certified copy of the order of this Court. We permit the petitioner to file objections along with all 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 preferably within a period of two months after considering all respect of the matter strictly in accordance with law.
The writ petition is disposed of with the above direction.
