Smt. Devan Anisha Vs Union of India (Chhattisgarh High Court)
The Chhattisgarh High Court considered a writ petition challenging a garnishee notice issued under Section 87(b) of the Finance Act, 1994 and Section 142 of the CGST Act, 2017, seeking recovery of service tax dues from the legal heirs of a deceased sole proprietor. The petitioner sought quashing of the demand notice and a direction restraining the Revenue from recovering the dues of the deceased from his legal heirs.
The petitioner submitted that Mahendran Rupesh Naidu, proprietor of M/s Mahendran Rupesh Naidu, carried on subcontracting services during the financial year 2013-14. A show cause notice dated 12.10.2018 alleged non-payment of service tax of Rs. 10,74,919 on receipts of Rs. 86,96,757. The demand was confirmed by the Adjudicating Authority by order dated 30.06.2020, along with penalty and late fees. An appeal against the order was dismissed on 03.02.2023. The proprietor died on 03.05.2023, and thereafter a demand notice dated 13.12.2024 was issued to his legal representatives. The petitioner relied on the decision of the Supreme Court in Shabina Abraham Vs. Collector of Central Excise and Customs, contending that recovery proceedings could not be initiated against the legal heirs of a deceased sole proprietor.
