The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi Bench has held that assessment proceedings cannot be continued against the legal heir of the deceased assessee.
The bench of Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the sole proprietor, Pushpa Mehta passed away soon after the issuance of the show cause notice while the adjudication proceedings were pending. In the circumstances, it was incumbent upon the Adjudicating Authority to have closed the proceedings as having abated. The order passed by the Adjudicating Authority is, therefore, void ab initio and, therefore, unsustainable.
The Show cause notice was issued to Ms. Pushpa Mehta, M/s. Mehta & Company, who were engaged in the manufacturing of water meters on job work basis. The activities were claimed to be exempt from the levy of service tax under Notification No.25/2012-ST dated 20.06.2012. During the pendency of the adjudication proceedings, the sole proprietor passed away on 8.12.2018.
A letter was submitted regarding the demise of the assessee. However, the Adjudicating Authority proceeded to pass the order-in-original dated 30.07.2019 confirming the demand for tax, interest and penalty, in the name of the deceased proprietor.
The appeal filed by the appellant being the legal heir has been rejected by the impugned order for not making the mandatory pre-deposit and also that the appeal was not maintainable as the proprietor had passed away.
The tribunal held that on the death of the sole proprietor the proceedings before the Adjudicating Authority stood abated and, therefore, the order-in-original is non-est. Consequently, the order is also not sustainable as the proceedings had already been lapsed. The demand is, therefore, set aside.
Case Details
Case Title: Manish Mehta Versus Commissioner
Case No.: Service Tax Appeal No. 50422 Of 2021
Date: 17.10.2025
Counsel For Appellant: CA Kuldeep Lodha
Counsel For Respondent: AR Aejaz Ahmad
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