Proceedings to assess tax liabilities against a deceased individual are invalid unless explicitly provided for in law, thereby recognizing the absence of liability for legal heirs.

JUDGMENT :

MURAHARI SRI RAMAN, J.

An Order-in-Original dated 30.08.2024 (Annexure-5) of the Assistant Commissioner of Goods and Services Tax and Central Excise, Bhubaneswar-II Division, Bhubaneswar, raising a demand of service tax under Section 73 , Section 75 , Section 77 and Section 78 of Chapter-V of the FINANCE ACT , 1994 (for convenience hereinafter be referred to as "the Act, 1994"), pertaining to Financial Years 2015-16 and 2016-17, is assailed in the afore-noted writ petition craving to invoke extraordinary jurisdiction under Articles 226 and 227 of the Constitution of India with the prayer(s) to grant following relief(s):

"Under the above mentioned facts and in the circumstances of the case, this Hon'ble Court may graciously be pleased to:

(i) Admit this writ petition and to issue show cause to the opposite parties as to why the Adjudication Order passed under Annexure-5 dated 30.08.2024 shall not be quashed in the interest of justice;

(ii) If the opposite parties fail to show appropriate cause or show insufficient cause, then writ shall be issued quashing the Order dated 30.08.2024 under Annexure-5;

(iii) Pass such other order/orders, direction/directions, as this Hon'ble Court may deem just and proper under the facts and circumstances of the case, in the interest of justice;

And for this Act of kindness, the petitioner, as in duty bound, shall ever pray."

Case of the petitioner:

2. Late Atal Bihari Senapati, the husband of petitioner (Smt. Kanakalata Senapati, the wife of the deceased) was carrying on business in the name and style "Senapati Palace" and engaged in the business of providing short stay facility (room rent). Eighteen rooms with normal basic facilities were given on rent at nominal price for the lower and middle class people.

2.1. During the Financial years 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.

2.2. 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 the Financial Years 2015-16 and 2016-17 respectively, in order to disclose taxable income under the provisions of INCOME TAX ACT , 1961, Atal Bihari Senapati (be called "service provider" for brevity) got his books of account audited and filed his return of income after making payment of admitted tax liability.

2.3. 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, though it did not attract any of the Clauses of Section 66D of the Act, 1994, as amended from time to time, nor did it fall under any of the events enumerated in Mega Exemption Notification No.25/2012-ST dated 20.06.2012. Hence, being unsure of category of service exigible to tax, said Authority assuming failure of the petitioner to get himself registered and pay service tax for the Financial Years 2015-16 and 2016-17, observed that the service provider appeared to have deliberately contravened the provisions of Section 66B for failure to levy service tax on value of taxable service at applicable rate, Section 67 for failure to pay service tax on receipt against taxable service read with Rule 3 of the Service Tax (Determination of Value) Rule, 2006, Section 68 for failure to deposit service tax at the rate specified in Section 66B by 5^th of the month