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2021 (6) TMI 735 - AT - Service TaxLiability on legal heir of the dues of deceased - whether for the period October 2009 to February 2014, the successor or the son of Shri Kuldeep Singh is liable to pay dues of services provided by Shri Kuldeep Singh or not? - HELD THAT - It is very much clear that in case of transfer or otherwise disposal of the business, in such circumstances, only the successor is liable to pay the dues. There is no provision in law till yet in case of death of the proprietor of the firm who will be liable to pay the dues thereof - Reliance placed in the case of SHABINA ABRAHAM AND OTHERS VERSUS COLLECTOR OF CENTRAL EXCISE CUSTOMS 2015 (7) TMI 1036 - SUPREME COURT where it was held that in case of death of the proprietor of the firm, no liability can be fastened on the legal heir for the period till the lifetime of the proprietor. No demand of service tax can be fastened on the son of late Shri Kuldeep Singh for the period October 2009 to February 2014 - the impugned order is modified that the revenue shall determine the liability of the appellant firm w.e.f. 01.03.2014 - Appeal allowed - decided in favor of appellant.
Issues:
Liability of service tax for the period October 2009 to February 2014 on the successor or son of the deceased proprietor. Analysis: Issue 1: Liability of service tax for the period October 2009 to February 2014 on the successor or son of the deceased proprietor. The appellant, a cable operator firm, was owned by Late Shri Kuldeep Singh, who passed away in March 2014. The dispute arose regarding the liability of service tax for the period from October 2009 to February 2014. The Ld. Commissioner (Appeals) remanded the matter back to determine the liability based on the decision in the case of Blue Star Communication. The appellant's counsel argued that as the proprietor had passed away, the liability for the period before his demise is not sustainable. The Authorized Representative contended that since the business was taken over by the son, who undertook the liabilities, he should be responsible for the service tax dues. The crux of the issue was whether the successor or son of the deceased proprietor is liable to pay the service tax dues for the mentioned period. The Appellate Tribunal analyzed the legal provisions and precedent judgments. It was noted that in case of transfer or disposal of the business, only the successor is liable to pay the dues. The Tribunal referred to the decision in the case of Shabina Abraham, emphasizing that there is no provision to recover dues from a deceased proprietor's lifetime. The Tribunal also considered the decision in the case of Dhiren Gandhi, which highlighted that legal heirs cannot be held liable under the Act. The Tribunal reiterated that in the event of the proprietor's death, no liability can be imposed on the legal heir for the period until the proprietor's lifetime. Consequently, the Tribunal held that the son of Late Shri Kuldeep Singh is not liable to pay the service tax for the period in question. The impugned order was modified, directing the revenue to determine the liability of the appellant firm from March 2014 onwards, in line with the Blue Star Communication case. In conclusion, the appeal was disposed of in favor of the appellant, clarifying the liability of the son for the service tax dues and setting the timeline for determining the firm's liability post the proprietor's demise.
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