Orissa HC says Service Tax Proceedings Against Deceased Proprietor Abate Without Statutory Authority

The Orissa High Court held that service tax proceedings under Section 73 of the Finance Act, 1994 cannot be continued against the legal heir of a deceased sole proprietor in the absence of an express statutory provision. Relying on the Supreme Court's decision in Shabina Abraham, the Court held that the expression “assessee”, defined under Section 65(7), includes the person liable to pay service tax and his agent, but does not extend to a legal heir merely by virtue of succession. The Court accordingly set aside the Order-in-Original passed against the deceased proprietor and quashed the consequential recovery direction issued to his widow.