Kanakalata Senapati v. Assistant Commissioner, GST and Central Excise
The Finance Act did not supply such a continuation rule. An heir was not an agent merely through succession, so the section 73 proceeding abated and section 87 recovery fell with it.
By CA Nikhil Gupta · Reviewed against the retained judgment 2026-09-26
The Finance Act did not supply such a continuation rule. An heir was not an agent merely through succession, so the section 73 proceeding abated and section 87 recovery fell with it. Adjudication order of 30 August 2024 and recovery communication of 30 May 2025 quashed.
What happened
Service-tax adjudication and recovery continued after the sole proprietor’s death, with an order for roughly ₹17.92 lakh tax and ₹18.12 lakh penalty against the legal heir.
Questions before the court
- Could liability proceedings survive against heirs without a statutory machinery provision making them assessees or agents?
Why the court ruled this way
The Finance Act did not supply such a continuation rule. An heir was not an agent merely through succession, so the section 73 proceeding abated and section 87 recovery fell with it.
Controlling point
The Finance Act did not supply such a continuation rule. An heir was not an agent merely through succession, so the section 73 proceeding abated and section 87 recovery fell with it.
Order and next steps
Adjudication order of 30 August 2024 and recovery communication of 30 May 2025 quashed.
Practical implications
The operative result is case-specific: Adjudication order of 30 August 2024 and recovery communication of 30 May 2025 quashed. Apply it within the court’s stated limit: The case concerns a deceased sole proprietor and the identified statute; it does not address a separate statutory successor-liability regime.
Limits of this ruling
- The case concerns a deceased sole proprietor and the identified statute; it does not address a separate statutory successor-liability regime.
Law and judgment source
- Finance Act, 1994, sections 73 and 87
- Service-tax recovery after sole proprietor death
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Source checked: 2026-09-26 · Judgment paragraphs: paragraphs 9–12 · Later case history: not verified. Verify appeals, stays and subsequent orders before reliance.
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