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2015 (7) TMI 593 - HC - Service TaxRecovery of tax u/s 87 from successor of deceased proprietor - SCN was issued to the deceased but could not be adjudicated during his life time - garnishee notices - Whether respondents 2 to 4 could have initiated recovery proceedings under Section 87 of Finance Act when there is no adjudication or quantification of the amount due and payable by the registered service tax provider - Held that:- the words "amount payable by a person" will have to be considered in the background of Section 73 of the Act inasmuch as, show cause notice issued under Section 73(1) of the Act is required to be adjudicated after considering representation of the person if filed and thereafter determine the amount payable. Undisputedly, in the instant case, show cause notices dated 05.08.2009, 19.10.2009 and 22.04.2015 having been issued to the service provider, has not yet been adjudicated and as such, respondents-2 to 4 could not have taken recourse to invoke Section 87 for recovering the amounts due from the service provider by issuance of garnishee notices to respondents-5 to 8. Though the respondents have sought to defend such action on the ground that these amounts had been collected by the service provider and same had not been remitted to the department or to the account of the Central Government, the course left open to respondents-2 to 4 is as provided under Section 73(1) namely, adjudicating the show cause notices and thereafter on such adjudication, resort to recover the amount so determined to be due from the service provider by taking steps as provided under Section 87. It cannot be gain said by the respondents that on the strength of the investigation conducted by them by enquiring with the service recipients, they are recovering the amounts reflected in the show cause notice dated 22.04.2015 by issuance of garnishee notices to respondents-5 to 8 and if such contention or plea is accepted, it would render the adjudication process itself otiose or nugatory, in as much as, in all cases the respondents can take a stand and contend that the investigation conducted by them is sufficient to recover tax even before adjudication is complete or even before the amount due is quantified. To put it differently, the adjudication of show cause notices after recovering alleged amounts due would be a post decisional hearing and would become an empty formality. Same not being the intention of the Parliament can be gathered from the scheme of the Act - In view of the recovery made by the respondent No.4 pursuant to the recovery notices Annexure L, N P and R respectively and same having been held to be illegal, consequential orders to direct the fourth respondent to remit the amount back to the respective accounts is required to be issued, since such recovery was without authority of law. - Decided in favour of assessee.
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