Two-judge bench of the Gujarat High Court comprising Justice Akil Kureshi and Justice A.Y. Kogje in the case of Meena Krishna Agarwal Versus Assistant Commissioner decided that Tax Arrears of a deceased assessee cannot be recovered out of the personal properties of wife.
In instant petition assessee’s wife Smt. Meena K. Agarwal has challenged the action of the department in attaching her immovable properties and creating charge on such properties for the recovery of the dues of her husband.
The Commissioner of Central Excise and Customs confirmed duty demand of huge amount on two proprietorships which was run by Krishna Agarwal (petitioners husband) and also imposed matching penalties to the company and personal penalties to him.
This all were done because of serious allegations of unpaid excise duties as also wrongly claiming unpaid export incentives concerning the proprietary concerns were reported.
Petitioner’s husband challenged the same before CESTAT, during the appeal pending he died and accordingly CESTAT deleted the personal penalty and substituted his wife as legal heir and confirmed the duty demand.
The petitioner got a notice for the recovery of said demands from her immovable and personal properties from the department and she contended that said property belongs to her own income.
Finally High Court observed that if the petitioner is correct in contending that all the four immovable properties were purchased from her fund, the department cannot carry out recovery action against such property merely because her husband died leaving behind sizable departmental dues.
“The husband of the petitioner having expired, the department seeks recovery of dues from her immovable properties. The assessee having expired, the government dues can be recovered from his properties even in the hands of his legal heirs who might have inherited such properties. In other words, the property of the deceased can be made answerable for recovery of the unpaid dues of the department. The personal properties of the legal heir which has nothing to do with the inheritance, simply cannot be utilized for such recoveries.”
The court directed revenue to check the source of petitioner’s property and act according to the above observation.
Subscribe Taxscan Premium to view the Judgment
