M/s.Service Care Pvt. Ltd. vs The Deputy Commissioner & ors.

Pursuant to the last hearing, Ms.Hema Muralikrishnan has returned with instructions.

1.1. She affirms that no assessment order has been passed against the assessee, which is a proprietorship concern bearing the name ""Service

Care"".

To be noted, on the previous date, I had passed the following order. Therefore, in order to avoid prolixity, the order dated 20.01.2017 is

extracted hereafter :

1.Issue notice. Ms.Hema Muralikrishnan, learned Standing Counsel accepts notice on behalf of the respondents. Learned counsel says that she

will obtain instructions in the matter.

2.In brief, the case of the petitioner is that, service tax liability, which is sought to be recovered by the respondents is that of a proprietorship

concern which was owned by the deceased father of the Managing Director of the petitioner Company.

To be noted, the proprietorship concern goes by the name ''Service Care''. The petitioner Company, as is evident from the cause title bears the

name: ''Service Care Private Limited''.

It is the case of the learned counsel for the petitioner that the petitioner Company is registered with the Bangalore Commissionerate and

therefore, the respondents would have no jurisdiction in the matter.

Furthermore, the learned counsel for the petitioner says that even though the proprietorship concern stood dissolved upon the death of the

proprietor i.e., her father one, Mr.Jalaludin, no assessment order has been passed qua the said entity to the knowledge of the Managing Director

of the petitioner Company.

Therefore, the submission of the learned counsel for the petitioner, is that, initiation of recovery proceedings without having passed an

assessment order are illegal and unsustainable in law.

It is however conceded by the learned counsel for the petitioner that the clients of the erstwhile proprietorship concern are now being serviced

by the petitioner Company. It is, however, the case of the petitioner Company that service is being rendered under separate and fresh agreements

with the clients of the erstwhile proprietorship concern.

In these circumstances, what is required to be enquired is, as to whether, firstly, any assessment order has been passed with respect to the

erstwhile proprietorship concern. Secondly, as to whether clients of the erstwhile proprietorship concern including L & T Valves Limited against

whom the garnishee order has been issued owed any money to the proprietorship concern.

Re-notify on 24.01.2017.

A perusal of the aforesaid extract would show that the grievance of the petitioner is that the garnishee order issued, qua its customer, i.e., L & T

Valves Limited, has been passed without any basis in law. The situation is no different qua the garnishee order issued to the other customer of the

petitioner, namely, M.N.Dastur and Company (P) Ltd.

The petitioner''s grievance is that no tax is due on its account to the respondents and tax, if any due, was payable, if at all, by the erstwhile

proprietorship concern.

4.1. It is submitted that since, the proprietor has died leaving behind no estate, no recovery could be made from the petitioner, only because L & T

Valves Limited and M.N.Dastur and Company (P) Ltd., were earlier customers of the proprietorship concern.

Having perused the record and heard the counsel for the parties, according to me, the respondents could not have, willynilly, passed the

garnishee orders without first passing an assessment order.

5.1. Admittedly, no assessment order has been passed.

In these circumstances, the garnishee orders appended at page No.15 and 17 of the typed set of documents are set aside. To that extent, the

prayer made in W.P.No.1468 of 2017 is modified. In so far as the prayer made in W.P.No.1469 of 2017 is concerned, the same is not pressed

before me. Liberty, though, is given to seek refund, if any, in accordance with law, by instituting appropriate proceedings in that behalf.

6.1. Needless to say, if, otherwise entitled in law, the respondent would be free to initiate proceedings against the estate of the proprietorship

concern, having regard to the extant provisions of law.

The writ petitions are disposed of in the aforesaid terms. Resultantly, pending application is closed. No costs.