Proceedings Beyond Death - Notice Must Reach the Living

Death Does Not End the Tax Question - But It Changes the Person Against Whom the Law Must Proceed

Tax liability and tax proceedings are not necessarily extinguished by the death of a taxpayer. The law may permit an existing liability to be recovered and, in appropriate circumstances, may even permit determination of liability after death. But that does not mean that proceedings can simply continue in the name of a person who is no longer alive. The distinction between the survival of a liability and the validity of the proceedings to enforce that liability is fundamental.

Section 93 of the Central Goods and Services Tax Act, 2017 specifically deals with liability to pay tax, interest or penalty in certain cases, including the death of a taxable person. It recognises different consequences depending upon whether the business is continued after death or is discontinued. Where the business is discontinued, the legal representative's liability is confined to the estate of the deceased and only to the extent to which that estate is capable of meeting the charge.

The Goods and Services Tax Appellate Tribunal, Thiruvananthapuram Bench, has examined this important distinction in Vijayan Sahadevan (Deceased) v. Commissioner of Kerala State GST, Thiruvananthapuram, 2026 (8) TMI 1362 - GSTAT THIRUVANANTHAPURAM. The judgment is significant not merely because of its conclusion under Section 93, but also because the Tribunal has drawn upon an extensive and remarkably consistent body of recent High Court jurisprudence concerning GST proceedings against deceased sole proprietors.

The Dispute Began with Belated Returns and Denial of ITC

The controversy had nothing to do with the proprietor's death. An assessment notice dated 05.03.2020 was issued, alleging belated filing of the GSTR-3B return for March 2018. ITC amounting to Rs. 1,72,430 was proposed to be disallowed under Section 16(4), along with interest. Subsequent proceedings culminated in an ex parte adjudication order dated 15.02.2022, imposing tax, interest and penalty. The first appeal was also rejected.

Thereafter, circumstances changed materially. The GST registration was cancelled with effect from 06.06.2023, and the proprietor died on 05.09.2024. His son, claiming to be the legal heir, subsequently filed an appeal before the GSTAT on 26.03.2026. The record indicated that the business had not continued after the cancellation of registration and the proprietor's death.

This brought Section 93 into focus. The Tribunal specifically examined whether the Department had followed the procedure contemplated by Section 93(1)(b) after the proprietor's death. It also examined a separate question on the merits: whether the ITC earlier denied under Section 16(4) had become admissible because of the retrospective insertion of Section 16(5).

Section 93 Draws an Important Line Between Continuation and Discontinuation of Business

Section 93(1) itself contains an important distinction. If the business carried on by the deceased is continued after his death by the legal representative or another person, Section 93(1)(a) makes that person liable to pay the tax, interest or penalty due from the deceased.

The position is different where the business is discontinued, whether before or after death. Section 93(1)(b) provides that the legal representative shall be liable to pay the dues out of the estate of the deceased, and only to the extent to which the estate is capable of meeting the charge. Significantly, the provision covers a liability determined before death but remaining unpaid, as well as a liability determined after death.

Thus, death does not necessarily extinguish the underlying tax liability. What changes is the legal route through which that liability can be determined or recovered. In the case of a discontinued business, Section 93 does not make the legal heir personally liable for the deceased's tax dues merely because he is the heir. The statutory liability is linked to the estate inherited from the deceased.

A Deceased Person Cannot Remain the Subject of Living Proceedings

This distinction formed the basis of the Tribunal's reasoning. The deceased proprietor's business had not been continued. Consequently, any liability arising from the dispute had to be considered under Section 93(1)(b).

The Tribunal found that no effort had been made to ascertain whether there was any estate of the deceased in the hands of the legal representative. More importantly, no notice had been issued to the legal heir to recover the dues. Accordingly, there had been no process against the legal representative under Section 93(1)(b).

The principle emerging from the decision is important. The statutory survival of a tax liability cannot be confused with the procedural survival of proceedings against the deceased. The Department may have a statutory right to pursue the liability, but it must pursue the correct person and follow the procedure prescribed by law. Notice and an opportunity of hearing are not empty formalities in this context; they provide the legal foundation for fastening the statutory liability upon the legal representative within the limits prescribed by Section 93.

The High Courts Have Consistently Insisted Upon Notice to the Legal Representative

An important feature of the judgment is the Tribunal's reliance on a substantial line of recent High Court decisions. Rather than treating the issue as an isolated question of statutory interpretation, the Tribunal examined the developing jurisprudence on proceedings against deceased proprietors.

In SSS Agro Foods v. Assistant Commissioner (ST), 2026 (8) TMI 899, the Andhra Pradesh High Court held that assessment proceedings could not validly continue against a deceased proprietor. Fresh proceedings had to be initiated against the appropriate legal representative after notice and hearing, and recovery remained confined to the deceased's estate. In Chotu Devi v. Union of India, 2026 (8) TMI 308 - Rajasthan High Court, the Rajasthan High Court similarly emphasised that the statutory liability of a legal representative does not dispense with procedural safeguards. Independent notice, an opportunity of hearing, and a reasoned determination remain necessary.

The Orissa High Court, in J.S. Enterprisers v. Superintendent, Central GST, 2026 (7) TMI 1524 - Orissa HC - went to the root of the matter by treating notice to a living, correctly identified person as a foundational jurisdictional requirement. Proceedings under Section 73 against a deceased sole proprietor could not be sustained merely because an authorised representative had participated. The defect was not one that participation could cure.

Likewise, in BKR Services Pvt. Ltd. v. State of Karnataka, 2026 (8) TMI 774 - Karnataka HC - the Karnataka High Court recognised the separate legal identity of a private limited company and held that a deceased proprietor's liabilities could not be recovered from the company through recovery proceedings. The liability had to be examined under Section 93(1)(a) or Section 93(1)(b).

Section 93 Permits Post-Death Action - But Against the Right Person

The jurisprudence considered by the Tribunal also brings out an important qualification. It would be too broad to state that no tax proceeding whatsoever can be initiated after the taxpayer's death. Section 93 itself contemplates circumstances in which liability may be determined after death.

The Madras High Court specifically recognised this in V. Damayanti, W/o. Late V. Vasudevan (Proprietor, M/s. Vasu Chemicals) Versus The Superintendent of GST and Central Excise, Madurai cited in

2026 (6) TMI 1093 - Madras HC - 2026-VIL-620-MAD. The decision recognised that Section 93, read with Sections 73, 74 and 74A, permits post-death initiation of assessment and recovery proceedings against the legal heir. The expression "person chargeable with tax" is not necessarily confined to the registered taxable person who has died. However, where the business has been discontinued, recovery against the legal heir remains confined to the inherited estate.

Similarly, in S.B. Enterprises v. Directorate General of GST Intelligence, 2026 (6) TMI 790 - Jharkhand HC, the Jharkhand High Court held that proceedings could not continue against a deceased sole proprietor without first taking steps against the legal representative. If the Department intended to proceed further, it needed to issue notice to the legal representative.

The correct proposition, therefore, is that death does not necessarily destroy the Department's substantive claim. Rather, death changes the procedural identity of the person against whom the law must operate. Section 93 preserves the liability in specified circumstances while simultaneously prescribing the limits within which it can be enforced.

Allahabad High Court Decisions Reinforce the Same Jurisdictional Principle

The Tribunal also referred to a series of decisions of the Allahabad High Court. In P.B. Sethi Plastics v. State of U.P.,2026 (2) TMI 390 - Allahabad HC - assessment and recovery proceedings under Section 73 against a deceased proprietor were held unsustainable because the liability had to be pursued against the legal representative after due notice and an opportunity to respond. Importantly, the defect went to the root of jurisdiction and could not be brushed aside merely on the ground that the subsequent appeal was delayed.

In Rajvanti Devi v. State of U.P., 2026 (2) TMI 164 – Allahabad HC - show-cause notices and tax determinations issued to a deceased proprietor were similarly held invalid because the legal representative had not been served and given an opportunity to respond. Sambul Shahid v. State of U.P., 2025 (12) TMI 937 - Allahabad HC - reiterated that Section 93 does not authorise determination of liability against a deceased person merely because it recognises the liability of the legal representative.

The Tribunal also noted Shubhangi Gupta v. State of U.P., 2025 (9) TMI 595 - Allahabad HC - where proceedings initiated against a deceased person, despite the authorities having been informed of the death, were found unsustainable. The proper course was to proceed against the legal representatives in accordance with law.

Viewed together, these decisions establish a consistent theme. Section 93 provides for the lawful continuation of liability after death; it is not a licence to continue proceedings in the name of the deceased.

No Notice, No Inquiry into the Estate - The Proceedings Could Not Survive

Applying the above jurisprudence, the Tribunal found a fundamental deficiency in the Department's action. No notice had been issued to the legal heir, and no inquiry had been made into whether any estate of the deceased had been inherited and was available to satisfy the tax liability.

This omission was particularly significant because Section 93(1)(b) itself makes the estate the measure of the legal representative's liability. Unless the estate's existence and extent are examined, the statutory basis and limits of recovery remain undetermined.

The Tribunal consequently found the appellate order unsustainable in the absence of action under Section 93. Its conclusion reinforces a broader principle of tax administration: a substantive power of recovery must always be exercised through the procedural route prescribed by the statute.

A Second Issue - Retrospective Section 16(5) Changed the Merits of the ITC Dispute

Although Section 93 occupies the larger part of the judgment, the Tribunal also decided an important ITC issue. The original demand arose because ITC was denied under Section 16(4) due to the belated filing of the relevant returns for FY 2017-18.

The legal position subsequently changed. Section 16(5) was inserted by Section 118 of the Finance (No. 2) Act, 2024, with retrospective effect from 01.07.2017. Notwithstanding Section 16(4), it allows ITC in respect of invoices or debit notes pertaining to FYs 2017-18, 2018-19, 2019-20 and 2020-21, where the return under Section 39 was filed up to 30.11.2021.

The Tribunal found that the relevant returns in the present case had been filed well before 30.11.2021. The dispute related to FY 2017-18, which fell squarely within the period covered by Section 16(5). Consequently, the appellant was entitled to ITC, notwithstanding the earlier disallowance under Section 16(4).

Retrospective Relief Must Be Given Effect in Pending Proceedings

The ITC aspect of the judgment illustrates another important principle. Once the legislature retrospectively alters the legal position and the dispute remains alive in appellate proceedings, the matter must ordinarily be examined in light of the retrospectively amended law.

The Department itself did not oppose the consideration of Section 16(5), subject to verification. Circular No. 237/31/2024-GST dated 15.10.2024 was also noted to direct adjudicating and appellate authorities to take cognisance of the retrospectively inserted provision while deciding matters pending before them.

The Tribunal ultimately found, on the available record, that the returns had been filed within the outer date prescribed under Section 16(5). Accordingly, the ITC denial could not survive. The Order-in-Appeal was set aside, and the appeals were allowed with consequential relief.

Liability May Survive Death - Proceedings Against the Deceased Cannot

Vijayan Sahadevan reinforces a clear distinction between the survival of tax liability and the legality of its enforcement. While Section 93 preserves liability after death, proceedings must comply with the safeguards applicable to legal representatives and, where the business stands discontinued, recovery remains confined to the inherited estate.

The judgment also highlights the effect of retrospective legislative relief, as Section 16(5) removed the very basis of the ITC denial. The enduring principle is simple: death does not extinguish a lawful tax liability, but its enforcement must follow due process; and retrospective statutory relief must be given effect in a pending proceeding.

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