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Issues: (i) Whether, before recovery of tax from the legal representatives of a deceased assessee, the assessing authority must determine who the legal representatives are and the extent of the estate inherited by them; (ii) whether a demand notice issued to an assessee abates on his death so that a fresh demand notice must be issued against the legal representatives before recovery proceedings can continue.
Issue (i): Whether, before recovery of tax from the legal representatives of a deceased assessee, the assessing authority must determine who the legal representatives are and the extent of the estate inherited by them.
Analysis: Section 16 of the Karnataka Sales Tax Act, 1957 and Rule 42 of the Rules recognise that the legal representative of a deceased dealer is liable only to the extent of the assets of the deceased in his hands. That liability cannot be enforced in the abstract. The authority must first identify the legal representatives and ascertain the extent of the estate that has devolved upon them, which necessarily requires notice and an opportunity of hearing to all persons constituting the estate's representatives. Recovery against only one heir, without such determination, is impermissible.
Conclusion: Yes. The assessing authority must first determine the legal representatives and the extent of the estate inherited before initiating recovery against them.
Issue (ii): Whether a demand notice issued to an assessee abates on his death so that a fresh demand notice must be issued against the legal representatives before recovery proceedings can continue.
Analysis: A demand under section 13 of the Karnataka Sales Tax Act, 1957 can be enforced only against a person who is in default. Once the assessee dies, proceedings initiated against him cannot simply be continued against his legal representatives without issuing a proper demand to them. Since the legal representative's liability is confined to the estate inherited, any demand notice must be founded on a prior determination of that liability; otherwise, the demand is ineffective in law.
Conclusion: Yes. The demand notice issued to the deceased assessee does not sustain recovery against the legal representatives, and a proper fresh demand is required after determining their liability.
Final Conclusion: The recovery notices were unsustainable because the legal representatives' liability had not been determined with reference to the estate inherited, and the proceedings could not validly continue on the basis of the demand issued to the deceased assessee.
Ratio Decidendi: Recovery of tax from the legal representatives of a deceased assessee is permissible only after the authority determines the legal representatives and the extent of the estate in their hands, and a demand notice issued to the deceased cannot be treated as a valid basis for continuing recovery against them.
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