Legal representative liability is limited to inherited estate; seized third-party funds cannot be appropriated for another's tax dues.

Recovery of tax dues from seized funds in the hands of a purported legal representative was impermissible where there was no proof that the money represented inherited estate or that the petitioner had participated in the assessment or recovery proceedings. A legal representative's liability under the Income-tax Act is confined to the extent of the estate inherited from the deceased and cannot be extended to third-party assets without statutory authority and lawful notice. The appropriation was held illegal and without jurisdiction, and refund of the seized amount with interest was directed.

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Issues: Whether the tax liability of a deceased or another person could be recovered from cash seized from the petitioner by invoking provisions relating to legal representatives and recovery.

Analysis: The petitioner's money had been seized in a separate search conducted years after the death of the alleged source of liability. The material on record did not show that the petitioner had inherited any estate from the deceased or that the seized amount represented estate capable of being proceeded against. The proceedings creating or finalising the tax demand had not been conducted with notice to, or participation of, the petitioner or his brothers. The liability of a legal representative under the Income-tax Act extends only to the extent of the estate inherited and cannot be enlarged beyond that. Recovery from seized funds of the petitioner, without proof of inheritance or prior opportunity of hearing, was beyond the statutory framework and contrary to settled principles governing assessment and recovery from legal representatives.

Conclusion: The appropriation was illegal and without jurisdiction. The petitioner was entitled to refund of the seized amount with interest, and the order sustaining the appropriation was set aside.

Ratio Decidendi: Recovery from a legal representative can be made only to the extent of the estate inherited from the deceased and after lawful notice and determination; seized assets of a third party cannot be appropriated towards another's tax dues without statutory authority.

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