Tax Proceedings Halted: Legal Heir Granted Fresh Opportunity After Taxpayer's Death Under GST Act Section 74(9)

HC invalidated tax order due to taxpayer's death before hearing. The court set aside the proceedings under Section 74(9) of GST Act, directing a fresh opportunity for legal heir to respond. Proper Officer instructed to expedite new proceedings within 8 weeks, without examining case merits, ensuring procedural fairness for legal representative.

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Issues Involved:
Challenge to order under Section 74 (9) of West Bengal GST/CGST Act, 2017 for tax period April 2018-March 2019 due to demise of registered taxpayer before the order was passed.

Analysis:
The writ petition challenges an order passed under Section 74 (9) of the West Bengal GST/CGST Act, 2017 for the tax period April 2018-March 2019, following the death of the registered taxpayer before the order was issued. The petitioner, as the legal heir, argues that the order and proceedings are null and void due to the demise of the registered taxpayer. The petitioner's counsel emphasizes the death certificate as evidence of the taxpayer's death, seeking to set aside the order and request a fresh opportunity for response.

The respondents argue that the registered taxpayer had received a show cause notice and an opportunity for a hearing, but failed to attend the hearing, leading to the closure of proceedings and the subsequent passing of an adjudication order. They contend that since no intimation of the taxpayer's death was provided, the order is valid, and the petitioner has the option to appeal rather than seeking writ jurisdiction intervention.

Upon review, the court notes that the registered taxpayer had responded to the show cause notice and was granted a hearing opportunity, which coincided with the taxpayer's passing. Despite the lack of intimation to the Proper Officer regarding the death, the court finds that the proceedings, including the order, are vitiated due to the taxpayer's demise before the hearing date.

Consequently, the court declares the order under Section 74 (9) of the said Act as unenforceable and sets it aside. However, recognizing the petitioner as the legal heir, the court directs that the show cause notice is deemed to be issued in favor of the legal representative of the deceased taxpayer. The legal representative is granted an opportunity for a hearing, with the liberty to file an additional response consistent with the original response by the taxpayer.

The court instructs the Proper Officer to expedite the proceedings within eight weeks from the order's communication, emphasizing that the decision should be made promptly without unnecessary adjournments. The court clarifies that it has not delved into the case's merits, leaving it to the Proper Officer to adjudicate in accordance with the law. The order passed by the Proper Officer on 13th March 2024 is thereby set aside, and the writ petition is disposed of without costs.

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