2024 (10) TMI 1004 - HC - GST

Legal Heirs Can Be Pursued for Tax Proceedings When Business Continues After Dealer's Death Under CGST/SGST Act

SC quashed Ext.P3 order issued against a deceased dealer under CGST/SGST Act. Court held that proceedings cannot be initiated directly against a deceased ... Order passed against a deceased person is a nullity - continuance of assessment proceedings against legal heirs under Section 93 of the CGST/SGST Act - notice to Power of Attorney holder deemed proper notice to other legal heirsOrder passed against a deceased person is a nullity - Ext.P3, which was issued in the name of the deceased dealer, is void and liable to be quashed. - HELD THAT: - The Court found that although Section 93 of the CGST/SGST Acts permits continuation of proceedings against the legal heirs where the business is discontinued, that provision does not empower the authority to continue or culminate proceedings in the name of a deceased person. Since Ext.P3 was issued against late Santhamma T., it was issued in the name of a person who had already died and therefore is a nullity. The petitioner's contention that death had been brought to the respondent's notice with supporting documentation was accepted for the purpose of this determination. [Paras 4]Ext.P3 is quashed as being a nullity.Continuance of assessment proceedings against legal heirs under Section 93 of the CGST/SGST Act - notice to Power of Attorney holder deemed proper notice to other legal heirs - Proceedings may be continued against the legal heirs and the respondent is directed to issue fresh notices to the petitioner, who holds Power of Attorney for other legal heirs, with a timeframe for completion. - HELD THAT: - The Court permitted the respondent to continue the proceedings against the legal heirs of the deceased dealer under the statutory scheme, observing that liabilities determined against a deceased dealer may be pursued against legal heirs where the business is discontinued. As the petitioner is one of the legal heirs and holds Powers of Attorney from the other legal heirs (recorded as Ext.P5), the Court directed that notices issued to the petitioner will be deemed proper notice to all legal heirs. The petitioner was directed to appear on the stated date and the respondent was directed to complete the proceedings within three months from receipt of a certified copy of this judgment; the petitioner is permitted to file supplementary replies or objections. [Paras 4]Respondent may proceed against the legal heirs; notices to the petitioner as Power of Attorney holder shall be treated as proper notice to other legal heirs and the proceedings shall be completed within the stipulated period.Final Conclusion: Writ petition allowed; Ext.P3 quashed as a nullity. Respondent permitted to continue proceedings against the legal heirs and to issue fresh notices to the petitioner (who holds Power of Attorney for the other legal heirs), with directions to complete the proceedings within three months from receipt of a certified copy of this judgment. Issues:1. Validity of Ext.P3 order passed against a deceased person.2. Interpretation of Section 93 of the CGST/SGST Act regarding proceedings against legal heirs of a deceased dealer.3. Authority of legal heirs to represent other legal heirs in ongoing proceedings.Analysis:1. The petitioner, a legal heir of a deceased registered dealer under the CGST/SGST Act, challenged the validity of Ext.P3 order issued post the dealer's demise. The petitioner argued that the order against a deceased person is a nullity. The court agreed, stating that while Section 93 allows proceedings against legal heirs if the business is continued/discontinued, it does not authorize actions against a deceased person. Consequently, Ext.P3 was deemed null and quashed.2. The Government Pleader contended that under Section 93, liabilities against a deceased dealer can be pursued against legal heirs if the business is discontinued. However, the court clarified that this provision does not permit proceedings against the deceased person directly. The court directed the respondent to proceed against the legal heirs, including the petitioner who holds Power of Attorney for others, ensuring proper notices are issued to all legal heirs for completion of proceedings.3. The petitioner, being one of the legal heirs and holding Power of Attorney for others, sought to represent all legal heirs in ongoing proceedings. The court acknowledged the petitioner's authority to act on behalf of other legal heirs mentioned in the Legal Heirship Certificate. It directed the respondent to issue notices to the petitioner for further proceedings, considering such notice as proper notification to all legal heirs. The petitioner was granted the opportunity to file supplementary replies/objections to any notices issued by the respondent.In conclusion, the court allowed the writ petition, quashed Ext.P3, and directed the respondent to continue proceedings against the legal heirs. The petitioner, as a legal heir and Power of Attorney holder for others, was instructed to appear for further proceedings within a specified timeline. The judgment emphasized the distinction between pursuing actions against a deceased person and legal heirs under the CGST/SGST Act, ensuring due process and representation for all concerned parties.