Tax Liability Order Against Deceased Valid Under GST Act Section 74(10) and General Clauses Act Section 9

The HC held that the tax liability order against the deceased individual was not barred by limitation under Section 74(10) of the GST Act, applying Section 9 of the General Clauses Act, 1897, which fixed the limitation period from 06.02.2020. Since the order was passed on 05.02.2025, it was within the limitation period. The petitioner was given multiple opportunities to respond, and notices were properly served. The court found no grounds to interfere with the order but allowed the petitioner liberty to file a statutory appeal under Section 107 within 30 days of receiving the order. The appeal was disposed of accordingly.

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ISSUES:

Whether the impugned order under Section 74 of the TNGST / CGST Act, 2017, passed for the Assessment Year 2017-2018, is barred by limitation under Section 74(10) of the GST enactments.Whether tax liability can be fastened on a deceased individual in respect of the proprietary concern operated by the deceased.Whether the petitioner was afforded adequate opportunity to respond to the show cause notice and whether procedural requirements were complied with.Whether the petitioner is entitled to file a statutory appeal under Section 107 of the GST Act against the impugned order.

RULINGS / HOLDINGS:

The contention that the impugned order is barred by limitation under Section 74(10) is rejected because, applying Section 9 of the General Clauses Act, 1897, the limitation period commenced from 06.02.2020, making the order dated 05.02.2025 within the permissible period.The tax liability was validly fastened on the deceased individual's proprietary concern since inward supplies continued post demise, and the business was operated by the manager without formal closure.The petitioner was afforded sufficient opportunity to respond, including service of notice in Form DRC-01 via RPAD and upload on the GST portal, and the reply was duly considered before passing the order.The petitioner is granted liberty to file a statutory appeal under Section 107 of the GST Act within 30 days, which the Appellate Authority shall entertain and dispose of on merits within three months, subject to mandatory pre-deposit.

RATIONALE:

The Court applied Section 74(10) of the GST enactments in conjunction with Section 9 of the General Clauses Act, 1897, to determine the correct commencement of the limitation period for passing assessment orders.The Court relied on the principle that tax liability under GST can extend to proprietary concerns operated by deceased persons if business operations continue post demise without proper closure.Procedural fairness was ensured by adherence to service requirements, including notice issuance through Registered Post Acknowledgement Due (RPAD) and electronic communication via the GST portal.The Court recognized the statutory right of appeal under Section 107 of the GST Act and emphasized the requirement of mandatory pre-deposit for appellate consideration, ensuring compliance with procedural safeguards.

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