2026 (1) TMI 50 - HC - GST

GST assessment issued against deceased taxpayer; order set aside, fresh notice to legal heir required u/s93 limits recovery to estate.

An assessment order was challenged as having been passed against a deceased person and as being inconsistent with s.93 of the GST Act. The HC held that ... Assessment order passed against a dead peson - challenge to order of assessment on the ground that it is not accord with the provisions of Section 93 of the GST Act - HELD THAT:- It is settled law that the assessments and other proceedings can only be initiated against the persons who are living and such proceedings against death person would not be valid. However, the fact remains that, under Section 93 of the GST Act, the dues of the death person can be recovered either from the business he had set up or from his estate. In such circumstances, in the absences of any provision, this Court would have to be hold that the only practicable way of settling the affairs of the death person would be to direct the assessment being carried out by involving either the representative or person carrying on the business of a death person or which such business is not being carried on, by involving the legal representative who be holding the estate of the deceased person. In the said circumstances, since the petitioner is the legal representative of the deceased person, being his son, it would be appropriate to set aside the impugned Order, dated 25.01.2024, with a direction to carry out a fresh assessment after involving the petitioner herein, by issuing a notice to the petitioner. Needless to say, any recovery that may be initiated, after an Order of assessment, shall be only against the estate of a deceased person and against the petitioner to the extent of the estate of his deceased father, which is available to the petitioner. Petition disposed off. Issues: Whether an assessment order passed in respect of a deceased person is valid and, if not, whether the impugned assessment should be set aside with direction to carry out a fresh assessment involving the legal representative in accordance with Section 93(1) of the GST Act.Analysis: Section 93(1) provides for recovery of tax, interest or penalty from the business continued by a legal representative or from the estate where the business is discontinued, but does not prescribe the procedural mechanism for conducting assessment proceedings against a deceased person. Assessments and related proceedings cannot validly be initiated against a person who is deceased. In the absence of statutory procedure for assessment of a deceased person, the practical and lawful method to settle liabilities is to involve the legal representative or the person carrying on the business so that recovery can be effected either from the business or out of the estate to the extent the estate is capable of meeting the charge.Conclusion: The impugned assessment is set aside and a fresh assessment shall be carried out after issuing notice to and involving the legal representative; any recovery following assessment shall be made only against the estate of the deceased and against the legal representative to the extent of the estate.