The Madras High Court has quashed a GST assessment order passed under Section 74 of the CGST/TNGST Act after finding that the proceedings had been initiated and concluded against a person who had died more than two years earlier. However, granted liberty to the GST authorities to initiate fresh proceedings against the deceased taxpayer’s legal heirs in accordance with law.
The bench of Justice Senthilkumar Ramamoorthy held that proceedings culminating in an order against a deceased person are legally unsustainable.
The petitioner approached the High Court contending that the impugned GST order had been passed in the name of Late A. Premnavas, proprietor of Prem Steel Traders, despite his demise on December 7, 2023. The petitioner, being the legal heir, produced both the death certificate and the legal heir certificate before the Court to establish that the taxpayer had passed away long before the adjudication proceedings concluded.
During the hearing, the Government Counsel appearing for the tax department accepted notice and requested that the authorities be permitted to proceed against the legal heirs instead.
Justice Ramamoorthy observed that the death certificate clearly established that the assessee had died before the impugned adjudication order was passed. Since the proceedings culminated in an order against a deceased person, the Court held that the assessment could not survive judicial scrutiny.
The Court concluded that the proceedings were legally unsustainable and liable to be set aside.
While quashing the impugned order, the High Court protected the interests of the revenue by granting liberty to the GST authorities to initiate fresh proceedings after issuing notices to all the legal heirs identified in the legal heir certificate dated February 17, 2024.
The Court clarified that any future proceedings must comply with the requirements of law and afford the legal heirs an opportunity of hearing before any liability is determined.
The Court further directed that the bank attachment, which had been imposed consequentially pursuant to the impugned GST order, would automatically stand lifted.
However, it clarified that if fresh proceedings are initiated in accordance with law, the tax authorities would remain at liberty to take appropriate action, including with respect to the bank accounts of the legal heirs, if warranted under the statutory provisions.
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