Assessment Order Against Deceased Person Invalid; Fresh Assessment Directed Against Legal Heir

Issue

Whether an assessment order passed against a deceased person (or their legal heir without following due process) is valid, and how Section 93 of the GST Act applies regarding the procedure for assessment and the extent of liability of the legal heir.

Facts

Period: July 2017 to March 2018.
The Event: The petitioner’s father (the taxpayer) passed away.
The Action: The GST Department passed an assessment order regarding the father’s liability directly against the petitioner (son) as the legal heir.
Petitioner’s Challenge: The petitioner challenged the validity of the order, arguing that assessment proceedings cannot be initiated or concluded against a dead person.

Decision

The High Court set aside the order and clarified the legal position:

Invalidity of Proceedings: Assessment proceedings can only be initiated against living persons. An order passed against a deceased individual is legally void.
Section 93 Gap: The Court noted that Section 93 of the CGST Act defines liability (who pays) but does not explicitly prescribe the procedure for assessment upon death.
Correct Procedure: The only practicable way to settle the tax affairs of a deceased person is to conduct the assessment by formally involving the legal representative (heir) or the person continuing the business. They must be given notice and a hearing before the order is passed.
Extent of Liability: Crucially, the Court held that if the business is discontinued, the recovery from the legal heir is limited to the extent of the estate of the deceased inherited by them. The heir is not personally liable beyond the assets they received.
Verdict: The impugned assessment order was set aside. The Department was directed to carry out a fresh assessment after involving the petitioner (legal heir). [In favour of assessee]

Key Takeaways

Procedural Mandatory: The Department cannot simply substitute the name of the deceased with the heir in the final order. They must issue notices to the heir and allow them to represent the case from the start.
Limited Liability: A legal heir’s personal assets (like their own salary or house) cannot be attached to pay the father’s GST dues. Only the assets inherited from the father (the estate) can be used for recovery.
Business Continuity: If the heir continues the business, they become fully liable for dues. If the business stops, the liability is capped at the estate value.

HIGH COURT OF ANDHRA PRADESH

Baratam Satish

Joint Commissioner of Central Tax

R RAGHUNANDAN RAO and T.C.D. Sekhar, JJ.

WRIT PETITION NO. 6029 of 2025

DECEMBER 24, 2025

C Sanjeeva Rao for the Petitioner. Y N Vivekananda for the Respondent.

ORDER

R. Raghunandan Rao, J.- The petitioner is the son of Late B. Kameswara Rao, who was the registered person under the provisions of the Goods & Services Tax Act, 2017 [for short “the GST Act”]. He passed away on 21.12.2021. It is stated that the tax consultant was taking care of the affairs of B. Kameswara Rao, who had also expired on 04.03.2023. The petitioner further submits that the business of Late B. Kameswara Rao, under the name of M/s. Aravinda Enterprises had been closed on 20.02.2023 and the same was also approved by the registering authority on 21.04.2023.

2. At that stage, a show cause notice, dated 16.08.2023, was issued for the period July-2017 to March-2018 proposing to levy certain taxes under the CGST and the SGST Acts apart from interest and an amount of Rs.28,952/- as reverse charge mechanism. Thereafter, the assessment proceedings dated 25.01.2024 are said to have been passed.

3. The petitioner has approached this Court challenging the said order of assessment on the ground that it is not accord with the provisions of Section 93 of the GST Act.

4. Section 93(1) of the GST Act reads as follows:-

“Section-93:- Special provisions regarding liability to pay tax, interest or penalty in certain cases.

(1) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016 (31 of 2016), where a person, liable to pay tax, interest or penalty under this Act, dies, then—

(a) if a business carried on by the person is continued after his death by his legal representative or any other person, such legal representative or other person, shall be liable to pay tax, interest or penalty due from such person under this Act; and

(b) if the business carried on by the person is discontinued, whether before or after his death, his legal representative shall be liable to pay, out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax, interest or penalty due from such person under this Act, whether such tax, interest or penalty has been determined before his death but has remained unpaid or is determined after his death.

5. This provision does not deal with the manner in which the assessment proceedings relating to a death person should be carried out. This provision only provides for the method of recovery of taxes and other dues payable by a death person. Section 93(1)(A) of the GST Act provides for recovery of the taxes from the business of the death person if the same is being carried on by his legal representative or any other person. Section 93(1)(b) of the GST Act states that the dues of the death person can be recovered from the estate of the deceased if the business is discontinued. This provision essentially relates to recovery of tax and other amounts due against a death person. This provision does not deal with however assessment is to be carried out against a death person after he has passed away.

6. 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.

7. 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.

8. Accordingly, this Writ Petition is disposed of. There shall be no order as to costs.

As a sequel, interlocutory applications pending, if any shall stand closed.