Assessment Orders Issued to Deceased Person Void; Matter Remanded for Fresh Adjudication with Notice to Legal Heir

Issue: Whether assessment orders and notices issued in the name of a deceased assessee, without notice to the legal heir, are valid under Section 73 of the CGST Act, 2017.

Facts:

The proprietor/assessee expired on May 7, 2022.
Revenue authorities continued issuing notices and passed assessment orders in the name of the deceased person.
The legal heir (wife) was unaware of the proceedings until intimation of recovery proceedings.

Decision:

The court held that notices issued to a dead person and assessment orders passed based on such notices are void ab initio (from the beginning).
The court also held that orders passed without notice to the legal heir violate the principles of natural justice.
The impugned orders were set aside.
The matter was remanded with a direction to allow the legal heir to file a reply within four weeks and provide an opportunity for a personal hearing.
The writ petitions were allowed.

Key Takeaways:

Void Ab Initio Orders: Assessment orders and notices issued to a deceased person are legally invalid from the outset.
Notice to Legal Heir: It is mandatory to issue notices to the legal heir of a deceased assessee before proceeding with assessment or recovery.
Violation of Natural Justice: Failure to provide notice to the legal heir violates the fundamental principles of natural justice.
Remand for Fresh Adjudication: The matter was remanded to ensure that the legal heir is given a fair opportunity to present their case.
Protection of Legal Heir’s Rights: This decision protects the rights of legal heirs and prevents the continuation of proceedings against deceased persons without their knowledge.
The court is reinforcing the need to follow basic legal principles, and to ensure that all parties are given a fair hearing, even after a death.

HIGH COURT OF MADRAS

Ramasamy Singaravelan

Deputy State Tax Officer

Krishnan Ramasamy, J.

W.P. Nos. 28496 and 28499 of 2024
W.M.P. Nos. 31070, 31071, 31072 and 31073 of 2024

SEPTEMBER 25, 2024

Mrs. R. Hemalatha for the Petitioner. V. Prashanth Kiran, Government Advocate for the Respondent.

ORDER

1. As the issued involved in both the Writ Petitions is identical in nature, with consent of parties, both the Writ Petitions are taken up together and disposed of at the stage of admission itself.

2. The challenge in Writ Petition No.28496 of 2024 is to the order dated 26.12.2023 along with consequential order dated 26.12.2023 for the tax period 2017-18 and to quash the same.

2.1 The challenge in Writ Petition No.28499 of 2024 is to the orde dated 28.03.2024 and consequential order dated 30.03.2024 for the tax period 2022-23 and quash the same.

3. Mrs. R. Hemalatha, learned counsel for the petitioner would submit that the Proprietor of the Firm, viz., Ramasamy Singaravelan had passed away as early as on 07.05.2022, however, all the notices, which culminated in the impugned orders were issued in the name of the said deceased person, hence, the petitioner, viz., S.Sumathi, the wife of the said deceased, is not aware of the same and the petitioner came to know about the impugned orders, only when the respondent intimated through phone call about the initiation of recovery proceedings, therefore, the petitioner is before this Court by way for present Writ Petitions.

3.1 The learned counsel assailed the impugned orders by contending that the notices issued to a dead person and assessment orders passed based on such notices are void ab initio and liable to be set aside, accordingly, prayed for setting aside the impugned orders. The learned counsel also submitted that the petitioner, being the legal heir of the deceased, Ramasamy Singaravelan, viz. wife, would file reply and contest the matter, and hence, sought for appropriate orders.

4. Mr.V.Prashanth Kiran, learned Government Advocate (T) for the respondent since the petitioner undertook to file reply and contest the issue, the prayer may be considered.

5. I have given due considerations to the submissions made on either side and perused the materials available on record.

6. On perusal of records, it is seen that the deceased, viz., Mr.Ramasamy Singaravelan was an assessee on the files of the respondent under the provisions of Tamil Nadu Goods and Service Tax Act, 2017 and the said person died as early as on 07.05.2022, however, the respondent, who is ignorant of the said fact has been continuously issuing notices in the name of the said deceased person and also passed assessment orders and not stopping with that also proceeded to initiate recovery proceedings. The petitioner came to know about the impugned proceedings only when the same was intimated by the respondent through phone call and on receipt of the recovery notice.

7. Thus, it is crystal clear the impugned orders are ex parte orders, and suffers from violation of principles of natural justice and de hors the same, the notices issued to an assessee, who is no more and assessment orders passed based on such notices are void ab initio and liable to be set aside. Hence, this Court is inclined to set aside the impugned orders.

8. Accordingly, this Court passes the following orders:-

(i)

The orders impugned in both Writ Petition dated 26.12.2023 and 28.03.2024 respectively as well as the consequential orders towards initiation of recovery proceedings dated 26.12.2023 and 30.03.2024 are set aside.

(ii)

The matters are remitted back to the respondent for fresh consideration.

(iii)

The petitioner, viz. S.Sumathi, who is the legally wedded wife of the deceased Ramasamy Singaravelan shall file replies to the DRC-01 Notices dated 27.09.2023 and 07.02.2024, respectively (which were issued in the name of the Proprietary concern) within a period of four weeks from the date of receipt of a certified copy of this order.

(iv)

On receipt of such reply/objection by the petitioner, the respondent shall consider the same and issue a 14 days clear notice by fixing the date of personal hearing to the petitioner and thereafter, pass appropriate orders in accordance with law, after hearing the petitioner in full, as expeditiously as possible.

9. In the result, both the Writ Petitions are allowed on the aforesaid terms. No costs. Consequently, connected Miscellaneous Petitions are closed.