Allahabad HC: A Notice Must Be Served on Legal Representative of Deceased Before GST Proceedings

The Allahabad High Court’s ruling mandates serving notice to the deceased’s legal representative before taking action under the Goods and Service Tax Act, 2017 (GST Act).

The issue in the writ petition is to the demand cum show cause notice which is been issued via the Assistant Commissioner, Central Goods & Service Tax, as also the consequential order passed by the Respondent No.2, Principal Commissioner, Central Goods & Service Tax Commissionerate, whereunder M/s TSR Subramanian, a Sole Proprietorship Firm run by the husband of the petitioner namely late T.S.R.

Subramanian is in the business of furnishing the services as a Consultant and has been saddled with a tax obligation of Rs.8,97,716/- under the proviso to Section 73(1) of the Finance Act, 1994 read with Sections 142, 173, 174 of the Central Goods & Service Tax Act, 2017 towards Service Tax for the Financial Year 2014-15 along with equivalent penalty and interest thereon.

Under the impugned order, an additional penalty of Rs 10,000 has been levied under Section 71(1)(c) of the Finance Act, 1994 read with Sections 142, 173, 174 of the Central Goods & Service Tax Act, 2017.

As per the counsel, it stated that the factum of death of her husband was duly communicated to the respondents till the impugned order 27.02.2023 passed and that no-show cause notice on 26.03.2021 referred to in the impugned order 27.02.2023 was ever served on the applicant. No letters or communication in concern with the affording chance of the personal hearing was served on the applicant and the impugned order is ex-parte and against a dead person.

It contended that the impugned demand cum show cause notice on 26.03.2021 on the grounds of which the impugned order on 27.02.2023 has been passed related to the FY 2014-15 and as such, the whole proceedings are patently illegal that have been executed post 5 year duration from the related date.

Read also: Delhi ITAT: Re-adjudication After Assessee’s Death During Tax Assessment

A Division Bench of Chief Justice Pritinker Diwaker and Justice Ashutosh Srivastava noted that We believe that the department should have notified the petitioner, who is the legal representative of the deceased, before taking any further action. The challenged order does not mention anywhere that the department served notice to the petitioner as the legal representative of the deceased taxpayer.