Order passed against deceased is void: Kerala High Court

Benoy Abraham, legal heir of the late Santhamma T. Vs. State Tax Inspector (Kerala High Court)

Summary: In case Benoy Abraham v. State Revenue OfficerThe Kerala High Court has ruled that an order passed against a deceased person is invalid. The petitioner, Mr. Benoy Abraham, was the legal heir of the late Mrs. Santhamma T, a registered dealer, who died on June 8, 2021, before the issuance of the show cause notice. Even though the tax authority knew about her death, he issued an order demanding payment in her name. The court emphasized that while Section 93 of the Central Goods and Services Tax Act, 2017 allows for continuation of proceedings against legal heirs, it does not allow for completion of proceedings against a deceased person. Thus, the court overturned the contested resolution, finding that it had no legal force. The tax authority was directed to issue notices to the applicant, who has power of attorney for the other legal heirs, which will enable them to represent the deceased in future proceedings. The resolution emphasizes the need for tax authorities to follow legal protocols regarding deceased individuals and their estates, and outlines proper procedures for resolving tax liabilities in such cases.

Hon’ble Kerala High Court in the case Benoy Abraham v. State Revenue Officer (Writ Petition (C) No. 10362 of 2024 dated 09.07.2024) granted the application for a writ and set aside the order that the order made against the deceased person was void. Article 93 of the Civil Code. The Central Goods and Services Tax Act, 2017 (“CGST Act”) permits the continuation of proceedings against the heirs at law, but does not permit the completion of proceedings against a deceased person. The tax authorities ordered the legal proceedings against the legal heirs to continue by sending notice to the comptroller, who has power of attorney for the other legal heirs.

Facts:

Mr. Benoy Abraham (“The Petitioner”) was one of the legal heirs of the late Mrs. Santhamma T. (“Dead”)who was a registered dealer under the CGST Act which expired on June 8, 2021 even before the issuance of show cause notice and the fact was brought to the notice of the State Tax Officer. (“Defendant”) See response dated 06/06/2023.

The death certificate of the deceased was also produced and despite the fact that the deceased was known to be dead, an order was passed. (“Challenged Order”) was made on behalf of the late Santhamma T. The plaintiff contended that the order was made in respect of a deceased person, the order is void and liable to be set aside.

Thus, aggrieved by the Impugned Order, the petitioner filed the present writ petition.

Problem:

Is an order issued in the name of a deceased GST dealer valid?

Held:

The Hon’ble Kerala High Court at Benoy Abraham v. State Revenue Officer (Writ Petition (C) No. 10362 of 2024 carried out as indicated:

• It is observed that the Impugned Order appears to have been passed in respect of a deceased person and is, therefore, void. It may be true that the provisions of Section 93 of the CGST Acts allow for continuation of proceedings against the legal heirs of a deceased person in the event of cessation of business. However, the said provision does not permit the continuation and completion of proceedings against a deceased person. Therefore, the Impugned Order is void, as rightly contended by the learned counsel appearing for the petitioner.
• He ruled that this petition was granted and the Impugned Order was set aside. The defendant was allowed to continue proceedings against the legal heirs of the deceased. Since the plaintiff, who was one of the legal heirs of the deceased, is also the trustee of the other legal heirs, the defendant can serve notices to the plaintiff to complete the proceedings. Such notice to the plaintiff will be considered due notice to other legal heirs.

Our comments:

Section 93 of the CGST Act governs “Special provisions regarding liability for tax, interest or penalties in certain cases” Section 93(1) of the CGST Act states thatand as otherwise provided in the Insolvency and Bankruptcy Code, 2016 (31 of 2016), if a person liable to pay tax, interest or penalty under this Act dies, then:

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

(b) if the business carried on by a person ceases before or after his death, his legal representative is obliged to pay compensation from the estate of the deceased to the extent that the estate is capable of covering the expenses. the fee, tax, interest or penalty due from such person under this Law,

whether such tax, interest or penalties were assessed before his death but remained unpaid, or assessed after his death.

Hon’ble Madras High Court in the case Rekha. S, Kavita. S, Sudha. Ganesh v. Assistant Commissioner (ST), Chennai Madras High Court provided relief to the legal heirs of the deceased by quashing the GST order passed against the deceased on the ground that the order was made against the deceased person which is not provided for in law.

FULL TEXT OF THE JUDGMENT/TERMINATION OF THE HIGH COURT OF KERALA

The petitioner is one of the legal heirs of the late Santhamma T., who was a registered dealer under the CGST/SGST Act. Certain proceedings were initiated against the aforesaid Santhamma T. and an Ext.P3 order was passed demanding payment of certain amounts. It is the case of the plaintiff that Santhamma T. expired on 06/08/2021 even before the issuance of show cause notice and this fact was brought to the notice of the defendant by way of reply Ext.P2 dated 06/06/2023. It is stated that the death certificate of Santhamma T. was also produced along with Ext.P2. It is also contended that despite having knowledge of the death of Santhamma T., the order Ext.P3 was passed by the respondent on behalf of the deceased Santhamma T. It is the case of the learned counsel for the petitioner who since Ext.P3. A P3 order was made against a deceased person and the order is invalid and must be set aside.

2. The Hon’ble Government submits that as per the provisions of Section 93 of the CGST/SGST Act, the taxation of a deceased person can be continued either in respect of the legal heirs or in respect of another person who may continue to carry on the business or if the business is discontinued in respect of the legal heirs. heirs of the deceased dealer. It is submitted that in the circumstances of the present case, the liability established against the deceased dealer through Ext.P3 should be paid by the legal heirs since in the case of the plaintiff the business had ceased. It is further submitted that the proceedings must somehow come to an end and, therefore, the proceedings must be continued against the legal heirs of the deceased dealer. It is also submitted that Ext.P3 can only be treated as a proceeding against the legal heirs of the deceased dealer and if the plaintiff is aggrieved by Ext.P3, he should have availed himself of alternative remedies.

3. The learned counsel appearing on behalf of the petitioner submits in reply that the petitioner herein is one of the legal heirs of the late Santhamma T and the holder of the power of attorney for the other legal heirs whose names are mentioned in Ext.P4 Legal Succession. Certificate. The learned counsel submitted that the power of attorney issued by the other legal heirs of the late Santhamma T. in favor of the petitioner is also registered as Ext.P5. It is further submitted that the proceedings can be concluded afresh by issuing notice to the petitioner since the petitioner is also competent to represent the other legal heirs of the late Santhamma T.

4. Having heard the learned counsel appearing for the petitioner and the learned senior Government Pleader, I am of the view that since Ext.P3 appears to have been passed against a deceased person, the said order is void. It may be true that the provisions of Section 93 of the CGST/SGST Acts permit continuation of proceedings against the legal heirs of a deceased person in the event of cessation of business. However, the said provision does not permit the continuation and completion of proceedings against a deceased person. Therefore, the order Ext.P3 is void as rightly contended by the learned counsel appearing on behalf of the petitioner.

Accordingly, this writ petition is granted and Ext.P3 is quashed. The defendant is allowed to continue the proceedings against the legal heirs of the late Santhamma T. Since the plaintiff, who is one of the legal heirs of the late Santhamma T, is also the trustee of the other legal heirs, the defendant can serve notices on the plaintiff to complete the proceedings. Such notice to the applicant will be considered due notice to other legal heirs. The plaintiff shall appear before the defendant at 11.00 am on 25.07.2024, after which the proceedings shall be completed as stated above within three months from the date of receipt of the certified copy of this award. The applicant may file additional responses/objections to the notices that may have been issued by the respondent.

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