The Calcutta High Court quashed an SCN issued in the name of a deceased sole proprietor, ordered fresh notices to the legal heirs, and clarified that Sections 73 and 74 provide the procedural machinery to determine tax liability.
A GST show cause notice (SCN) issued in the name of a deceased person is legally unsustainable and was set aside by the Calcutta High Court.
The proper procedure is to issue a fresh SCN to the legal representative in their own name, identifying them as the deceased's legal heirs, and allow a personal hearing.
A bench led by Justice Smita Das De quashed the SCN, the consequential Order-in-Original, and subsequent recovery notices. The court held that the machinery for determining tax liability is provided by Sections 73 and 74, which require issuance of a show cause notice to the person liable. The court stated that determination of tax cannot proceed against a dead person and that issuing an SCN to a deceased person is legally unsustainable.
The court directed the department to issue a fresh SCN to the legal heirs in their own names describing them as legal representatives of the deceased. The authorities must provide the legal heirs a chance of personal hearing and pass a reasoned, speaking order. The court gave the department three weeks to issue the fresh SCN.
The petitioner relied on precedents, including the Supreme Court decision in Shabina Abraham v. Collector of Central Excise and Customs. The Calcutta High Court relied on that ruling to reinforce that section 93 does not supply the assessment machinery and that notice must be given to the legal representative.
The HC disposed of the writ petition without deciding the merits of the underlying tax demand. The relief granted is procedural: setting aside notices issued in the name of the deceased and ordering fresh proceedings that comply with the CGST Act's notice and hearing requirements. The court also limited the legal representative's financial obligation under Section 93(1)(b) to the value of the inherited estate.
What this means for taxpayers and authorities
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