GST Assessment Notice/Order cannot be passed against the Deceased Person

In a groundbreaking legal development, the Madras High Court, in the case of Rekha. S v. Assistant Commissioner (ST), issued a significant ruling that could have far-reaching implications in the realm of GST assessments. The court, in W.P.No.35411 of 2023 and W.M.P.No.35374 of 2023 dated December 12, 2023, granted relief to the legal heirs of the deceased, Mr. M.K. Girish. The ruling was based on the principle that a GST Assessment Order against a deceased person is non-est in law, underscoring the legal inability to pass such orders against the dead.

 

Table Section
1. Introduction
2. The Unfolding Scenario
3. Legal Standoff and Petitioner's Challenge
4. Central Issue
5. Court's Definitive Ruling
6. Key Takeaways and Implications
7. FAQs

 

The Unfolding Scenario:

Mr. M.K. Girish, referred to as "the Deceased," passed away on February 25, 2021. Despite the Revenue Department being duly informed of his demise through an online application on June 29, 2022, the department issued FORM DRC-01A dated July 06, 2022, and FORM DRC-01 dated November 21, 2022 ("Impugned Notices") in the name of the Deceased. Subsequently, an Assessment Order ("Impugned Order") dated March 01, 2023, was issued against the Deceased.

 

Legal Standoff and Petitioner's Challenge:

Rekha. S, identified as "the Petitioner/Legal Heir," took a firm stance that initiating proceedings against a deceased person was legally untenable. The Respondent, however, suggested considering the Impugned Notices as applicable to the Petitioner while acknowledging the issuance of the Impugned Notices in the Deceased's name. This prompted the filing of a petition by the Petitioner to challenge both the Impugned Notices and the Assessment Order.

 

 

 

Central Issue:

The crux of the matter was whether GST Notices/Orders could legitimately be passed against a Deceased Person.

 

Court's Definitive Ruling:

The Madras High Court, in its decision, held unequivocally that the Impugned Order was passed against a dead person, rendering it non-est in law and, therefore, liable to be set aside. The court instructed the Petitioners to consider the Impugned Notices issued by the Respondent as issued to them. Additionally, the Petitioner was directed to file a reply to the Impugned Notices within six weeks from the date of receiving the court's order. The Respondent was further directed to pass appropriate orders after providing opportunities for a personal hearing to the Petitioner, resulting in the disposal of the Writ Petition.

 

Key Takeaways and Implications:

This landmark ruling establishes a crucial legal precedent that GST Assessment Notices or Orders cannot be validly issued against a deceased person. The decision not only provides much-needed relief to the legal heirs but also brings clarity to the legal standing of such proceedings. It emphasizes the non-existence of legal grounds for initiating assessments against the deceased in the domain of GST.

 

(FAQs) 

Q1: What was the Madras High Court ruling about?

A1: The Madras High Court, in the case of Rekha. S v. Assistant Commissioner (ST), ruled that GST Assessment Notices or Orders cannot be passed against a deceased person. The court granted relief to the legal heirs of the deceased, setting aside an Assessment Order issued against him.

Q2: Who was the deceased individual in this case?

A2: The deceased individual in this case was Mr. M.K. Girish, who passed away on February 25, 2021.

Q3: Why were GST Assessment Notices issued against a deceased person?

A3: Despite the Revenue Department being informed of Mr. M.K. Girish's demise, GST Notices were issued in his name. The court found this action legally untenable, leading to the ruling in favor of the legal heirs.

Q4: What were the Impugned Notices and the Impugned Order mentioned in the ruling?

A4: The Impugned Notices, namely FORM DRC-01A and FORM DRC-01, were issued in the name of the deceased. The Impugned Order, dated March 01, 2023, was an Assessment Order against the deceased.

Q5: Who filed the petition challenging the Impugned Notices and Order?

A5: Rekha. S, identified as the Petitioner and legal heir of the deceased, filed the petition seeking to set aside the Impugned Notices and Order.

Q6: Why did the Petitioner argue against initiating proceedings against a deceased person?

A6: The Petitioner contended that initiating proceedings against a deceased person was legally untenable, forming the basis for challenging the Impugned Order.

Q7: What was the central issue addressed by the Madras High Court in this ruling?

A7: The central issue was whether GST Notices/Orders could be legitimately passed against a deceased person.

Q8: What was the court's decision regarding the Impugned Order?

A8: The Madras High Court held that the Impugned Order, being passed against a deceased person, is non-est in law. Consequently, the court ruled that it should be set aside.

Q9: What instructions did the court give to the Petitioner and the Respondent after the ruling?

A9: The court directed the Petitioner to consider the Impugned Notices as issued to them and instructed them to file a reply within six weeks. The Respondent was directed to pass appropriate orders after providing opportunities for a personal hearing to the Petitioner.

Q10: What does this ruling mean for businesses and taxpayers?

A10: This ruling establishes a precedent that GST Assessment Notices or Orders cannot be validly issued against a deceased person. It emphasizes the importance of legal boundaries in GST proceedings and provides clarity on the non-existence of legal grounds for such assessments against the deceased. Businesses and taxpayers should take note of this legal development for compliance and future reference

 

Businesses, legal practitioners, and taxpayers alike should take note of this significant legal development. The Madras High Court's decision in Rekha. S v. Assistant Commissioner (ST) serves as a guiding beacon, ensuring that GST assessments adhere to legal principles and cannot extend their reach to individuals who are no longer alive. This ruling reinforces the importance of legal boundaries in GST proceedings and contributes to the evolving landscape of tax law.