Bank Account Freeze for Deceased Father's GST Dues Quashed by Bombay High Court: Navin Vishwanathan vs State of Maharashtra

Case Background and Overview

The Bombay High Court recently delivered a significant ruling in Navin Vishwanathan vs State of Maharashtra and Ors., addressing a critical question that arises with increasing frequency in GST enforcement: can the tax department freeze the bank account of a living assessee to recover outstanding dues of a deceased parent, merely on the basis of a shared trade name — and without issuing any prior show cause notice?

The Court answered this emphatically in the negative, quashing the attachment order and directing immediate de-freezing of the petitioner's bank account. The judgment reinforces foundational principles of natural justice and constitutional property rights within the GST recovery framework.

Factual Matrix: Two Separate Businesses, One Trade Name

Understanding the facts is essential to appreciate the legal significance of this ruling.

The Father's Business

The petitioner's father, late Mr. Pudugraman Neelakantan Vishwanathan, operated a proprietorship firm engaged in labour supply and employment services under the trade name M/s. Oriental Facility, holding GST Registration No. 27AMGPP7304N1ZL. The principal place of business was located at Sector 8B, Flat No. C-232, Vikasani CHS, CBD Belapur, Thane – 400614.

This GST registration was subsequently cancelled suo motu with effect from 1st January 2023, pursuant to an order dated 7th March 2024 passed on a show cause notice dated 29th December 2022.

The petitioner's father passed away on 11th February 2024.

The Petitioner's Independent Business

Prior to his father's passing, the petitioner had independently established his own proprietorship business — also engaged in labour supply and employment services — and adopted the same trade name M/s. Oriental Facility, ostensibly as a tribute to his father's legacy.

Crucially, the petitioner obtained a separate GST registration on 22nd February 2023, bearing GSTIN 27ADXPN900D1ZD, and operated from an entirely different registered place of business at Office No. 807, Prabhat Center Annex, CBD Belapur, Navi Mumbai – 400614.

It was not in dispute before the Court that both entities were separately registered taxable persons under the GST regime.

Chronology of Departmental Action

The sequence of events that led to the writ petition is as follows:

  1. 16th February 2024 — Just five days after the father's death, Respondent No. 2 (Deputy Commissioner of State Tax) issued an order in Form DRC-07 under Rule 142(5) of the CGST Rules, 2017, raising a demand of approximately ₹3,86,61,652/- against the deceased father's proprietorship.

  2. The petitioner challenged the attachment of his father's bank accounts by filing an appeal and depositing 10% of the disputed tax demand. Following correspondence with the department, the father's bank accounts were released from attachment.

  3. 21st March 2025 — Nearly a year later, Respondent No. 2 invoked Section 79 and Section 93 of the Central Goods and Services Tax Act, 2017 and issued Form GST DRC-13 to Respondent No. 3 (State Bank of India, CBD Belapur Branch), directing recovery of dues aggregating ₹4,15,54,508/- allegedly owed by the deceased father towards tax, cess, interest, and penalty.

  4. Acting on this direction, the petitioner's personal bank account bearing No. 41485511814 was frozen without any prior show cause notice or opportunity of hearing being granted to the petitioner.

  5. 24th March 2025 — The petitioner filed a representation asserting that his business was legally distinct from his deceased father's and requesting immediate de-freezing of his account. No action was taken by the department.

  6. The petitioner thereafter filed the present writ petition under Articles 226 and 300A of the Constitution of India.

Competing Arguments Before the Court

Submissions on Behalf of the Petitioner

Learned counsel for the petitioner advanced the following contentions: