Madras High Court Quashes GST Assessment Issued Post Demise of Proprietor

The legal validity of tax assessments finalized against a deceased individual has been a recurring subject of judicial scrutiny. In a recent judicial development, the Madras High Court adjudicated on this precise issue in the matter of D.Pitchairajan Vs Assistant Commissioner(ST)(FAC). The Court examined the enforceability of assessment orders passed after the demise of a business proprietor and the subsequent transmission of tax liabilities to the legal heirs under the statutory framework of the Goods and Services Tax (GST) regime.

This article provides a comprehensive summary of the High Court's ruling, outlining the factual matrix, the legal contentions raised by both parties, and the final judicial directive regarding the quashing and remanding of the disputed assessment orders.

Factual Matrix of the Dispute

The dispute traces back to the business operations of M/s. Parvathaa Exports, a proprietary concern originally managed by D. Parvatham, the mother of the current assessee.

• Demise of the Proprietor: The original proprietrix passed away on 13.05.2023.
• Issuance of Assessment Orders: Subsequent to her passing, the GST authorities finalized and issued assessment orders for the assessment years 2017-18, 2018-19, and 2019-20. These impugned orders were formally passed on 22.06.2023 in the name of the deceased proprietrix.
• Discovery via Attachment Notice: The legal heir (the assessee) claimed complete unawareness of these assessment proceedings. The existence of the tax demands only came to light when the revenue department initiated recovery proceedings by issuing a notice of attachment on 29.02.2024. This notice was issued in form GST DRC-13, invoking Section 79(1)(c) read with Rule 145(1) of the TNGST Act, 2017.

Core Contentions of the Assessee