Order Passed Against Deceased Person is Nullity – Legal Perspective on GST Proceedings
Introduction
The Kerala High Court recently quashed an order passed under the Central Goods and Services Tax Act, 2017 (“CGST Act”) against a deceased person in the case of Benoy Abraham vs. State Tax Officer, Nedumangadu (2024). The judgment reaffirms the legal principle that an order passed against a deceased individual is null and void. It also highlights the specific provisions of the CGST Act governing tax liabilities upon the death of a registered dealer.
Case Overview
The petitioner, Mr. Benoy Abraham, challenged an order passed against his late mother, Mrs. Santhamma T, a registered GST dealer who passed away on June 8, 2021. Despite being informed of her death and provided with her death certificate, the State Tax Officer issued the order in her name. This prompted Mr. Abraham to file a writ petition, contending that such an order is a legal nullity.
Legal Issue
Is an order issued in the name of a deceased GST dealer valid?
The primary legal question was whether tax authorities could pass an order against a deceased individual, given that the CGST Act allows proceedings to continue against legal heirs but does not authorize such actions directly against a deceased person. GST Registration
Court’s Observations and Ruling
The Kerala High Court ruled in favor of the petitioner, quashing the order and deeming it a nullity. Key observations included:
- Nullity of Orders Against Deceased Persons:
The court observed that while Section 93 of the CGST Act permits the continuation of proceedings against legal heirs, it does not authorize proceedings or their culmination in the name of a deceased person. Therefore, such an order lacks legal standing. - Provisions of Section 93 of the CGST Act:
- If a deceased person’s business is continued, legal representatives or any other person operating the business are liable for tax obligations.
- If the business is discontinued, the legal representatives are liable to pay tax, interest, or penalties to the extent the deceased’s estate can bear the charge.
- Directions for Future Proceedings:
The court allowed the tax authorities to resume proceedings against the legal heirs, with notices issued to the petitioner, who held power of attorney for other heirs. - Alignment with Previous Judgments:
The court aligned its ruling with the Madras High Court’s judgment in Rekha S. & Ors. vs. Assistant Commissioner (ST), Chennai (2023), where a similar GST assessment order against a deceased person was set aside.
Implications of the Judgment
- For Legal Heirs:
Legal heirs must be aware of their responsibilities under Section 93 of the CGST Act. While they are liable for tax dues, any proceedings initiated in the name of a deceased individual are invalid and can be challenged in court. - For Tax Authorities:
Tax authorities must ensure due diligence when issuing orders involving deceased taxpayers. Orders must target the legal heirs or representatives and not the deceased person to avoid legal challenges. - Broader Legal Precedent:
This judgment reinforces the principle that actions against deceased individuals are non-est (legally nonexistent). This ruling could influence similar cases and clarify procedural requirements under the CGST Act. GST Filing - Practical Compliance for Businesses:
Businesses and legal representatives must notify tax authorities promptly about a taxpayer’s demise and ensure compliance with notices to avoid disputes.
The Kerala High Court’s judgment in Benoy Abraham vs. State Tax Officer underscores the importance of adherence to procedural law under the CGST Act. By quashing the order against a deceased individual, the court highlighted the need for proper issuance of notices and proceedings directed at legal heirs. This ruling sets a precedent for future cases, ensuring fairness and legal clarity in GST-related proceedings involving deceased persons.
