S. Anand Sathya Vs Superintendent of CGST and Central Excise
Date: July 3, 2024
Subject Matter
Taxpayer could be held accountable only if they took over the business from his/her dead father
Summary
In the case, the petitioner challenged two orders (dated 22.03.2024 and the demand orders dated 26.04.2024 and 01.05.2024) concerning tax demands due from the petitioner's father, who passed away on 08.02.2023. The petitioner argued that because he did not take over his father's business, he should not be held liable for the tax demands. The court acknowledged the implications of Section 93 of the CGST Act, which can attribute tax liability to a legal representative. The petitioner had previously filed a similar writ petition for the assessment year 2017-18, which led to a ruling on 05.06.2024 that quashed an impugned order pertaining to that case and remitted it for new orders based on merits. Following this precedent, the court quashed the impugned orders in the current case as well, allowing the petitioner an opportunity to respond to a show cause notice within two months, while directing the respondent to issue a fresh order within three months thereafter. The decision emphasized the need for a proper hearing for the petitioner regarding the tax liability.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
In this case, the petitioner has challenged the impugned order, dated 22.03.2024 and the consequential demand order, dated 26.04.2024 and 01.05.2024.
2. The case of the petitioner is that the impugned order has been passed in respect of the demand due and payable by the petitioner’s father in the business that was carried out by the petitioner’s father who died on 08.02.2023. It is further submitted that even the ASMT-10 notice, dated 09.03.2023 is after the death of the petitioner’s father.
3. The learned counsel for the petitioner would submit that the petitioner has not taken over the business of the petitioner’s father (Late) Mr. Sathianesan and therefore, the impugned order is liable to be quashed.
4. It is noticed that as a legal representative, the petitioner may be liable to be taxed in terms of Section 93 of the CGST Act, 2017. A similar writ petition was also filed by this petitioner in W.P(MD)No.11646 of 2024 for the assessment year 2017-18 and an order came to be passed on 05.06.2024. The said writ petition was disposed of on the following terms:
“6. Having considered the submissions of the learned counsel for the petitioner and the learned Senior Standing Counsel for the respondent, the Court is of the view that this is a fit case for quashing the impugned order and remitting back the case to the respondent to pass fresh orders on merits and in accordance with law as admittedly the demand pertains to July 2017 to March 2018 and the impugned order has been passed after the death of the petitioner’s father. Since the petitioner may be liable to be taxed as legal representative/heir of his father in terms of under Section 93 of the respective GST enactments, the Court is of the view that the petitioner should be given a proper opportunity to defend the tax liability.
7. Under these circumstances, the impugned order is quashed and the matter is remitted back to the respondent to pass fresh orders on merits and in accordance with law.
8. The respondent is directed to serve a copy of the notice that preceded the impugned order dated 04.05.2023 to the petitioner within a period of 30 days from the date of receipt of a copy of this order. The impugned order, which stands quashed, shall be treated as addendum to the show cause notice to be furnished which formed the basis of the impugned order.
9. It is expected that the petitioner will reply the show cause notice within a period of two months from the date of receipt of the show cause notice. The respondent shall, thereafter, endeavour to pass a fresh orders on merits and in accordance with law as expeditiously as possible preferably within a period of three months thereafter. Needless to state, the petitioner shall be heard. The petitioner shall co-operate with the respondent.”
Since already under similar circumstances for the aforesaid assessment year, order has been set aside, I see no reason to take a different view.
5. Therefore, this writ petition is allowed in terms of the above decision. No costs. Consequently, connected Miscellaneous Petition is closed.