Facts of the Case:
In this case, the petitioner challenged the attachment of his bank account by the GST authorities under Section 79(1)(c) read with Section 93(1)(a) of the CGST Act, 2017 for recovery of alleged tax dues of his deceased father. The petitioner’s father was carrying on a proprietorship business under the name “M/s. Oriental Facility” and had outstanding GST liabilities determined post his death.
The petitioner, however, had independently commenced his own proprietorship business prior to his father’s demise, albeit under the same trade name, but with a separate GST registration and from a different place of business.
Despite this distinction, the Department issued Form GST DRC-13 to the petitioner’s banker and froze his account without issuing any show cause notice or adjudicating his liability under Section 93. The petitioner contended that he was a separate taxable person and that liability of his deceased father could not be fastened upon him without due process of law.
Issue:
Whether the GST Department can directly invoke recovery proceedings under Section 79 of the CGST Act and attach the bank account of a legal heir, without first determining his liability under Section 93 and without issuing a show cause notice or granting an opportunity of hearing?
Held that:
The Court observed that although Section 79 provides wide powers for recovery, such powers can be exercised only after the liability against the person is duly determined.
In the present case, no adjudication was undertaken to establish whether the petitioner was liable under Section 93 as a legal heir or as a person continuing the business of the deceased. The Court emphasized that such liability cannot be presumed merely on the basis of similarity in trade name, particularly when the petitioner held a separate GST registration and operated from a distinct place of business.
It was further held that coercive recovery measures like bank attachment cannot precede adjudication and must comply with principles of natural justice, including issuance of notice and opportunity of hearing. The action of freezing the bank account was also held to be violative of Article 300A of the Constitution, as it deprived the petitioner of his property without due process.
The Court held that the impugned action of the GST Department in attaching the petitioner’s bank account under Section 79 of the CGST Act was unsustainable in law, without jurisdiction, and violative of principles of natural justice, and accordingly quashed the same.
Case Name: Navin Vishwanathan Prop. of M/s. Oriental Facility Versus State of Maharashtra and Ors. dated 15.04.2026
To read the complete judgment 2026 Taxo.online 935
