Facts of the Case:

In this case, the Whether, in terms of Section 93 of the CGST Act, 2017, the GST authorities can initiate fresh assessment proceedings under Sections 73, 74 or 74A against the legal heir of a deceased proprietor after his death, where no proceedings had been initiated during his lifetime and the business had already been discontinued. The deceased proprietor permanently discontinued the business and the GST registration was cancelled with effect from 31.12.2019. Several years later, in 2025, the department initiated proceedings by issuing a communication, followed by Form GST DRC-01A and a show cause notice alleging non-filing of returns relating to certain e-way bills for FY 2018-19.

The petitioner consistently contended that she had neither continued the business nor participated in its affairs after her husband’s death and that no proceedings had been initiated during his lifetime. Despite these objections, the adjudicating authority passed an order under Section 74 confirming tax liability of ₹3,42,355 along with interest and penalty, leading to the present writ petition.

The petitioner argued that Section 93 of the CGST Act, which deals with liability of legal representatives, could apply only where proceedings had already been initiated during the lifetime of the deceased taxable person and remained pending. According to the petitioner, fresh assessment proceedings could not be initiated against legal heirs after the death of the proprietor where the business had been discontinued. The Revenue, however, contended that Section 93 expressly permits determination of tax liability even after the death of the taxable person and authorises recovery from the legal representative to the extent of the inherited estate.

Issue:

Whether in terms of Section 93 of the CGST Act, 2017, the GST authorities can initiate fresh assessment proceedings under Sections 73, 74 or 74A against the legal heir of a deceased proprietor after his death, where no proceedings had been initiated during his lifetime and the business had already been discontinued.

Held that:

The High Court dismissed the writ petition and upheld the validity of the proceedings initiated against the legal heir. The Court held that Section 93 of the CGST Act expressly authorises determination of tax, interest and penalty even after the death of a taxable person, and such determination necessarily includes the entire adjudicatory process, including issuance of show cause notices and passing of assessment orders. The Court rejected the petitioner’s contention that Section 93 applies only to pending proceedings initiated during the lifetime of the deceased. It observed that the phrase “determined after his death” occurring in Section 93 must be given its plain and natural meaning and cannot be artificially restricted by reading limitations into the statute.

The Court further held that the expression “person chargeable with tax” under Section 74 is wider than the expression “taxable person” defined under Section 2(107) and includes any person upon whom the Act imposes liability, including legal representatives where Section 93 creates such statutory liability. Relying upon the principles of statutory interpretation reiterated by the Supreme Court in the Safari Retreats judgment, the Court observed that taxing statutes must be interpreted according to their plain language without importing restrictions based on equitable considerations.

Consequently, it held that fresh proceedings under Sections 73, 74 or 74A can be initiated against legal heirs even if no proceedings had commenced during the lifetime of the deceased, provided that in cases where the business has been discontinued, the liability of the legal heir remains confined to the extent of the estate inherited by him or her.

Case Name: V. Damayanti, W/o. Late V. Vasudevan (Proprietor, M/s. Vasu Chemicals) Versus The Superintendent of GST and Central Excise, Madurai dated 16.06.2026

To read the complete judgement 2026 Taxo.online 1725