Case Law Details
Lrs of Krishan Lal Vs Union of India (Rajasthan High Court)
The petitioners, who are legal representatives (LRs) of late Shri Krishan Lal, challenged an Assessment Order dated 29.08.2024 issued by the Assistant Commissioner, State Tax, Sri Ganganagar, raising a demand of unpaid tax for Financial Year 2019–2020. The demand related to business activities carried out by the deceased, who had operated as sole proprietor of M/s Krishan Lal Khet Pal (GSTIN 08ABDPL1259L1ZH). The deceased had passed away on 25.05.2022.
The petitioners stated that the GST registration of the proprietorship was cancelled retrospectively with effect from 30.09.2022 through an order dated 13.10.2022. It was alleged that this cancellation was done without following due process and without granting an opportunity of personal hearing.
Subsequently, a show cause notice dated 17.05.2024 in Form GST DRC-01 was issued by the Joint Commissioner, State Tax, Sri Ganganagar, under Sections 50 and 73(1) of the CGST/RGST Act for Financial Year 2019–20. The notice called upon the deceased to make payment within 30 days. The petitioners contended that the notice was not in the prescribed format and was issued without providing an opportunity of personal hearing.
Thereafter, a demand order dated 29.08.2024 was passed in the name of the deceased. The petitioners challenged this order on the ground that it violated Section 75(4) of the CGST Act, which mandates that a personal hearing must be granted where an adverse decision is contemplated.
The petitioners relied on a previous judgment dated 10.02.2026 in a similar case (Hitesh Patel vs. State of Rajasthan & Ors.), where the Court dealt with the issue of tax liability in cases involving deceased assessees and their legal representatives. In that earlier decision, the Court referred to Section 93 of the CGST Act, which provides that where a person liable to pay tax dies, the legal representative may become liable depending on whether the business is continued or discontinued.
It was noted that under Section 93(1)(b), where the business is discontinued due to death of the assessee, the legal representative is liable to pay tax, interest, or penalty out of the estate of the deceased, to the extent the estate is capable of meeting such liability, whether the liability was determined before or after death.
However, the Court clarified that Section 93 is subject to Section 75 of the CGST Act, which requires compliance with procedural safeguards. Section 75(4) mandates that an opportunity of hearing must be provided where an adverse decision is contemplated or upon request, and Section 75(6) requires that orders must be reasoned and must clearly set out relevant facts and the basis of the decision.
The earlier judgment emphasized that assessment proceedings against legal representatives of a deceased assessee would be vitiated if statutory requirements under Section 75(4) and Section 75(6) are not complied with.
In the present case, the respondent did not oppose the submissions made by the petitioners and stated that the matter could be disposed of in terms of the earlier judgment. The Court accordingly disposed of the writ petition in line with the earlier decision.
It was also recorded that the petitioners were not pressing other statutory challenges in the present proceedings, but were granted liberty to raise and pursue them in appropriate future proceedings, if required. Those issues were kept open for adjudication.
All pending applications, including stay petitions, were also disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. Petitioners herein, LRs of the deceased-assessee i.e. late Shri Krishan Lal are before this Court assailing an Assessment Order dated 29.08.2024 passed by the respondent No.3-Assistant Commissioner, State Tax, Ward-1, Circle-A, Sri Ganganagar, wherein demand of unpaid tax for the Financial Year i.e. 2019-2020, respectively has been raised qua the business activities being carried out by late Shri Krishan Lal.
2. Succinctly speaking, the relevant facts of the case, shorn of the unnecessary details, are as follows:-
2.1. Late Shri Krishan Lal (hereinafter referred to as “the deceased”) was operating as sole proprietor of M/s Krishan lal Khet Pal (GSTIN 08ABDPL1259L1ZH). The deceased passed away on 25.05.2022. The GST registration of the proprietorship was cancelled retrospectively w.e.f. 30.09.2022 vide order dated 13.10.2022, allegedly without adherence to due process and without affording an opportunity of personal hearing.
2.2. Thereafter, the Joint Commissioner, State Tax, Sri Ganganagar, issued a show cause notice dated 17.05.2024 in Form GST DRC-01 under Sections 50 & 73(1) of the CGST/RGST Act for FY 2019-20, calling upon the deceased to make payment within 30 days. According to the petitioners, notice was neither in the prescribed format nor accompanied by any opportunity of personal hearing.
2.3. Thereafter, a demand order dated 29.08.2024 was passed in the name of the deceased, allegedly in breach of Section 75(4) of the CGST Act, which mandates the grant of a personal hearing.
3. Hence, this instant writ petition.
4. Learned counsel for the petitioners cites an order dated 10.02.2026 passed by this Court in a similar case of Hitesh Patel vs. State of Rajasthan & Ors.1. He submits that this Court had an occasion to deal with the same controversy, where no opportunity of hearing was granted to the LRs of the deceased. Relevant of the order, ibid, is as under:-
“7. Having heard the rival contention of the parties and upon perusal of the record, we are of the view that the petitioner cannot claim immunity from the tax liability, if any, in view of Section 93 of CGST Act, relevant of which is reproduced hereinunder:-
“Section 93. Special provisions regarding liability to pay tax, interest or penalty in certain cases.-
(1) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016 (31 of 2016), where a person, liable to pay tax, interest or penalty under this Act, dies, then-
(a) if a business carried on by the person is continued after his death by his legal representative or any other person, such legal representative or other person, shall be liable to pay tax, interest or penalty due from such person under this Act; and
(b) if the business carried on by the person is discontinued, whether before or after his death, his legal representative shall be liable to pay, out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax, interest or penalty due from such person under this Act, whether such tax, interest or penalty has been determined before his death but has remained unpaid or is determined after his death.”
8. In light of the aforesaid legal position, it is clear that Section 93(1)(b) of the CGST Act expressly provides that where tax liability is sought to be recovered qua a business that has been discontinued due to the death of the assessee, the legal representative shall be liable to discharge such liability out of the estate of the deceased.
9. However, Section 93, supra, is subject to the caveat contained in Section 75 of the CGST Act, which mandates that any person upon whom tax liability is proposed to be imposed must be afforded an opportunity of personal hearing, and that any order passed pursuant thereto must be a reasoned and speaking order. For ready reference same is reproduced as under:-
“75 General provisions relating to determination of tax. –
(4) An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.
(6) The proper officer, in his order, shall set out the relevant facts and the basis of his decision.”
10. Trite it may sound that the assessment proceedings which are initiated and are to be enforced against the person who are the heirs/LRs of the deceased assessee would be vitiated in the absence of compliance of the statutory provisions contained under Section 75(4) and (6) of the CGST Act, ibid.”
5. On a Court query, learned counsel for the respondent does not oppose the aforesaid submission and states that he has no objection in case the instant petition is also disposed of in same terms.
6. Accordingly, the writ petition is disposed of in terms of the judgment,
7. Before parting, we may also hasten to add that other challenge in the writ petition qua the statutory provisions and in view of the aforesaid order passed by this Court, learned counsel for the petitioner submits that the said challenge is not being pressed in the present matter, with liberty to raise and pursue the same in appropriate proceedings. Same is accordingly kept open to be adjudicated in future, should the occasion so arise.
8. All pending application(s) including stay petition stand disposed of.
Note:
1 DB CWP NO. 3078/2026
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