Deputy Commissioner Vs Khurshid Bibi (Jammu & Kashmir High Court)
The Jammu & Kashmir High Court has dismissed a review petition filed by the Deputy Commissioner of State Taxes, reaffirming its earlier decision to invalidate a tax demand order against a deceased taxpayer. The case, Deputy Commissioner v. Khurshid Bibi, centered on a demand and recovery notice issued to a deceased individual. The tax department had previously issued a show-cause notice, a reminder, and a recovery notice, all addressed to a person who had already passed away. The initial writ petition filed by the legal heirs, including Khurshid Bibi, successfully argued that these notices and the subsequent demand order were invalid because they were issued to a dead person without hearing the legal heirs, a clear violation of the principles of natural justice.
The tax department filed the review petition, arguing that the court had not explicitly quashed the final demand order issued under Section 74 of the J&K GST/CGST Act, 2017, and that only the initial notices were set aside. The department believed this omission allowed them to proceed with the recovery. The High Court, after reviewing the matter, rejected this argument. It clarified that when a show-cause notice is quashed for non-compliance with the principles of natural justice, all subsequent proceedings that stem from that notice, including the final demand order, are automatically “vitiated and shall be deemed to have been quashed.” The court reiterated that the entire process was flawed from its inception because the foundational notices were issued to a deceased person.
