Chotu Devi Vs Union of India (Rajasthan High Court)
The Rajasthan High Court considered a writ petition filed by Chotu Devi, wife and legal heir of late Hansa Ram Choudhary, sole proprietor of M/s Shri Satguru Marbles Industry. Hansa Ram Choudhary died on 30.12.2025. GST proceedings had resulted in demands of ₹8,22,310, ₹1,57,600 and ₹12,29,041 towards tax, along with corresponding interest and penalties. An order under Section 74 of the CGST/RGST Act was passed on 31.12.2025, one day after his death, followed by an Order-in-Original dated 26.03.2026. The petitioner alleged that she was neither issued notice nor impleaded in the proceedings nor given an opportunity of hearing.
The petitioner contended that the proprietorship concern had no separate legal existence from its proprietor and that the orders were void and non est as they were passed against a deceased person, besides violating Sections 75(4) and 75(6) of the CGST Act. The respondents relied upon Section 93 of the CGST Act, submitting that tax, interest or penalty could be recovered from legal representatives even after the assessee’s death.
The High Court held that the petitioner could not claim immunity from tax liability, if any, because Section 93(1)(b) expressly provides that where a business is discontinued due to the death of the person liable, the legal representative is liable to discharge the tax, interest or penalty from the estate of the deceased, to the extent the estate can meet the charge. However, the Court held that Section 93 is subject to the requirements of Section 75. Section 75(4) requires an opportunity of hearing where an adverse decision is contemplated, while Section 75(6) requires the proper officer to set out the relevant facts and basis of the decision.
The Court noted that the petitioner, as legal heir, had not been issued an independent notice before the Assessment Order. It further observed that the impugned order also appeared to fall foul of Section 75(6). Since the legal representative was entitled to be heard, the Court held that the assessment could proceed only after compliance with the statutory hearing and reasoned-order requirements.
Accordingly, the writ petition was allowed. The order under Section 74 dated 31.12.2025 and the Order-in-Original dated 26.03.2026 were quashed and set aside. The respondents were granted liberty to issue notice to the petitioner and pass fresh orders after affording her an opportunity of hearing in accordance with law. Pending applications, including the stay petition, were also disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. The petitioner, wife and legal heir of late Shri Hansa Ram Choudhary, has approached this Court assailing the orders passed against the deceased proprietor (late Shri Hansa Ram Choudhary) of M/s Shri Satguru Marbles Industry, who expired on 30.12.2025. The impugned orders include order dated 31.12.2025 passed under Section 74 of the CGST/RGST Act and Order-in-Original dated 26.03.2026 passed under the CGST Act, 2017.
2. Succinctly speaking, the relevant facts of the case, shorn of the unnecessary details, are as follows:-
2.1 The proceedings relate to orders passed under the provisions of the CGST/RGST Act, 2017, whereby tax demands, along with applicable interest and penalties, were raised against late Shri Hansa Ram Choudhary, who was the sole proprietor of M/s Shri Satguru Marbles Industry who expired on 30.12.2025. The said orders include orders dated 31.12.2025 passed under Section 74 of the CGST/RGST Act and Order-in-Original dated 26.03.2026 passed under the CGST Act, 2017. 2.2 Under the aforesaid orders, demands were raised towards tax, interest and penalties, including demands of ₹8,22,310/-, ₹1,57,600/-and ₹12,29,041/- towards tax, along with corresponding penalties as provided under the relevant provisions of the CGST/RGST Act.
2.3 Allegedly, no notice was issued to Mrs. Chotu Devi, the legal heir of the deceased proprietor, nor was she impleaded in the proceedings or afforded any opportunity of hearing before the passing of the impugned orders.
2.4 Hence, this instant writ petition.
3. Learned counsel for the petitioner submits that M/s Shree Satguru Marble Industry was a sole proprietorship concern of late Shri Hansa Ram Choudhary and had no independent legal existence separate from its proprietor. He contends that upon the demise of the sole proprietor, the proprietorship concern ceased to have any separate juristic existence. Therefore, the impugned orders passed against the said concern are liable to be set aside.
3.1 Learned counsel for the petitioner would vehemently argue that the impugned orders dated 31.12.2025 and orders dated 26.03.2026 are void ab initio and is non est and is passed against a dead person in violation of the mandatory provisions of Section 75(4) and 75(6) of the CGST Act.
3.2 Since no hearing was afforded either to the wife of the petitioner or to the petitioner, it is contended that such denial has resulted in a one-sided application of mind by the Assessing Officer, without any independent consideration of the petitioner’s case. It is submitted that had an opportunity of hearing been granted, the petitioner would have had a fair chance to put forth his defence and contest the alleged tax liability.
4. Ms. Mahi Yadav, learned Additional Advocate General appearing on advance service while opposing the petition states that under Section 93 of the Central Goods and Service Tax, 2017 (hereinafter referred to as the ‘CGST Act’) even after the death of the assessee, the tax liability is recoverable from legal representatives.
5. 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.”
6. 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.
7. 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. –
xxxx xxxx xxxx
(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.
xxxx xxxx xxxx
(6) The proper officer, in his order, shall set out the relevant facts and the basis of his decision.”
8. 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.
9. The conceded fact in the instant case is that the petitioner, being the legal heir, was not issued any independent notice prior to the passing of the Assessment Order. The husband of the petitioner died on 30.12.2025, and the order under Section 74 was passed on 31.12.2025 and Order-in-Original was passed thereafter, on 26.03.2026.
10. Even otherwise, impugned order seems to fall foul of the requirement mandated under Section 75 (6), ibid.
11. In the premise, since the petitioner is the legal representative of the deceased assessee, being his wife, as already held hereinabove, he is entitled to be heard, and the Assessment Order ought to have been passed only after the Assessment Officer had set out all the relevant facts and disclosed the basis of his decision.
12. Accordingly, the writ petition is allowed, order under Section 74 dated 31.12.2025 and Order-in-Original dated 26.03.2026 are quashed and set aside, with liberty to the respondents to issue a notice to the petitioner and proceed to pass fresh orders after affording an opportunity of hearing, in accordance with law.
13. All pending application(s) including stay petition stand disposed of.
