S Anand Sathya vs. The Superintendent Of CGST And Central Excise

Facts

The petitioner, S. Anand Sathya, challenged three orders: an order dated 22.03.2024 passed by the Superintendent of CGST and Central Excise, and two demand orders dated 26.04.2024 and 01.05.2024 passed by the Superintendent and Assistant Commissioner respectively. The petitioner's contention is that these orders pertain to business liabilities of his deceased father, who passed away on 08.02.2023. The petitioner claims he has not taken over his father's business. Crucially, the ASMT-10 notice, a precursor to these orders, was also issued after the father's death. The petitioner sought to quash these impugned orders.

Held

The Court allowed the writ petition, quashing the impugned orders. The Court noted that the petitioner may be liable as a legal representative under Section 93 of the CGST Act, 2017. However, it observed that a similar writ petition filed by the same petitioner for a different period (July 2017 to March 2018) was disposed of on 05.06.2024, where the impugned order was quashed and the matter was remitted back to the respondent. In that prior case, the Court directed the respondent to serve the notice to the petitioner, treat the quashed order as an addendum, allow the petitioner to reply, and pass fresh orders after hearing the petitioner. Following this precedent, the Court saw no reason to deviate and allowed the present writ petition on similar terms. The ratio is that when tax demands pertain to a deceased individual and notices are issued post-demise, and the legal heir has not taken over the business, the matter should be remitted for fresh consideration after providing proper opportunity to the heir to defend the liability, especially if a precedent exists for such remittance.

Key Issues

1. Whether the impugned orders, issued in respect of tax liabilities of the petitioner's deceased father, are liable to be quashed, considering the petitioner has not taken over the business and the notices were issued post-demise? (Question of law and fact, turning on principles of successor liability and procedural fairness under GST law). The petitioner argued that since he has not taken over his father's business, he cannot be held liable for the tax demands. He further contended that the issuance of notices after his father's death vitiates the proceedings. The respondents (Revenue) did not record any specific arguments in the judgment.