Divikolu Subba Rao vs. The State Of Andhra Pradesh

Held

The Court held that any proceedings for recovery of tax dues pursuant to an order of assessment passed against a dead person are unsustainable, as the assessment order itself is not a valid order in the eyes of law. The Court referred to a coordinate bench's decision in W.P.No.6029 of 2025, which clarified that while Section 93 of the GST Act allows recovery of dues from the business or estate of a deceased person, assessment proceedings cannot be initiated against a deceased person. The Court also noted a Division Bench decision concerning the A.P.V.A.T. Act, which provided for continuation of proceedings against legal representatives. However, in the present case, no notices were issued to the petitioners before the impugned letter was addressed to the Joint Sub-Registrar. Therefore, the communication regarding alleged tax arrears of a dead person was contrary to the legal position and violative of principles of natural justice. The Court reiterated that the Assessment Order dated 29.10.2019 was of no legal consequence as it was passed against a dead person. Consequently, the letter dated 19.01.2026 was set aside. The Court granted liberty to the assessing authority to conduct fresh assessment proceedings after giving due notice and an opportunity of hearing to the petitioners and other Class-I heirs of the deceased.

Facts

The petitioners, sons of the deceased Mr. Divikolu Ramaiah, approached the Joint Sub-Registrar (5th respondent) to dispose of their property. They were informed that a charge was created in favour of the Commercial Tax Department due to alleged tax arrears of Rs. 5,62,497/- for the period 2017-18, as per a letter dated 19.01.2026 from the Assistant Commissioner GST (4th respondent). The letter requested the Joint Sub-Registrar not to alienate the properties and to list them under the 22-A category. The petitioners' father had operated a granite business under the name 'M/s. Parameswara Granites' and died on 23.04.2018. The petitioners contended that they had informed the authorities of their father's death, and the business registration was cancelled accordingly. They also submitted that the properties were registered in their names and other family members' names prior to the business registration, and that recovery proceedings against a dead person eight years after his death were barred by limitation. They further argued that the impugned letter violated principles of natural justice as no prior notice was issued to them.

Key Issues

1. Whether proceedings for recovery of tax dues can be initiated against a deceased person when the assessment order was passed after his death, and if so, whether such proceedings are sustainable in law, particularly concerning the attachment of immovable properties belonging to the legal heirs? (Section 93 of the GST Act, principles of natural justice). Petitioner's arguments: The petitioners argued that initiating recovery proceedings against a dead person, especially when the assessment order was passed after his death, is unjust, arbitrary, and contrary to law. They contended that recovery of tax dues eight years after the taxpayer's death is barred by limitation. Furthermore, they asserted that as the properties were registered in their names, the respondent authorities should have issued prior notice, and the attachment/prohibition on alienation affects their rights. They claimed the impugned letter violates the principles of natural justice and their constitutional rights. Respondent's arguments: The learned Assistant Government Pleader argued that an assessment order dated 29.10.2019 was passed against 'M/s. Parameswara Granites' and was not challenged by the petitioners. They relied on a Division Bench decision in W.P.Nos.3177 and 3145 of 2022, dated 08.10.2025, which held that the department can continue recovery proceedings for tax liabilities of deceased taxpayers against their legal heirs. They conceded that appropriate orders could be passed in view of the legal position.