High Court Held GST Authorities Can Initiate Fresh Proceedings Against Legal Heirs Even After Taxpayer’s Death

The Madras High Court has held that even where the business of a deceased taxpayer has been discontinued and no show cause notice or assessment proceedings have been initiated during his lifetime, fresh proceedings under Sections 73, 74 or 74A of the CGST Act can be initiated against the legal heir under Section 93 of the Act.

The petitioner, V. Damayanti, wife of the late V. Vasudevan, is the proprietor of M/s Vasu Chemicals and challenged the Order dated 11 December 2025 passed under Section 74 of the Central Goods and Services Tax Act, 2017. Her husband, who was engaged in the business of supplying industrial soaps and polishes, passed away on 05 March 2019, following which the business was discontinued and the GST registration was cancelled with effect from December 2019. In March 2025, the petitioner received communications from the GST Department alleging non-filing of returns in respect of certain e-way bills of the financial year 2018-19. Thereafter, notices in Form DRC-01A and DRC-01 were issued. The Petitioner explained that she had neither continued nor participated in the business after her husband’s death; the department determined a tax liability of Rs 3,42,355 and also imposed interest and a penalty.

Aggrieved by the order, the petitioner approached the High Court seeking the quashing of the proceedings.

The petitioner contended that Section 93 of the CGST Act should be read in harmony with Section 74. It was argued that before the determination of any liability, notice must necessarily be issued to the “person chargeable with tax,” and since no proceedings had been initiated during the lifetime of the deceased, fresh proceedings could not be commenced against his legal heirs.

The Revenue argued that Section 93 of the CGST Act specifically provides for liability of legal heirs and expressly provides situations where tax, interest or penalty is determined after the death of the taxable person. It was submitted that the statutory framework under the CGST Act differs from that under the Income Tax Act and authorises recovery from legal representatives even where the business has been discontinued.

The Court held that the expression “person chargeable with tax” used in Section 74 is wider than the expression “taxable person” and includes every person on whom the statute casts liability, including legal heirs. The Court further held that once Section 93 authorises determination of liability even after the death of the taxable person, the entire process, including the issuance of show cause notices and other steps under Sections 73, 74 and 74A, would be covered within its ambit.

Accordingly, the Court dismissed the writ petition and upheld the validity of the proceedings initiated by the GST authorities, while clarifying that recovery from the legal heir would be limited to the value of the inherited estate.