Madras HC Upholds GST Demand Despite Proprietor’s Death; Permits Appeal Against Liability u/s 93

The Madras High Court has recently confirmed the GST demand issued against the deceased proprietor of a company. However, the court gave another chance to the company to file an appeal.

The proprietor of the company, Vairam Agencies Vodafone Cell, passed away on 02.09.2017. After his death, the manager was directed to wind up the business, but the manager still continued to run the business. Due to this, the tax liability was issued in the name of the deceased owner.

There were also inward supplies of Rs 3,45,38,823.81, made by Vodafone to the company till 31.03.2018. The tax department raised a GST demand of Rs 34,19,364 (CGST) and Rs 34,19,364 (SGST) and issued an assessment order on 05.02.2025.

The son of the owner argued that the time for filing the annual return was extended up to 05.02.2020, and as per Section 74(10) of the GST Act, the time period for issuing the order expired on 04.02.2025. He also contended that the tax demand was raised against a deceased person, which is wrong.

The court observed that the order was passed within the limitation period as the last date would be 05.02.2025, and the order was made on that date. The court also observed that the petitioner was given sufficient opportunity to respond. A notice was served by RPAD and uploaded to the GST portal as well. The court observed Section 93 of the GST Act, under which the petitioner was liable for the tax demand.

Therefore, the court did not cancel the order but gave liberty to the petitioner to file an appeal under Section 107 of the GST Act within 30 days. The court held that if the appeal is filed with the mandatory pre-deposit, the Appellate Authority must hear it on merit and decide within 3 months.