Assessment Order Against Deceased Person Without Hearing Legal Heirs Invalid: Rajasthan High Court

The Rajasthan High Court on 26 February, held that assessment proceedings cannot be validly continued or concluded against the legal heirs of a deceased taxpayer under Section 93 of the CGST Act, which limits liability to the estate inherited, unless the authorities comply with mandatory principles of natural justice, including issuance of a proper notice and grant of an opportunity of hearing to the legal representative.

A Bench of Acting Chief Justice Sanjeev Prakash Sharma and Justice Baljinder Singh Sandhu found that the assessment order against Late Shri Bhagwan Lal Dangi, in which his son and legal representative Hitesh Patel was affected, failed to adequately set out the factual foundation and reasoning supporting the decision.

The Bench held:

"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."

The case arose from a writ petition filed by Hitesh Patel, challenging an assessment order passed after the death of his father.

Lt. Bhagwan Lal Dangi, a PWD contractor operating as a sole proprietor under Patel Enterprises, passed away on 10 June 2025, while the assessment order was issued subsequently on 10 July 2025.

The father's GST registration had been retrospectively cancelled with effect from 31 March 2018. Despite this, the State of Rajasthan, through the Commercial Tax Department, issued a show-cause notice and proceeded with the assessment in the name of Late Bhagwan Lal Dangi.

Hitesh Patel had apprised the Department of his father's death and informed them that the business was not being continued by any legal heir, but the Department, including the Assistant Commissioner (SGST) and Joint Commissioner of State Tax, ignored this notice and proceeded with the assessment and recovery proceedings.

Despite the death of Bhagwan Lal Dangi, and the prior attachment of his estate during the pendency of the proceedings, the Department did not issue any independent notice to Hitesh Patel before finalising the assessment.

Hitesh Patel contended that he was never put to notice nor afforded any opportunity to explain or contest the proposed assessment, even though the order entailed adverse civil consequences. It was further argued that the impugned order did not properly disclose the relevant facts or the basis on which the liability was determined.

The High Court observed that assessment proceedings enforced against legal heirs stand vitiated if statutory safeguards and basic principles of fairness are ignored. It noted that under Section 93(1)(b) of the CGST Act, a legal representative can be made liable for the deceased's tax dues only to the extent of the estate inherited, and not in a personal capacity.

Holding that the assessment had been completed in violation of mandatory procedural requirements and principles of natural justice, the High Court quashed and set aside the assessment order. It further directed Hitesh Patel to maintain status quo regarding the estate of his father until fresh proceedings are completed.

The Bench stated:

"In the premise, since the petitioner is the legal representative of the deceased, being his son, 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."

The Court granted liberty to the tax authorities, including the Executive Magistrate-cum-Tehsildar, to initiate fresh proceedings by issuing a lawful notice to Hitesh Patel and clarified that any liability determined thereafter would be recoverable only from the estate of Late Shri Bhagwan Lal Dangi and not personally from his son.

Accordingly, the High Court disposed of the case.

For Petitioner: Advocate, Prateek Gattani

For Respondent: AAG, Mahaveer Bishnoi and Advocate, Kuldeep Vaishnav