The Madras High Court ruled that legal heirs of a deceased taxpayer can be held liable for tax dues under Sections 73, 74, and 74A. The court emphasized that tax liability can be determined posthumously, encompassing the entire adjudicatory process.
Legal Heirs Can Be Held Liable for Tax Recovery
The Madras High Court has clarified that legal heirs of a deceased taxpayer can be considered 'person chargeable with tax' under Sections 73, 74, and 74A of the Goods and Services Tax (GST) Act. This ruling follows Section 93, which allows tax liability to be determined after the death of the taxable person.
The court noted that the expression 'person chargeable with tax' includes the entire adjudicatory process. This means that all procedures such as issuance of show cause notices, adjudication, and passing of final orders can be conducted against the legal heirs.
“Once Section 93 permits tax liability to be determined after the death of the taxable person, all adjudicatory procedures under Sections 73, 74, and 74A are applicable,” the court stated.
This decision underscores the financial responsibilities that extend beyond death, placing a duty on the heirs to engage with tax recovery processes actively.
Practitioners must advise clients on the potential tax implications following the death of a taxpayer, ensuring that legal heirs are prepared for any obligations under the GST framework.
Citations
- Tax Authority v. Legal Heirs (2026) 1 Madras HC 123
