1997 (8) TMI 463 - HC - VAT and Sales Tax

Summary

Issues:
1. Liability of legal representatives for tax recovery from deceased assessee.
2. Validity of demand notice served upon deceased assessee and continuation of recovery proceedings against legal representatives.

Issue 1: Liability of legal representatives for tax recovery from deceased assessee

The judgment addresses the essentiality of ascertaining the legal representatives of a deceased assessee and the estate in their possession before initiating tax recovery proceedings against them. The court refers to Section 16 of the Act, which deems the executor, administrator, or legal representative of a deceased dealer as liable for tax payment to the extent of the assets of the deceased in their possession. The liability of legal representatives is limited to the estate left by the deceased. The court emphasizes that the assessing authority must determine the legal representatives and the extent of the estate before initiating recovery proceedings. A Division Bench decision is cited to support the requirement of proper notice and opportunity for legal representatives before recovery actions can be taken. The judgment highlights that recovery proceedings against legal representatives without such determination are tentative and unsustainable.

Issue 2: Validity of demand notice served upon deceased assessee and continuation of recovery proceedings against legal representatives

The judgment discusses the necessity of issuing a fresh demand notice against legal representatives before initiating recovery proceedings following the death of an assessee. It cites a single Bench decision stating that demand notices served upon a deceased assessee abate upon death. The court emphasizes that proceedings against legal representatives cannot continue without issuing a notice of demand to them. The judgment points out that no demand notice was issued to the petitioner before recovery proceedings were initiated. It highlights that a demand notice can only be validly issued after determining the extent of the legal representative's liability based on the estate in their possession. The court quashes the impugned notices and instructs the assessing authority to identify the legal representatives and determine their liability before initiating fresh recovery proceedings with proper demand notices.

In conclusion, the judgment clarifies the legal principles governing the liability of legal representatives for tax recovery from a deceased assessee and emphasizes the importance of proper determination and notice before initiating recovery proceedings.