HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT JAMMU WP (C) No. 3026/2024 1. Khurshid Bibi, Age 65 years, W/o Late Wali Mohd 2. Yaqoob Khan, Age 47 years, S/o Late Wali Mohd 3. Mahomood Khan, Age 40 years, S/o Late Wali Mohd 4. Nishad Akhter, Age 35 years, D/o Wali Mohd All residents of W. No. 6, Bari Brahmana, District Samba. .....Applicant(s)/Petitioner(s) Through :- Mr. Surjeet Singh Andotra, Advocate v/s 1. Union of India through Secretary, Department of Revenue, Ministry of Finance, North Block, New Delhi-110001. 2. Assistant/Deputy Commissioner, State Taxes Department (Recovery), Jammu. 3. State Taxes Officer, Circle Q-Jammu, J&K. 4. Tehsildar (Assistant Collector 1st Class), Bari Brahmana, Samba. .....Respondent(s) Through :- Mrs. Monika Kohli, Sr. AAG CORAM: HON’BLE MR. JUSTICE SANJEEV KUMAR, JUDGE HON’BLE MR. JUSTICE PUNEET GUPTA, JUDGE ORDER 24.03.2025 1. Impugned in this petition, filed by the petitioners, is a show cause notice dated 31.07.2024 issued by State Taxes Officer, Circle Q- Jammu, J&K [“STO”], whereby the predecessor-in-interest of the petitioners late Wali Mohd was asked to submit reply by or before 30.08.2024. He was also given option of personal hearing. The Sr. No. 04 2 WP (C) No. 3026/2024 impugned show cause notice was followed by a reminder issued by STO on 26.09.2024 addressed to late Wali Mohd 2. The impugned notice, followed by the reminder aforesaid, is challenged by the petitioners primarily on the ground that the same were issued to a dead person and therefore, nullity in the eye of law. 3. It is argued by learned counsel for the petitioners that the assessee Wali Mohd died on 22.07.2019, as is borne out from the death certificate issued by Dayanand Medical College & Hospital, Ludhiana, Punjab dated 03.08.2019. 4. It is thus argued that in the absence of any show cause notice and right of hearing to the petitioners, who are legal heirs of late Wali Mohd, no liability of GST for the financial year 2017-18 could be fastened upon them. 5. Per contra, the stand of the respondents, as could be culled out from the objections filed by the STO on behalf of Respondent No. 2 to 4, is that during the scrutiny of returns filed by the assessee Wali Mohd, for the financial year 2017-18, it came to fore that there was some variance/difference between the returns GSTR-1 and GSTR-3B. Accordingly, a statutory notice under Section 74 of the J&K GST Act, 2017 was issued on 02.01.2021. The notice was conveyed to the taxpayer on his registered e-mail id with mobile number through GST portal. Since, no reply was filed by the assessee Wali Mohd, as such, a show cause notice was issued to him on 03.09.2022 along with summary of show cause notice dated 03.09.2022 in terms of Section 74 of the Act of 2017. 3 WP (C) No. 3026/2024 6. It is thus submitted that after putting the assessee on notice and having received no response from him, the demand was confirmed and the recovery proceedings initiated. 7. Having heard learned counsel for the parties and pursued the material available on record, we are of the considered opinion that no recoveries could be made in respect of the demand raised with respect to financial year 2017-18 against the petitioners. The petitioners, who were never heard by the STO before confirming the demand, cannot be held liable to discharge the tax liability in terms of Section 93 of the Act of 2017 which their predecessor-in-interest incurred during his lifetime. 8. Indisputably, the return for the relevant year stood accepted by the respondents. It is only on scrutiny it was found that there was some variance between the returns GSTR-1 and GSTR-3B. This necessitated the issuance of statutory notice under Section 74 of the Act of 2017. 9. As per the own admission of the respondents, the statutory notice in terms of Section 74 of the Act of 2017 was issued for the first time on 02.01.2021. This notice was admittedly issued to the assessee Wali Mohd who, as has come on record, died on 22.07.2019. All notices issued after his death could not have been expected to have been received by him either in person or through e-mails sent by the respondents. The STO confirmed the demand only on the ground that there was no response by the assessee/tax payer to the statutory notice dated 02.01.2021 issued under Section 74 of the Act of 2017. 4 WP (C) No. 3026/2024 10. It also comes out from the undisputed pleadings on record that a show cause notice was issued on 03.09.2022 along with summary of show cause notice which the respondents claims to have served upon the deceased tax payer on his registered e-mail id. When nothing was heard from the deceased, the impugned show cause notice came to be issued on 31.07.2024 followed by reminder dated 26.09.2024. Possibly, it had not been brought to the notice of the STO concerned that the tax payer Wali Mohd had died and therefore, could not have responded to any of the notices or communications of the department. 11. Be that as it may, the demand came to be confirmed and notice of recovery dated 19.08.2024 came to be issued by the Tehsildar, Assistant Collector 1st Class, Bari Brahmana against the petitioners. The petitioners are rightly aggrieved and are before us to challenge the entire proceedings initiated by STO, after the return of the deceased Wali Mohd was picked up on scrutiny, which was followed by statutory notice in terms of Section 74 of the Act of 2017. 12. Once it is not in dispute that Wali Mohd had died on 22.07.2019, it was incumbent upon the respondents to issue statutory notice in terms of Section 74 of the Act of 2017 to the petitioners, who are admittedly the legal heirs of the deceased Wali Mohd, and provide them an adequate opportunity of being heard before raising or confirming any demand. This, however, did not happen. The entire proceedings after the scrutiny till the issuance of the recovery notice are therefore vitiated for the non compliance of the principles of natural justice. 13. We need not advert to Section 93 of the Act of 2017 which clearly prescribes that where a person liable to pay tax, interest or penalty 5 WP (C) No. 3026/2024 under the Act of 2017 dies, the recoveries of the tax can be made from his legal representatives or any other person as provided under Section 93 of the Act of 2017. The legal position enumerated in Section 93 is not in dispute, however, the proceedings which were undertaken by the STO upon scrutiny of the return filed by the tax payer Wali Mohd for the financial year 2017-18 and the proceedings that followed thereafter culminating into issuance of impugned notice of recovery against the petitioners are vitiated in law and cannot be sustained. Being the legal heirs of assessee late Wali Mohd, the petitioners were entitled to contest the notice issued by STO under Section 74 of the Act of 2017 more particularly when the assessee was not in this world to contest the proceedings. 14. For the forgoing reasons, we allow this writ petition and quash the show cause notice dated 31.07.2024 followed by reminder dated 26.09.2024 and recovery notice dated 19.08.2024. 15. The respondents, however, are at liberty to take the proceedings afresh from the stage, the return filed by deceased Wali Mohd was picked up for scrutiny and pass appropriate orders that may be required under law after complying with the principles of natural justice implicit in the scheme of the Act. 16. Disposed of along with connected application(s), if any. (Puneet Gupta) (Sanjeev Kumar) Judge Judge JAMMU 24.03.2025 Manan Whether the order is speaking : Yes Whether the order is reportable : Yes Manan Mahajan 2025.03.26 17:15 I attest to the accuracy and integrity of this document