The Bombay High Court ruled that GST dues of a deceased person cannot be recovered from a legal heir without proper adjudication, notice, and proof of business continuation. The case involved Navin Vishwanathan, who ran a separate business under the same trade name as his deceased father but with a different GST registration and location. Authorities attempted to recover GST dues from his father by freezing Navin's bank account without issuing a notice or conducting a hearing.
The Court underscored that separate GST registrations indicate independent taxable entities, and a similar trade name does not imply business continuity. It highlighted that liability under Section 93 must be properly determined before proceeding with recovery actions. The Court noted that recovery under Section 79 requires an already established liability, which was not the case here, as no proceedings were initiated to determine Navin's legal liability as a successor.
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The Court emphasized that freezing a bank account without issuing a show cause notice violates principles of natural justice and Article 300A, as it deprives an individual of property without due process. It further stated that coercive measures like account attachment must be based on concrete evidence and proper satisfaction, rather than assumptions based on shared trade names. The Court's decision reinforces the need for adherence to legal procedures and protection of property rights in recovery actions.
Order Date - 15 April 2026
Parties : Navin Vishwanathan (Proprietor of M/s Oriental Facility) Vs State of Maharashtra & Others
Facts -
- Navin Vishwanathan, after his father’s death, ran a separate proprietorship business under the same trade name but with a different GST registration and location.
- The department raised huge GST dues against his deceased father and initially attached the father’s bank account, which was later released.
- Almost a year later, authorities directly froze the petitioner’s bank account to recover the father’s dues without issuing any notice or hearing.
- The petitioner objected, stating his business was separate, but no action was taken—forcing him to approach the High Court.
Issue -
- Whether GST authorities can recover dues of a deceased person from a legal heir by attaching their bank account without prior adjudication or notice?
Order -
- The Court held that separate GST registrations create independent taxable persons, and mere similarity in trade name does not establish continuity of business. Liability under Section 93 must be properly determined first.
- It emphasized that recovery under Section 79 presupposes an already determined liability. Here, no proceedings were initiated to establish whether the petitioner was legally liable as a successor.
- The Court strongly noted that freezing a bank account without issuing a show cause notice violates principles of natural justice and Article 300A, as it deprives a person of property without due process.
- Relying on settled law, the Court observed that coercive powers like attachment are drastic and must be based on tangible material and proper satisfaction, not assumptions such as shared trade names.
