Tax Recovery notice against Dead Person is invalid: Madras HC quashes proceedings against Wife of Deceased [Read Order]

The Madras High Court has quashed proceedings initiated by the Tamil Nadu Value Added Tax department for Tax recovery against the wife of a dealer who died during the course of pendency of writ petition. Justice T S Sivagnanam, while allowing the writ petition, held that the notice is not sustainable in law as the same was issued against a dead person.

The VAT department raised a demand on the dealer, one Mr.V. Raju – the husband of the petitioner. The dealer challenged the demand notice before the High Court. However, both the counsel and the dealer died during the course of the proceedings and the writ petition was dismissed by the Court for non-prosecution. Subsequently, the department-initiated recovery proceedings against the wife of the assessee. The petitioner approached the High Court for relief.

The bench noted that the writ petition filed by Mr. Raju was dismissed for non-prosecution. “Thus, the grounds raised by the assessee in the said writ petition were never adjudicated. The dealer, in the said writ petition, contended that he did only labour works for building body of lorries and that the same could not be stated to be a manufacturing process nor there was an element of sale involved. Thus, without adjudicating the said issue, the second respondent cannot proceed to recover the amount, that too, by issuing a notice against a dead person. Hence, the impugned notice is held to be not sustainable in law.”