Legal Question in Tax Law in India

My friend's father had obtained two separate licenses under shops and establishment act. He started business at three locations. He did not apply for registration for Professional tax and even not paid the tax till date of his death.

Now my friend becomes an owner of the shop as he is the only legal heir. When he approach for the registration for Professional tax the authority has asked him to produce the details of registration made by his father. As mentioned earlier my friend's father did not register for professional tax and not even paid during his life.

The professional tax authorities also told my friend that his father has not registered his business under professional tax act and not paid the tax. Due to this he is liable to pay the all recovery and penalties as per the provisions of professional tax rules.

When my friend asked why I have to pay the recovery of tax and penalties, the authorities have replied that any due recovery or penalty of a business can be recovered from the new owner.

Giving the justification the authorities further clarified the reason for tax liability on legal hears that when legal heir is having right on deceased's properties/assets he is also responsible for the payments of dues/liabilities of the deceased.

My friend is in depression thinking about huge amount of probable penalty.

Sirs, Please reply on my below questions.

1. Can Professional Tax Authority recover this type of recovery from new owner?

2. What are options left available with my friend ?

Asked on 5/14/13, 7:10 pm

3 Answers from Attorneys

Rohini Kumar Tenneti R.K.1080 LEGAL SERVICES

The PT authorities have claimed rightfully and your friend is liable to pay all the taxes and penalties as applicable according to law.

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Answered on 5/14/13, 11:27 pm

Jeevesh Mehta (Advocate) (Ph Maven Legal- Advocates & Consultants

Yes the tax can be recovered from the new owner being the legal hear.

Your friend must proceed with the help of a lawyer and file proper submissions or appeals so that the liability may be waived or proper calculation can be done.


Jeevesh Mehta

Taxation Advisory Expert.

Ph: 09811617186

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Answered on 5/15/13, 1:42 am
Jayesh Desai Jayesh Desai

Legal heir is liable to pay the tax for the estate which he received, having said that, consult a local lawyer, who may be able to help you in reducing the liability or penalty, interest etc. Also he can look into the angle of limitation, as to - to what extent the limitation would apply and to what extent it will not apply.

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Answered on 5/16/13, 5:11 am

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