M/S Delhi Up Road Line vs. State Of U.P. And Another

This petition is directed against orders dated 25.08.2024 and 24.02.2025 passed under Section 73(9) of the Goods and Services Tax Act, 2017 (for short 'the Act') wherein a demand of Rs. 67,48,970/-, Rs. 57,17,140/- and Rs. 92,98,084/- has been raised in the name of Satish Kumar.

The petitioner Kanwal Gandhi son of deceased Satish Kumar has filed the petition inter alia with the submissions that Satish Kumar had died on 29.04.2021 and on account of his death, the GST registration of the proprietorship firm M/s Delhi U.P. Road Line, which was in the name of deceased Satish Kumar, was cancelled with effect from 02.03.2021 by order dated 02.03.2021. Whereafter show cause notices dated 05.01.2024, 29,05.2024 and 24.11.2024 were issued in the name of deceased Satish Kumar under Section 73 of the Act. However, as the same were uploaded on the portal and the GST registration had already been cancelled, there was no occasion for the petitioner to have accessed the said portal, the show cause notices remained unanswered which resulted in passing of the orders dated 25.08.2024 and 24.02.2025 raising demand against the deceased.

Submissions have been made that once the Department was well aware of the fact that Satish Kumar, proprietor of the firm has already died and the registration of the firm has already been cancelled, there was no occasion for issuing a show cause notice in the name of the deceased and Versus Counsel for Petitioner(s) : Shubham Agrawal Counsel for Respondent(s) : C.S.C., Dhananjay Awasthi M/S Delhi Up Road Line .....Petitioner(s) State of U.P. and Another .....Respondent(s)

Learned counsel for the respondents supported the order impugned with the aid of provisions of Section 93 of the Act. Submissions have been made that under the provisions of Section 93, the recovery can be made from the legal representatives even after the determination has been made after the death of the proprietor of the firm.

We have considered the submissions made by counsel for the parties and have perused the material available on record.

Undisputed facts are that the show cause notices, reminders and determination of tax have been made after the death of the proprietor of the firm. Provisions of Section 93 of the Act, insofar as relevant, reads as under:

Special provisions regarding liability to pay tax, interest or penalty in certain cases: (1) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016 (31 of 2016), where a person, liable to pay tax, interest or penalty under this Act, dies, then - (a) if a business carried on by the person is continued after his death by his legal representative or any other person, such legal representative or other person, shall be liable to pay tax, interest or penalty due from such person under this Act; and (b) if the business carried on by the person is discontinued, whether before or after his death, his legal representative shall be liable to pay, out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax, interest or penalty due from such person under this Act, whether such tax, interest or penalty has been determined before his death but has remained unpaid or is determined after his death."

A perusal of the above provision would reveal that the same only deals with the liability to pay tax, interest or penalty in a case where the business is continued after the death, by the legal representative or where the business is discontinued, however, the provision does not deal with the fact as to whether the determination at all can take place against a deceased person and the said provision cannot and does not authorise the determination to be made against a dead person and recovery thereof from the legal representative.

Once the provision deals with the liability of a legal representative on account of death of the proprietor of the firm, it is sine qua non that the legal representative is issued a show cause notice and after seeking response from the legal representative, the determination should take place.

In view thereof, the determination made in the present case wherein the show cause notices were issued and the determination was made against the dead person without issuing notice to the legal representative, cannot be sustained.

Consequently, the writ petition is allowed. The orders dated 25.08.2024 and 24.02.2025 are quashed and set aside. The respondents would be free to take appropriate proceedings in accordance with law. September 22, 2025 K.K. Maurya (Praveen Kumar Giri,J.) (Shekhar B. Saraf,J.) KAMLESH KUMAR MAURYA High Court of Judicature at Allahabad