M/S Harjeet Saree Centre vs. State Of U.P. And Another
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The petitioner, Prabhdeep Singh, son of the deceased Trilochan Singh, filed a writ petition challenging three orders dated 26.04.2024, 13.08.2024, and 25.02.2025, passed under Section 73(9) of the Goods and Services Tax Act, 2017. These orders raised demands totaling Rs. 1,30,525, Rs. 3,03,055, and Rs. 3,76,641 against the deceased Trilochan Singh. The petitioner's primary contention is that Trilochan Singh died on 23.04.2021, and the GST registration of his proprietorship firm, M/s Harjeet Saree Centre, was cancelled effective from that date. Despite the department's awareness of the death and cancellation, show cause notices were issued in the name of the deceased under Section 73 of the Act. These notices, uploaded on the portal after registration cancellation, remained unanswered, leading to the impugned orders.
Held
The Court held that while Section 93 of the Goods and Services Tax Act, 2017, deals with the liability of legal representatives for tax, interest, or penalty due from a deceased person, it does not authorize the determination of such liabilities against a deceased person directly. The provision addresses the continuation or discontinuation of business and the subsequent liability of the legal representative or the estate. However, it does not permit the initiation of proceedings or the passing of orders against a dead individual. The Court reasoned that for the provisions concerning the liability of a legal representative to be invoked, it is essential that the legal representative is issued a show cause notice and their response is sought before any determination is made. Since the show cause notices and the subsequent determination were made against the deceased Trilochan Singh without notifying his legal representative, the proceedings were unsustainable. Consequently, the impugned orders were quashed and set aside.
Key Issues
1. Whether proceedings for determination of tax, interest, or penalty under Section 73 of the Goods and Services Tax Act, 2017, can be initiated and concluded against a deceased person after the cancellation of their GST registration, without issuing notice to the legal representative? (Question of law) Petitioner's arguments: The petitioner argued that since the department was aware of Trilochan Singh's death and the cancellation of the firm's GST registration, issuing show cause notices in the name of the deceased was improper. The proceedings conducted against a deceased person are void ab initio and thus liable to be quashed. Respondent's arguments: The respondent supported the impugned orders by relying on Section 93 of the Act, contending that recovery can be made from legal representatives even if the determination is made after the proprietor's death.
Sections Cited
Section 73, Section 93
AI-generated summary — verify with the full judgment below
Neutral Citation No. - 2025:AHC:142526-DB Court No. - 3 Case :- WRIT TAX No. - 3951 of 2025 Petitioner :- M/S Harjeet Saree Centre Respondent :- State of U.P. and Another Counsel for Petitioner :- Shubham Agrawal Counsel for Respondent :- C.S.C. Hon'ble Shekhar B. Saraf,J. Hon'ble Praveen Kumar Giri,J.
This petition is directed against orders dated 26.04.2024, 13.08.2024 and 25.02.2025 passed under Section 73(9) of the Goods and Services Tax Act, 2017 (for short 'the Act') wherein a demand of Rs.1,30,525, 3,03,055 and 3,76,641 has been raised in the name of Trilochan Singh.
The petitioner Prabhdeep Singh son of deceased Trilochan Singh has filed the petition inter alia with the submissions that Trilochan Singh had died on 23.04.2021 and on account of his death, the GST registration of the proprietorship firm M/s Harjeet Saree Centre, which was in the name of deceased Trilochan Singh, was cancelled with effect from 23.04.2021 by order dated 03.08.2021. Whereafter show cause notices dated 20.12.2023, 20.05.2024 and 25.11.2024 were issued in the name of deceased Trilochan Singh 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 26.04.2024, 13.08.2024 and 25.02.2025 raising demand against the deceased.
Submissions have been made that once the Department was well aware of the fact that Trilochan Singh, 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 as the proceedings have been conducted in the name of the deceased Trilochan Singh, the same are void ab initio and, therefore, the order impugned deserves to be quashed and set aside.
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 26.04.2024, 13.08.2024 and 25.02.2025 (Annexure-1 to the writ petition) are quashed and set aside. The respondents would be free to take appropriate proceedings in accordance with law. Order Date :- 20.8.2025 K.K. Maurya (Praveen Kumar Giri, J.) (Shekhar B. Saraf, J.) KAMLESH KUMAR MAURYA High Court of Judicature at Allahabad
Reproduced from the public record of the Allahabad High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.