Soni Jaiswal vs. Union Of INDIA And Ors.

Held

The Court held that a proceeding cannot be initiated against a dead person. Once the CGST Authority was informed that the proprietor of M/s. National Plumbing House, the registered taxpayer, had expired, it was incumbent upon the authority to drop the said proceeding. Instead, the authority should have reinitiated a fresh proceeding by issuing a new show-cause notice in the name of the legal representative(s) of the deceased registered taxpayer, in accordance with the law. Since this was not done, the proceedings could not be sustained. Consequently, the show-cause notice dated August 5, 2024, the order in original dated January 31, 2025, and the consequential recovery notice dated May 28, 2025, were set aside. The Court clarified that this order does not prevent the CGST Authority from re-initiating fresh proceedings against the legal representative(s) of the deceased taxpayer strictly in accordance with law, and that the petitioner would not be entitled to challenge such fresh proceedings on the ground of limitation unless she would have been entitled to do so on the date the original show-cause notice was issued.

Facts

The petitioner, Soni Jaiswal, assailed an order in original dated January 31, 2025, passed by the Superintendent, CGST & CX, Kolkata North Commissionerate, and a consequential recovery notice dated May 28, 2025. A show-cause notice dated August 5, 2024, was initially issued in the name of M/s. National Plumbing House, a proprietorship concern whose proprietor was Paritosh Jaiswal, the petitioner's deceased husband. The petitioner informed the CGST Authority that her husband had passed away on June 3, 2020. Despite this, the authority proceeded to pass the order in original in the name of the deceased. The petitioner contended that proceedings initiated against a dead person are non est.

Key Issues

1. Whether proceedings under the GST law can be validly initiated and continued against a deceased person, specifically a proprietorship concern whose proprietor has expired, turning on the principles of natural justice and the procedural requirements of the CGST Act. Petitioner's contention: The petitioner argued that once the CGST Authority was notified of the proprietor's death, any proceedings initiated against him were non est (void ab initio) and could not be sustained. The petitioner relied on the principle that legal proceedings cannot be continued against a deceased individual. Revenue's contention: The CGST Authority, represented by Mr. Banerjee, attempted to defend the order, though the specific arguments are not detailed beyond stating he "tried his best to defend the indefensible."