Rishi Shangari vs. Union Of INDIA Through The Principal Commissioner Central Goods And Service Tax (CGST)

Held

The Court held that the impugned order dated 28.11.2022, passed by the Assistant Commissioner (CGST), Jamshedpur, is perverse and based on no evidence. The Court noted that the petitioner's father died on 13.02.2018, and the petitioner obtained a fresh GST registration in his own name on 24.03.2018. The Court found no material evidence on record to support the finding that the petitioner was continuing the business of his father's proprietary concern after his father's death. Therefore, the Court concluded that the impugned order, which sought to hold the petitioner liable as a legal representative under Section 93(1)(a) of the CGST Act, 2017, could not be sustained. The ratio decidendi is that a legal representative cannot be held liable for the GST dues of a deceased person's firm without cogent evidence demonstrating that the legal representative continued the business of the deceased's firm after their death, especially when the legal representative has obtained a separate registration. The Court allowed the writ petition and set aside the impugned order.

Facts

The petitioner, Rishi Shangari, filed a writ petition challenging an order dated 28.11.2022 passed by the Assistant Commissioner (CGST), Jamshedpur (Respondent No. 3). The petitioner's deceased father, Navtej Kumar Shangari, had obtained a GST registration in the name of M/s. N. Kumar and Company, effective from 01.07.2017. The father died on 13.02.2018. Subsequently, the petitioner obtained a fresh GST registration on 24.03.2018 in the same proprietary concern's name. Orders under GST DRC-07 were passed on 20.12.2022 for tax periods April 2018 to March 2019 and April 2019 to March 2020, concerning the petitioner's father. A summons under Section 70 was issued to the deceased father for non-payment of GST, to which the petitioner replied, providing the death certificate and stating that proceedings against a dead person are invalid. The impugned order dated 28.11.2022, passed by Respondent No. 3, held the petitioner liable as a legal representative for the GST dues, interest, and penalty of his father's firm, citing Section 93(1)(a) of the CGST Act, 2017.

Key Issues

1. Whether the impugned order dated 28.11.2022, passed by the Assistant Commissioner (CGST), Jamshedpur, holding the petitioner liable for the GST dues, interest, and penalty of his deceased father's firm, is sustainable in law, particularly in light of Section 93(1)(a) of the CGST Act, 2017? Petitioner's Arguments: The petitioner contended that the impugned order is perverse and based on no evidence. He argued that his father died on 13.02.2018, and proceedings cannot be initiated against a deceased person. He further argued that he had obtained a fresh registration in his own name on 24.03.2018, and there was no material to establish that he was continuing the business of his father's proprietary concern after his father's death. Revenue's Arguments: The revenue contended, through the impugned order, that as per Section 93(1)(a) of the CGST Act, 2017, if a business is carried on by a legal representative after the death of a person, the legal representative would be liable to pay tax, interest, or penalty. However, the judgment does not explicitly record detailed arguments from the revenue beyond what is reflected in the impugned order.