Ashwani Kumar Panday vs. State Of U.P. Thru. Prin. Secy. Deptt. State Tax Lko. And 2 Others

Held

The Court held that proceedings cannot be initiated against a deceased person. The determination of tax, interest, or penalty cannot be made against a dead individual. While Section 93 of the Act deals with the liability of legal representatives in cases where the business is continued or discontinued after the proprietor's death, it does not authorize determination against a deceased person. The Court found that for the provisions concerning the liability of a legal representative to apply, 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 notice and the impugned order were passed against the deceased without issuing notice to the legal heirs, they could not be sustained. The Court quashed the impugned order dated July 24, 2023, with liberty to the respondent authorities to proceed against the petitioner in accordance with law, if so advised.

Facts

The petitioner, son of the deceased proprietor of M/S Pandey Iron Dealer, Mr. Ram Prasad Pandey, filed a writ petition challenging an order dated July 24, 2023, passed by Respondent No. 3. The order, issued under Section 73 of the U.P. GST Act, 2017, demanded Rs. 1,58,40,238.77 (Tax, Interest, and Penalty) against the deceased. Mr. Ram Prasad Pandey died on February 6, 2021. The petitioner's father's GST registration was cancelled on June 27, 2023, after an application for cancellation was sent on April 14, 2022. Despite the authorities having knowledge of the death, a show cause notice was issued on February 19, 2022, and an ex parte order was passed subsequently. The petitioner argued that the proceedings were initiated against a deceased person and that the show cause notice and order were not known to the legal heirs as they were uploaded on the portal.

Key Issues

1. Whether proceedings under Section 73 of the U.P. GST Act, 2017, can be initiated and an order determined against a deceased person without issuing a show cause notice to the legal representative? (Question of law) Petitioner's arguments: The petitioner contended that the show cause notice and the impugned order were bad in law as they were passed against a deceased person. They argued that since information regarding the death of Mr. Ram Prasad Pandey was provided to the authorities, the initiation of proceedings was illegal. The petitioner relied on the Division Bench judgment in Amit Kumar Sethia (Deceased) vs. State of U.P. and another, which held that determination cannot be made against a dead person and that the legal representative must be issued a show cause notice. Revenue's arguments: The judgment does not record any specific arguments made by the respondent revenue.