Ashwani Kumar Pandey 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. It was observed that while Section 93 of the Act deals with the liability of legal representatives for tax, interest, or penalty due from a deceased person, it does not authorize determination to be made against a dead person. The Court emphasized that for the determination of liability against the estate of a deceased proprietor, it is essential to issue a show cause notice to the legal representative and seek their response. Since the show cause notice and the impugned order were passed against the deceased without issuing notice to the legal heir, the proceedings were held to be bad in law. Consequently, the show cause notice dated May 21, 2024, and the impugned order dated August 21, 2024, were quashed and set aside. The respondent authorities were granted liberty 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, filed a writ petition challenging an order dated April 24, 2024, passed by Respondent No. 3 under Sections 50 and 122 of the U.P. GST Act, 2017. The demand of Rs. 55,42,604.52 was raised against the deceased proprietor, Ram Prasad Panday, for the tax period April 2018 to March 2019. The proprietor died on February 6, 2021. His GST registration was cancelled on June 27, 2023, after an application by his counsel. Despite knowledge of the death and cancellation, a show cause notice dated May 21, 2024, and an ex-parte order dated August 21, 2024, were issued under Section 74 of the Act. These were uploaded on the portal and not known to the legal heirs. The petitioner's mother had also expired.

Key Issues

1. Whether the show cause notice and consequential order passed under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017, against a deceased person, without issuing notice to the legal representative, are sustainable in law? The petitioner argued that the proceedings were initiated against a deceased person, which is bad in law. They contended that since information regarding the death was provided to the authorities, the initiation of the show cause notice was illegal. The petitioner relied on the Division Bench judgment in Amit Kumar Sethia (Deceased) vs. State of U.P. and another, arguing that determination cannot be made against a dead person and recovery cannot be sought from legal representatives without proper notice to them. The respondent (State) did not record any specific arguments in the judgment.