Sambul Shahid@Sambal Shahid vs. State Of U.P. Thru. Prin. Secy. Tax And Registration Lko. And Another

Held

The Court held that the determination of tax, interest, or penalty made against a deceased person without issuing a show cause notice to the legal representative cannot be sustained. While Section 93 of the Act deals with the liability of legal representatives to pay tax, interest, or penalty after the death of the proprietor, it does not authorize the determination of such liabilities against a dead person. The Court reasoned 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 subsequent determination were made against the deceased without notifying the legal representative, the impugned order is unsustainable. The Court quashed and set aside the order dated April 20, 2024, and permitted the respondents to take appropriate proceedings in accordance with the law.

Facts

The petitioner, Sambul Shahid, is the wife of the deceased Shahid Faizan Ahmad. Shahid Faizan Ahmad died on April 26, 2021. A show cause notice dated December 27, 2021, was issued under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017, in the name of the deceased. As the notice was uploaded on the portal and the petitioner could not access it, it remained unanswered. Consequently, an order dated April 20, 2024, was passed, raising a demand of Rs. 14,27,995.49 against the deceased. The petitioner contends that the proceedings conducted in the name of a deceased person are void ab initio, especially since the department was aware of his death and the firm's registration had been cancelled.

Key Issues

1. Whether the determination of tax, interest, or penalty under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017, can be made against a deceased person when the proceedings are initiated after their death? (Question of law) Petitioner's arguments: The petitioner argued that once the department was aware of the proprietor's death and the cancellation of the firm's registration, any order passed in the name of the deceased is void ab initio. The proceedings conducted against a dead person are invalid. Respondent's arguments: The respondents supported the impugned order, relying on Section 93 of the Act. They contended that recovery can be made from legal representatives even if the determination is made after the death of the proprietor.