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

Held

The Court held that the determination made against the deceased proprietor 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 for tax, interest, or penalty due from a deceased person, it does not authorize the initiation or conclusion of determination proceedings against a dead person. The Court reasoned that for Section 93 to be applicable, it is essential that the legal representative be issued a show cause notice and their response be sought before any determination is made. Since the show cause notice and the subsequent determination were made against the deceased without involving the legal representative, the proceedings were vitiated. The Court quashed the impugned order dated February 25, 2025. The respondents were granted liberty 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 November 30, 2024, was issued under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017, in the name of the deceased. This notice was uploaded on the portal, but the petitioner, unaware of it, could not respond. Consequently, an order dated February 25, 2025, was passed, raising a demand of Rs. 1,60,356.80/- against the deceased. The petitioner contends that since the department was aware of the proprietor's death and the firm's registration cancellation, the proceedings and order against a deceased person are void ab initio.

Key Issues

1. Whether proceedings for determination of tax, interest, or penalty under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017, can be initiated and concluded against a deceased person without issuing a show cause notice to their legal representative? Petitioner's arguments: The petitioner argued that the proceedings conducted in the name of the deceased, Shahid Faizan Ahmad, after his death, are void ab initio. They contended that the department was aware of the proprietor's death and the cancellation of the firm's registration, making it improper to pass an order against a deceased individual. The petitioner asserted that a show cause notice should have been issued to the legal representative. Respondent's arguments: The respondents supported the impugned order by relying on Section 93 of the Act. They argued that under Section 93, recovery can be made from legal representatives even if the determination occurs after the proprietor's death.