Sambul Shahid Legal Heir Of Lt. Shahid Faizan Ahmad vs. State Of U.P. Thru. Prin. Secy. Tax And Registration And Another

Held

The Court held that the determination of tax, interest, or penalty 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 for tax, interest, or penalty due from a deceased person, it does not authorize the determination of such dues against a dead person. The Court reasoned that for the provisions of Section 93 to be effective, 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 determination order were made against the deceased without notice to the legal heir, the proceedings were vitiated. The Court quashed and set aside the order dated December 29, 2023, and allowed the respondents to take appropriate proceedings in accordance with the law.

Facts

The petitioner, Sambul Shahid, is the legal heir of the deceased Shahid Faizan Ahmad. Shahid Faizan Ahmad died on April 26, 2021. A show cause notice was issued on September 15, 2023, 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 December 29, 2023, was passed, raising a demand of Rs. 17,05,913.89 against the deceased. The petitioner argued that since the department was aware of the proprietor's death and the firm's registration cancellation, the proceedings against the deceased were void ab initio.

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) 2. Whether the provisions of Section 93 of the Act authorize the determination of tax, interest, or penalty against a deceased person without issuing a show cause notice to their legal representative? (Question of law) Petitioner's arguments: The petitioner contended that the show cause notice and subsequent order were passed against a deceased person, making the proceedings void ab initio. They argued that the department was aware of the death and the cancellation of the firm's registration. The petitioner asserted that the proceedings should have been initiated against the legal representative, not the deceased. Respondent's arguments: The respondents supported the impugned order with the aid of Section 93 of the Act, arguing that recovery can be made from legal representatives even after the determination is made after the death of the proprietor.