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

Held

The Court held that the determination made against the 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 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 involving the legal heir, the impugned order dated 21.08.2024 was quashed and set aside. The respondents were granted liberty to take appropriate proceedings in accordance with law.

Facts

The petitioner, Sambul Shahid, is the legal heir of the deceased Shahid Faizan Ahmad. A show cause notice dated 29.05.2024 was issued under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017, in the name of the deceased Shahid Faizan Ahmad. The petitioner submits that the deceased had died on 26.04.2021, and the firm's registration was cancelled. The show cause notice was uploaded on the portal, but the petitioner, being unaware, could not access it and thus did not respond. This led to the passing of an order dated 21.08.2024, raising a demand of Rs. 55,77,828/- against the deceased. The petitioner contends that proceedings conducted in the name of a deceased person are void ab initio.

Key Issues

1. Whether a 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 after their death, without issuing a show cause notice to their legal representative? (Question of law) The petitioner argued that the proceedings were initiated and concluded against a deceased person, making the entire process void ab initio. They contended that once the department was aware of the proprietor's death and the firm's registration cancellation, no order could be passed in the deceased's name. The petitioner relied on the principle that legal proceedings must be conducted against living individuals or their legal representatives. The respondents, supporting the impugned order, relied on Section 93 of the Act. They argued that under Section 93, recovery can be made from legal representatives even if the determination is made after the proprietor's death.