M/S Tanishk Enterprises vs. State Of Uttar Pradeh And Another
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The petitioner, Shivani Kesarwani, is the legal representative of her deceased husband, Dharmendra Kesarwani, who was the proprietor of M/s Tanishk Enterprises. Dharmendra Kesarwani died on August 30, 2023. A show cause notice was issued on December 6, 2023, under Section 73 of the Goods and Services Tax Act, 2017, in the name of the deceased. The petitioner claims she did not access the portal where the notice was uploaded, resulting in an ex-parte order dated March 4, 2024, being passed under Section 73(9) of the Act, raising a demand of Rs. 1,58,113.20 against the deceased. The petitioner seeks to set aside this order.
Held
The Court held that while Section 93 of the Goods and Services Tax Act, 2017, deals with the liability of legal representatives to pay tax, interest, or penalty due from a deceased person, it does not authorize the determination of tax liability against a deceased person. The provision addresses the continuation of business or discontinuation thereof and the consequent liability of the legal representative out of the deceased's estate. However, it does not permit the initial determination to be made against a dead person. The Court reasoned that for the provision concerning the liability of a legal representative to be effective, it is essential that the legal representative be issued a show cause notice and their response be considered before any determination is made. Therefore, a determination made against a deceased person without issuing a show cause notice to the legal representative cannot be sustained. The Court quashed and set aside the impugned order dated March 4, 2024, allowing the respondents to take appropriate proceedings in accordance with the law.
Key Issues
1. Whether a determination under Section 73(9) of the Goods and Services Tax Act, 2017, can be made against a deceased person without issuing a show cause notice to their legal representative? The petitioner argued that the show cause notice and the subsequent order were passed against a deceased person without proper notice to her as the legal representative. She contended that since the proprietor had passed away, the proceedings should have been initiated or continued against her, the legal representative, after due notice. The respondents supported the impugned order, relying on Section 93 of the Act. They argued that Section 93 permits recovery from legal representatives even after the determination has been made after the death of the proprietor, implying that the determination itself could proceed against the deceased.
Sections Cited
Section 73, Section 73(9), Section 93
AI-generated summary — verify with the full judgment below
Neutral Citation No. - 2025:AHC:81693-DB Chief Justice's Court Case :- WRIT TAX No. - 2322 of 2025 Petitioner :- M/s Tanishk Enterprises Respondent :- State of Uttar Pradesh and another Counsel for Petitioner :- Jai Prakash Narain Shukla, Pranjal Shukla Counsel for Respondent :- C.S.C., Ankur Agarwal (S.C.) Hon'ble Arun Bhansali,Chief Justice Hon'ble Kshitij Shailendra,J.
This petition is directed against ex-parte order dated 04.03.2024 passed under Section 73(9) of the Goods and Services Tax Act, 2017 (for short 'the Act') wherein a demand of Rs. 1,58,113.20 has been raised in the name of Dharmendra Kesarwani.
The petitioner Shivani Kesarwani, wife of deceased Dharmendra Kesarwani, the proprietor of the petitioner firm, claiming herself to be his legal representative (Annexure-7), has filed the petition inter alia with the submissions that Dharmendra Kesarwani had died on 30.08.2023. A show cause notice dated 06.12.2023 was issued in the name of deceased Dharmendra Kesarwani under Section 73 of the Act, however, as the same were uploaded on the portal, there was no occasion for the petitioner to have accessed the said portal, the show cause notice remained unanswered which resulted in passing of the order dated 04.03.2024 raising demand against the deceased, which order deserves to be set aside.
Learned counsel for the respondents supported the order impugned with the aid of provisions of Section 93 of the Act. Submissions have been made that under the provisions of Section 93, the recovery can be made from the legal representatives even
after the determination has been made after the death of the proprietor of the firm.
We have considered the submissions made by counsel for the parties and have perused the material available on record.
Undisputed facts are that the show cause notice, reminders and determination of tax have been made after the death of the proprietor of the firm. Provisions of Section 93 of the Act, insofar as relevant, reads as under:
"
Special provisions regarding liability to pay tax, interest or penalty in certain cases: (1) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016 (31 of 2016), where a person, liable to pay tax, interest or penalty under this Act, dies, then - (a) if a business carried on by the person is continued after his death by his legal representative or any other person, such legal representative or other person, shall be liable to pay tax, interest or penalty due from such person under this Act; and (b) if the business carried on by the person is discontinued, whether before or after his death, his legal representative shall be liable to pay, out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax, interest or penalty due from such person under this Act, whether such tax, interest or penalty has been determined before his death but has remained unpaid or is determined after his death."
A perusal of the above provision would reveal that the same only deals with the liability to pay tax, interest or penalty in a case where the business is continued after the death, by the legal representative or where the business is discontinued, however, the provision does not deal with the fact as to whether the determination at all can take place against a deceased person and the said provision cannot and does not authorise the determination to be made against a dead person and recovery thereof from the legal representative.
Once the provision deals with the liability of a legal representative on account of death of the proprietor of the firm, it is sine qua non that the legal representative is issued a show cause
notice and after seeking response from the legal representative, the determination should take place.
In view thereof, the determination made in the present case wherein the show cause notice was issued and the determination was made against the dead person without issuing notice to the legal representative, cannot be sustained.
Consequently, the writ petition is allowed. The order dated 04.03.2024 (Annexure-5 to the writ petition) is quashed and set aside. The respondents would be free to take appropriate proceedings in accordance with law. Order Date :- 16.5.2025 Mukesh Pal/Sazia (Kshitij Shailendra, J) (Arun Bhansali, CJ) MUKESH PAL High Court of Judicature at Allahabad
Reproduced from the public record of the Allahabad High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.