M/S Astha Power Point vs. State Of Uttar Pradesh And Another
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The petitioner, M/s Astha Power Point, represented by Siddhant Pandey, legal representative of the deceased proprietor Akhilesh Kumar Pandey, challenged an ex-parte order dated 16.07.2024. This order, passed under Section 73(9) of the GST Act, 2017, raised a demand of Rs. 1,65,902.00. The proprietor, Akhilesh Kumar Pandey, had died on 01.01.2024. A show cause notice dated 03.05.2024 and a reminder dated 20.06.2024 were issued in the name of the deceased. These were uploaded on the portal, but the petitioner claims they were not accessed, leading to the ex-parte order without the petitioner's response. The respondents argued that Section 93 of the Act allows recovery from legal representatives even after the proprietor's death.
Held
The Court held that while Section 93 of the GST Act, 2017, 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 deceased person. The Court found that the provision pertains to the continuation or discontinuation of the business by the legal representative and the subsequent liability. However, it does not permit the initial determination to be made against a dead person. The Court reasoned that for the legal representative to be held liable, a show cause notice must be issued to them, and a determination should take place after considering their response. Since the show cause notice and the determination were made against the deceased proprietor without issuing notice to the legal representative, the order dated 16.07.2024 was deemed unsustainable. The Court quashed and set aside the impugned order, allowing the respondents to take appropriate proceedings in accordance with the law.
Key Issues
1. Whether a determination of tax, interest, or penalty under Section 73 of the 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, turning on Section 73 and Section 93 of the GST Act, 2017). Petitioner's contention: The determination and demand order were passed against a deceased person without issuing a show cause notice to the legal representative, making the order unsustainable. The petitioner relied on the fact that the proprietor died before the show cause notice was issued and the subsequent order was passed. Respondent's contention: The respondents supported the impugned order by invoking Section 93 of the GST Act, 2017, arguing that recovery can be made from legal representatives even after the determination is made after the death of the proprietor.
Sections Cited
Section 73, Section 93
AI-generated summary — verify with the full judgment below
Neutral Citation No. - 2025:AHC:67739-DB Chief Justice's Court Case :- WRIT TAX No. - 1913 of 2025 Petitioner :- M/s Astha Power Point Respondent :- State of U.P. and another Counsel for Petitioner :- Pranjal Shukla Counsel for Respondent :- C.S.C. Hon'ble Arun Bhansali,Chief Justice Hon'ble Vikas Budhwar,J.
This petition is directed against ex-parte order dated 16.07.2024 passed under Section 73(9) of the Goods and Services Tax Act, 2017 (for short 'the Act') wherein a demand of Rs. 1,65,902.00 has been raised in the name of Akhilesh Kumar Pandey.
The petitioner Siddhant Pandey son of deceased Akhilesh Kumar Pandey, the proprietor of the petitioner firm, claiming himself to be his legal representative (Annexure-8), has filed the petition inter alia with the submissions that Akhilesh Kumar Pandey had died on 01.01.2024. A show cause notice dated 03.05.2024 was issued in the name of deceased Akhilesh Kumar Pandey under Section 73 of the Act, followed by reminder dated 20.6.2024, 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 16.07.2024 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 16.07.2024 (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 :- 30.4.2025 nd/piyush (Vikas Budhwar, J) (Arun Bhansali, CJ) PIYUSH KUMAR 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.