In a significant judgment, the Allahabad High Court has ruled that tax proceedings under the Goods and Services Tax (GST) Act, 2017 cannot be initiated or continued against a deceased person, and no tax demand can be determined without proper notice to the legal representatives.
The decision was passed in the case titled Amit Kumar Sethia (Deceased) v. State of U.P. and Another [Writ Tax No. 917 of 2025] by a division bench comprising Chief Justice Arun Bhansali and Justice Kshitij Shailendra.
Key Issue: Proceedings Initiated Against a Deceased Taxpayer
The petitioner, Amit Kumar Sethia, passed away on April 20, 2021, and the GST registration of his firm was cancelled with effect from May 13, 2021. However, more than two years later, a show cause notice under Section 73 of the GST Act was issued in the name of the deceased on September 13, 2023. Despite the cancellation of the firm’s registration, notices and reminders were uploaded on the GST portal without any intimation to the legal heirs.
Subsequently, an order under Section 73 was passed on November 17, 2023, prompting the legal representatives to challenge the same as void and without legal basis.
Legal Argument and Court’s Interpretation of Section 93
The petitioners contended that the GST authorities were aware of the death of the taxpayer, and initiating proceedings in his name was illegal. The absence of any notice to the legal representatives rendered the entire process null and void.
The Court analyzed Section 93 of the CGST Act, 2017, which deals with liability in case of death of a proprietor. According to:
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Section 93(1)(a): If the business continues post-death, the legal representative is liable for tax, interest, or penalty.
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Section 93(1)(b): If the business is discontinued, legal heirs are liable to pay dues from the estate of the deceased, to the extent of its capacity.
However, the Court emphasized that Section 93 does not authorize the initiation or determination of tax liability directly against a deceased person. The provision only governs post-determination recovery from legal representatives—not the process of tax adjudication itself.
Court’s Conclusion: Show Cause Notice to Legal Heirs is Mandatory
The bench held that issuance of show cause notice to legal representatives is a sine qua non (essential condition) for valid tax determination. As no such notice was issued in this case, the entire proceeding stood vitiated.
“The provision [Section 93] does not empower determination of liability against a deceased person. Such proceedings must necessarily involve the legal representatives, failing which they are void,” the Court observed.
Final Verdict
The Allahabad High Court quashed the tax determination order and emphasized that GST authorities must strictly adhere to procedural fairness when dealing with estates of deceased taxpayers.
Implications of the Judgment
This ruling serves as a critical precedent in GST jurisprudence, reaffirming the principle that tax liability must be determined in accordance with law and that legal heirs cannot be held accountable without due process.
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