[S. 93 GST Act] No Provision Empowering Authorities To Make Tax Determination Against Dead Assesee: Allahabad High Court

The Allahabad High Court has held that Section 93 of the Goods and Services Tax Act, 2017 does not empower the authorities to make determination of tax against a dead person and recover the same his legal representatives.

Section 93 of Goods and Services Tax Act, 2017 provides for liability to pay tax in case of death of the proprietor of the firm. Section 93(1)(a) provides that when the business is continued after the death of the proprietor, the legal representative shall be liable to pay tax, interest or penalty due from such person under the Act.

Section 93(1)(b) provides that where the business is discontinued either before or after the death of the proprietor, “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.”

Petitioner died on 20.04.2021 and the registration of his firm was cancelled with effect from 13.05.2021. However, on 13.09.2023, a notice under Section 73 of the GST Act was issued in the name of the petitioner. Despite cancellation of the firm's registration, the notice and the reminders were uploaded on the portal. No reply was filed by the heirs of the petitioner and order under Section 73 was passed on 17.11.2023.

Challenging the demand order, counsel for petitioner argued that the Department was aware of petitioner's death and no notice could have been issued in his name. It was argued that such proceedings were void ab initio.

Perusing Section 93 of the Act, the bench of Chief Justice Arun Bhansali and Justice Kshitij Shailendra held

“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.”

As Section 93 provides for proceedings against legal representatives in case of continuance of business after the death of the proprietor of the firm, the Court held issuing show cause notice to the legal representative is sine qua non and determination can only take place after seeking response from the legal representative.

Accordingly, the Court set aside the determination made against the dead person without issuing notice to legal representatives.

Case Title: Amit Kumar Sethia (Deceased) v. State of U.P. and another [WRIT TAX No. - 917 of 2025]