Court: High Court of Judicature at Allahabad
Case No.: Writ Tax No. 2487 of 2025
Petitioner: M/s New Goyal Beej Bhandar
Respondent: Assistant Commissioner Sector – 2, State Tax, Bulandshahar & another
Date of Judgment: 23 May 2025
Relevant Sections: Section 73(9) & Section 93 of the CGST Act, 2017
Category of Dispute: Demand under GST (validity of proceedings against deceased person)
Facts (Paras 1–3)
The petitioner firm, M/s New Goyal Beej Bhandar, was a proprietorship of late Vinod Kumar, who died on 30.04.2020. Despite his death, the State Tax Department issued a show cause notice on 24.11.2022 under Section 73 of the CGST Act, uploaded it on the GST portal, and subsequently passed an order on 26.12.2023 under Section 73(9), raising a demand of ₹3,40,370 against the firm. The legal heir, Mr. Vikas Goel, challenged the demand contending that proceedings against a deceased person were void ab initio.
Questions before the Court
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Whether proceedings and tax determination under Section 73 can be initiated in the name of a deceased proprietor?
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Whether Section 93 of the CGST Act permits such determination against a dead person or requires fresh notice to the legal representative?
Observations of the Court (Paras 6–9)
The Court analyzed Section 93 of the CGST Act, which governs liability of legal representatives. The provision allows recovery from legal heirs either if the business is continued or from the estate if discontinued. However, the Court clarified that this provision only concerns recovery—it does not authorize tax determination against a deceased person.
The Court emphasized that issuing a valid show cause notice to the legal representative is a sine qua non for a lawful determination. Since both the SCN and order were issued in the name of the deceased proprietor without impleading or notifying the legal heir, the proceedings were fundamentally flawed.
Thus, the department’s reliance on Section 93 was misplaced, as the section presupposes a valid determination, which was absent in this case.
Judgment (Paras 9–10)
The High Court quashed the order dated 26.12.2023 passed under Section 73(9), holding that the determination made against a dead person was unsustainable in law. However, it left liberty to the department to initiate fresh proceedings in accordance with law by issuing notice to the legal heir.
Case Law Table
| Case Referred | Court’s Holding / Principle |
|---|---|
| No external precedents specifically cited | The Court relied solely on interpretation of Section 93 CGST Act, holding that recovery can be made from legal heirs only after lawful determination against them, not against a deceased person. |
Between Fine Lines
For businesses and tax authorities, this case reinforces that GST proceedings cannot be continued in the name of a deceased proprietor. Any show cause notice or adjudication must be directed to the legal heirs or legal representatives. Otherwise, the demand is void, though the department retains the right to initiate fresh proceedings properly.
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