LR must be issued SCN before making determination of GST liability of deceased

Legal representative of deceased must be issued a show cause notice before making determination of GST liability of deceased – High Court

In a recent judgment, Hon’ble Allahabad High Court has held that once GST 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.

ABCAUS Case Law Citation:
4678 (2025) (08) abcaus.in HC

In the instant case, a Writ petition was filed by the spouse of the deceased assessee against the order passed under Section 73(9) of the Goods and Services Tax Act, 2017 (‘the Act’) wherein a huge demand had been raised in the name of deceased assessee.

The deceased assessee had died and on account of his death, the GST registration of the proprietorship firm had also been cancelled.

Whereafter after more than two years, a show cause notice was issued in the name of deceased under Section 73 of the Act, followed by reminders, however, as the same were uploaded on the portal and the GST registration had already been cancelled, 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 impugned order raising demand against the deceased.

It was submitted that once the Department was well aware of the fact that the proprietor of the firm had already died and the registration of the firm had already been cancelled, there was no occasion for issuing a show cause notice in the name of the deceased and as the proceedings had been conducted in the name of the deceased, the same were void ab initio and, therefore, it was prayed that the order impugned be quashed and set aside.

The Department supported the order impugned with the aid of provisions of Section 93 of the Act. It was argued 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.

The Hon’ble High Court noted that undisputed facts were that the show cause notice, reminders and determination of tax had been made after the death of the proprietor of the firm.

It was further observed that a perusal of the provisions of section 93 of the Act provide 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.

The Hon’ble High Court held that 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.

As a result, the Hon’ble High Court held that 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 was allowed and the impugned order was quashed and set aside.

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