Facts of the Case

The first petitioner, BKR Services Private Limited, is a company represented by its Head-Finance and Management Operations; the second and third petitioners are the son and widow, respectively, of late Mr. Rudraswamy B.K., proprietor of M/s. B.K.R. Swamy Security Agencies, who died on 25.5.2023. Two Adjudication Orders dated 22.12.2025, passed under Section 73 of the CGST/KGST Act for the tax period 2021-22, and their summaries in Form GST DRC-07, were issued in connection with the deceased proprietor's business. Pursuant to these orders, Recovery Notices dated 4.7.2026 in Form GST DRC-13 were issued to the State Bank of India (respondent no.5) to recover amounts from the bank account of the first petitioner, BKR Services Private Limited — a company the petitioners say is legally distinct from the deceased's proprietary concern. The family had reported Mr. Rudraswamy's death to the department by letter dated 28.6.2023.

Issues Involved

  1. Whether recovery notices in Form GST DRC-13 could be issued against BKR Services Private Limited, an entity distinct from the deceased proprietor's business, M/s. B.K.R. Swamy Security Agencies.
  2. Whether the Adjudication Orders against the legal heirs properly examined whether the proceedings could be sustained under Section 93(1)(a) or 93(1)(b) of the CGST/KGST Act.
  3. Whether two separate show cause notices for different issues but the same tax period could validly be issued.

Petitioner's Arguments

  • The first petitioner, BKR Services Private Limited, cannot be fastened with the liability of M/s. B.K.R. Swamy Security Agencies, being a distinct and different entity.
  • The law does not permit recovery from an entity unrelated to the deceased's estate; proceedings for GST dues, interest or penalty of a deceased registered person can only be against his legal heirs.
  • For the second and third petitioners, contended that the Adjudication Orders failed to properly examine Section 93 of the CGST/KGST Act, and that two separate show cause notices for the same tax period on different issues were impermissible.
  • Argued the second and third petitioners should be permitted to demonstrate that they had not continued the deceased's business and that no estate existed to support the demand.

Respondent's Arguments

  • The Additional Government Advocate, appearing for the State respondents, accepted notice and did not seriously dispute that the first petitioner was a distinct and different entity from the deceased's proprietary concern.

Court Order/Findings

  • Accepted that it remained undisputed that the first petitioner was different and distinct from the proprietary concern of the deceased, and therefore the Recovery Notices in Form GST DRC-13 could not have been issued against the first petitioner, warranting quashing on this ground.
  • Found that the impugned Adjudication Orders did not examine whether the proceedings against the legal heirs could be sustained under Section 93(1)(a) or 93(1)(b) of the CGST/KGST Act — a failure to consider material circumstances justifying interference.
  • Left open, for consideration afresh with an opportunity to respond, the second and third petitioners' contention that two separate show cause notices for different issues for the same tax period were impermissible.
  • Allowed the petition: quashed the Recovery Notices against the first petitioner; quashed the Adjudication Orders and their summaries against the second and third petitioners, restoring both proceedings with liberty to file a reply to the corresponding show cause notices by 14.8.2026, leaving all grounds open.

Important Clarification

  • GST recovery action (DRC-13) cannot be directed against a company merely connected to the family of a deceased proprietor if the company is a legally distinct entity from the deceased's proprietary business — corporate/personal separateness must be respected even in recovery proceedings.
  • Before fastening GST liability on the legal heirs or estate of a deceased taxable person, the adjudicating authority must specifically examine whether Section 93(1)(a) (business continued by legal representative) or Section 93(1)(b) (business discontinued) applies — a generic order without this analysis is liable to be set aside.
  • Issuing multiple show cause notices covering different issues but the same tax period is a live ground of challenge that must be examined on its merits, not brushed aside.

Sections Involved

  • Section 73 of the CGST/KGST Act, 2017 – governs determination of tax not paid/short paid where fraud or wilful misstatement is not alleged.
  • Section 93 of the CGST/KGST Act, 2017 – fixes liability to pay tax, interest and penalty in cases of transfer or discontinuance of business, differentiating between continued and discontinued business.

Decision – In Favour of

The order is in favour of the Assessee. All three petitioners succeeded: the recovery notices against the company were quashed outright, and the adjudication orders against the legal heirs were quashed and restored for a fresh reply.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Karnataka at Bengaluru
  • Case No.: WP No. 21878 of 2026 (T-RES)
  • CNR: KAHC010482632026
  • Coram: Hon'ble Mr. Justice B M Shyam Prasad
  • Decision Date: 17.07.2026
  • Disposal Nature: Allowed; GST recovery notices (DRC-13) and Section 73 adjudication orders quashed, matter restored for fresh reply

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