Facts of the Case

Jagdish Prasad, proprietor of M/s Avon Steel, died on 27.04.2021, and his GST registration was cancelled with effect from 18.08.2021. Despite this, a show cause notice dated 10.11.2022 was issued under Section 74 of the GST Act in the name of the deceased Jagdish Prasad, uploaded only on the GST portal, which his widow Vidya Gupta — who filed the present petition — had no occasion to access. The notice went unanswered, culminating in an order dated 06.06.2023 raising a demand of Rs. 54,50,640 in the deceased's name. Vidya Gupta challenged this order before the Allahabad High Court as void ab initio.

Issues Involved

  1. Whether a show cause notice and determination order under Section 74 can be validly issued and passed in the name of a person who was already dead at the time.
  2. Whether Section 93 of the GST Act, dealing with liability of legal representatives, authorises such determination against the deceased without notice to the legal representative.

Petitioner's Arguments

  • Once the Department knew that Jagdish Prasad had died and his registration had been cancelled, there was no occasion to pass the show cause notice and order in the name of the deceased, and the entire proceedings were void ab initio and deserved to be quashed.

Respondent's Arguments

  • Under Section 93 of the Act, recovery can be made from the legal representative even after determination is completed after the death of the proprietor, and the order impugned was supported on this basis.

Court Order / Findings

  • The Court held that Section 93 only deals with the liability of a legal representative to pay tax, interest or penalty due, whether determined before or after the proprietor's death, but does not authorise the determination itself to be made against a dead person, nor recovery from a legal representative who was never issued notice or given a chance to respond.
  • Since it is sine qua non that the legal representative be issued a show cause notice and heard before any determination proceeds, the determination made against the deceased Jagdish Prasad without notice to his legal representative could not be sustained; the order dated 06.06.2023 was quashed and set aside, with liberty to the respondents to take appropriate proceedings afresh in accordance with law.

Important Clarification

  • Section 93 of the GST Act governs only who bears liability once tax, interest or penalty is validly determined against a deceased person's estate or successor business — it does not permit a fresh determination to be made in the name of, or against, a person already known to be dead.
  • A show cause notice and adjudication in Section 74/73 proceedings must be addressed to and served upon the legal representative once the department is aware of the assessee's death, failing which the resulting order is unsustainable, though the department retains liberty to proceed afresh against the correct party.

Sections Involved

  • Section 74, CGST Act, 2017 – provision under which the demand was originally raised, alleging fraud/suppression.
  • Section 93, CGST Act, 2017 – special provision on liability to pay tax, interest or penalty where the taxable person has died.

Decision – In Favour of

The writ petition was allowed in favour of the petitioner (legal heir), with the demand order quashed, though the department was given liberty to proceed afresh against the correct legal representative in accordance with law.

Case Details

Court: High Court of Judicature at Allahabad. Case No.: Writ Tax No. 5052 of 2025. Coram: Hon'ble Mr. Justice Shekhar B. Saraf and Hon'ble Mr. Justice Arun Kumar. Date of Order: 26th September, 2025.

Link to Download the Order

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