Facts of the Case

Bharat Varshney and Bhuvan Varshney, sons of the deceased Gyan Prakash, challenged orders dated 27.05.2025 and 28.05.2025 passed under Section 74(9) of the Goods and Services Tax Act, 2017, raising demands of Rs.9,01,79,889/- and Rs.4,21,24,093/- in the name of the deceased Gyan Prakash, proprietor of M/S Gyan Metal Company. Gyan Prakash had died on 26.10.2024, following which the firm's GST registration was cancelled with effect from 15.03.2024 by an order dated 08.05.2024. Despite this, a show-cause notice dated 11.11.2024 under Section 74 was issued in the name of the deceased, and the demand was ultimately raised against him.

Issues Involved

  1. Whether Section 93 of the GST Act authorises determination of tax liability against a deceased person, with recovery to follow against the legal representative.
  2. Whether a show-cause notice and determination made in the name of a person known to be deceased, without notice to the legal representative, can be sustained.

Petitioner's Arguments

  • The Department was well aware that Gyan Prakash had died and that the firm's registration had already been cancelled; there was no occasion to issue a show-cause notice in the name of the deceased.
  • Proceedings conducted in the name of a deceased person are void ab initio and liable to be quashed.

Respondent's Arguments

  • Under Section 93 of the Act, recovery can be made from the legal representatives even after determination is made following the death of the proprietor of the firm.

Court Order / Findings

  • The Court examined Section 93, which fixes liability on a legal representative to pay tax, interest or penalty due from a deceased person, whether the business is continued or discontinued, and whether the liability was determined before or after death.
  • It held that Section 93 deals only with the liability to pay once a determination exists — it does not authorise the determination itself to be made against a dead person; the provision presupposes that once liability turns on the legal representative, a show-cause notice must be issued to, and a response sought from, that legal representative before determination.
  • Since the show-cause notice and the determination were both made against the deceased Gyan Prakash without any notice to his legal representatives, the proceedings could not be sustained.
  • The writ petition was allowed, the impugned orders dated 27.05.2025 and 28.05.2025 were quashed and set aside, with liberty to the respondents to take appropriate proceedings afresh in accordance with law (i.e., against the legal representatives, with proper notice).

Important Clarification

  • Section 93 of the CGST Act fixes the legal representative's liability to pay tax once determined, but it does not empower the Department to conduct the determination proceedings themselves in the name of a person already known to be deceased — a show-cause notice and adjudication addressed to the deceased, without notice to the legal representative, is unsustainable and must be redone against the legal representative with due notice.

Sections Involved

  • Section 74, CGST Act, 2017 – determination of tax not paid by reason of fraud or suppression.
  • Section 93, CGST Act, 2017 – special provision fixing liability of a legal representative to pay tax, interest or penalty due from a deceased person.

Decision – In Favour of

Decided in favour of the Assessee (legal representatives). Orders quashed, with liberty to the Department to proceed afresh against the legal representatives.

Case Details

  • Court: High Court of Judicature at Allahabad
  • Case No.: Writ Tax No. 4428 of 2025
  • Coram: Hon'ble Shekhar B. Saraf, J. and Hon'ble Praveen Kumar Giri, J.
  • Date of Order: 8 September 2025

Link to Download the Order

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