GST Proceedings Against Deceased Proprietor Quashed; Notices on Portal Invalid

Issue

Whether GST proceedings (Show Cause Notice and Assessment Order) initiated against a deceased sole proprietor are valid, especially when the department was already aware of the death and had cancelled the registration, and whether uploading notices on the GST portal constitutes valid service in such cases.

Facts

The Proprietor: The sole proprietor died in February 2021.
Cancellation: The legal heirs (counsel) applied for cancellation of the GST registration post-death. The registration was officially cancelled by the department in June 2023.
The Error: Despite the death and the cancellation, the GST Authorities issued a Show Cause Notice (SCN) in May 2024 and passed an ex parte order in August 2024 in the name of the deceased proprietor.
Mode of Service: The SCN and Order were merely uploaded on the GST common portal. The legal heirs (petitioner) were unaware of these proceedings as they were not personally served.
Petitioner’s Plea: The petitioner (son of the deceased) challenged the proceedings, arguing that initiating action against a dead person is legally unsustainable.

Decision

Action Against Non-Existent Person: The High Court held that proceedings cannot be initiated against a deceased person. Once a person dies, they cease to be a legal entity.
Knowledge of Death: Since the registration was cancelled in June 2023 specifically due to the death, the department was fully aware of the facts. Initiating proceedings against the deceased in 2024 was “bad in law.”
Portal Upload Insufficient: Merely uploading notices on the portal does not cure the fundamental defect of proceeding against a non-existent person. Legal heirs cannot be expected to monitor the portal of a cancelled registration indefinitely without specific notice.
Proper Procedure: The authorities ought to have proceeded against the Legal Representative/Heirs in the manner prescribed by law (Section 93 of the CGST Act).
Verdict: The SCN and the impugned order were quashed. However, the Court granted the department liberty to proceed against the petitioner (legal heir) afresh in accordance with the law. [In favour of assessee]

Key Takeaways

Proceedings Void Ab Initio: Any legal notice or order issued in the name of a dead person is generally considered a nullity and is void ab initio (from the start).
Section 93 (Liability on Death): While the tax liability does not vanish upon death, the procedure to recover it changes. The department must officially bring the Legal Representative on record and issue notices to them, limited to the value of the estate inherited.
Portal Limitations: While the GST portal is the primary mode of communication, Courts are increasingly ruling that for cancelled registrations or deceased taxpayers, physical service or specific intimation to heirs is necessary to ensure natural justice.

HIGH COURT OF ALLAHABAD

Ashwani Kumar Pandey

State of U.P.^*

Shekhar B. Saraf and Manjive Shukla, JJ.

WRIT TAX No. 1559 of 2025

DECEMBER 16, 2025

Manuvendra Singh and Shubham Kumar for the Petitioner.

ORDER

1. Heard learned counsels appearing on behalf of the parties.

2. In the present writ petition, the following prayers have been made by the petitioner:-

“(i) Issue any other Writ, Order or direction in the nature of Certiorari thereby quashing the order dated 24.04.2024, passed by respondent no. 3, under section 50 as well as section 122 of the U.P. G.S.T. Act, 2017 for the tax period April 2018 to March, 2019, by which respondent no. 3 has demand of Rs. 55,42,604.52/- (Tax Rs. 26,64,713.72/- and Interest of Rs. 2,66,471.36) against the dead person namely Ram Prasad Panday, contained as Annexure No. 3 to this affidavit in the interest of justice.”

3. Facts reveals that the petitioner is son of Late Mr. Ram Prasad Panday who was the proprietor of the M/S Pandey Iron Dealer. Mr. Ram Prasad Panday died on February 06, 2021. Subsequent to his death, Counsel of Mr. Ram Prasad Panday made an application before the Proper Officer for cancellation of the registration which was cancelled on June 27, 2023. In spite of having knowledge of the same, the authorities issued a show cause notice dated May 21, 2024, and thereafter, passed an ex parte order dated August 21, 2024, under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the Act’).

4. It is clear from the facts that the show cause notice and order both were uploaded on the portal and the same, was accordingly, not known to the legal heirs of the proprietor of the firm. The wife of Mr. Ram Prasad Panday has also expired and the writ petitioner, who is the son of Mr. Ram Prasad Panday, has filed this writ petition challenging the show cause notice and order on the ground that the same were passed against a person who was deceased. Furthermore, since information had been provided to the authorities with regard to death of the deceased person, the very initiation of the show cause notice was bad in law.

5. Learned counsel appearing on behalf of the petitioner has relied upon a Division Bench judgment of this Court presided over by Hon’ble The Chief Justice in the matter of Amit Kumar Sethia v. State of U.P (All)/Writ Tax No.917 of 2025 decided on April 2, 2025 [Neutral Citation No. – 2025:AHC:45317-DB] in support of his case. The relevant paragraphs of the said judgments are provided below:-

“6. Undisputed facts are that the show cause notice, reminders and determination of tax have been made after the death of the proprietor of the firm. Provisions of Section 93 of the Act, insofar as relevant, reads as under:

“93. Special provisions regarding liability to pay tax, interest or penalty in certain cases:

(1) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016 (31 of 2016), where a person, liable to pay tax, interest or penalty under this Act, dies, then –

(a) if a business carried on by the person is continued after his death by his legal representative or any other person, such legal representative or other person, shall be liable to pay tax, interest or penalty due from such person under this Act; and

(b) if the business carried on by the person is discontinued, whether before or after his death, his legal representative shall be liable to pay, out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax, interest or penalty due from such person under this Act, whether such tax, interest or penalty has been determined before his death but has remained unpaid or is determined after his death.”

7. A perusal of the above provision would reveal 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.

8. 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.

9. In view thereof, 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.

10. Consequently, the writ petition is allowed. The order dated 17.11.2023 (Annexure-1 to the writ petition) is quashed and set aside. The respondents would be free to take appropriate proceedings in accordance with law.”

6. In light of the above settled principle of law, it is inherent that proceedings cannot be initiated against a person who is deceased. Thus, proceedings cannot be initiated against the legal heirs of the deceased or against the estate of the deceased. However, it was open to the authorities to proceed in proper manner against the legal representative/heirs of the deceased proprietor and having failed to do so, the entire proceedings initiated from the stage of show cause notice is bad in law.

7. Following the principles laid in the judgement of Amit Kumar Sethia (supra), we are of the view that the entire show cause notice and the impugned order passed under Section 73 of the Act cannot sustain. Accordingly, the show cause notice dated May 21, 20224 and impugned order dated August 21, 2024 are quashed and set aside with liberty to the respondent authorities to proceed against the petitioner in accordance with law, if so advised.

8. With the above observations, the writ petition is allowed.