GST proceedings cannot be initiated against a person who is already deceased.
Issue
Are show-cause notices and subsequent demand orders issued under the GST Act legally valid if they are issued in the name of a proprietor who is already deceased at the time of their issuance?
Facts
- The petitioner was the wife and legal heir of a sole proprietor who had passed away.
- After the proprietor’s death, the petitioner had properly applied for and was granted the cancellation of the firm’s GST registration.
- Sometime after this, the GST department initiated proceedings under Section 74 (alleging fraud) for a period prior to the proprietor’s death.
- The show-cause notices and the final demand orders for these proceedings were all issued in the name of the deceased proprietor. These notices were simply uploaded to the portal of the now-cancelled registration.
- The petitioner challenged these notices and orders on the fundamental ground that they were issued against a dead person and were therefore a nullity in law.
Decision
The High Court ruled decisively in favour of the assessee.
- It held that it is an inherent and fundamental legal principle that proceedings cannot be initiated against a person who is deceased. A dead person has no legal existence and, therefore, cannot be a party to any legal proceeding.
- The court, following its own binding precedent in a similar case, found that the proceedings were void ab initio (void from the beginning).
- Accordingly, the court quashed and set aside the entire set of show-cause notices and the final orders that had been passed under Section 74.
Key Takeways
- A Dead Person Has No Legal Standing: A foundational principle of law is that legal proceedings can only be initiated against a living person or a recognized legal entity. Proceedings started in the name of a dead person are a nullity in law from the outset.
- Notice is the Foundation of a Proceeding: A valid notice is the bedrock of any assessment or demand proceeding. A notice issued to a non-existent person (a deceased individual) is not a valid notice, and therefore, all subsequent proceedings built upon it are legally invalid.
- The Correct Procedure is Crucial: While the death of a proprietor doesn’t extinguish their past tax liabilities, the department must follow a legally valid procedure to recover such dues from the estate or legal heirs. Initiating fresh proceedings against the deceased person is not the correct procedure.
- Jurisdictional Defect: Issuing a notice to a dead person is not a mere procedural irregularity that can be corrected; it is a fundamental jurisdictional defect that renders the entire proceeding void.
HIGH COURT OF ALLAHABAD
Shubhangi Gupta
v.
State of U.P.
Shekhar B. Saraf and Praveen Kumar Giri, JJ.
WRIT TAX No. 4222 of 2025
SEPTEMBER 4, 2025
Praveen Kumar for the Petitioner.
ORDER
1. Heard learned counsel appearing on behalf of the parties. 2. In the present writ petition, the following prayers have been made by the petitioner:-
| “i) | issue a writ, order or direction in the nature of certiorari quashing impugned show cause notice dated 25.09.2021, for the period October, November December, 2017 issued by respondent no.3 (Annexure No.4). |
| (ii) | issue a writ, order or direction in the nature of certiorari quashing impugned show cause notice dated 07.08.2023, for the period September, October, 2017 issued by respondent no.3 (Annexure No.5). |
| (iii) | issue a writ, order or direction in the nature of certiorari quashing impugned show cause notice dated 25.09.2021, for the period September, 2017 to March, 2018, issued by respondent no.3 (Annexure No. 6). |
| (iv) | issue a writ, order or direction in the nature of certiorari quashing impugned show cause notice dated 25.09.2021, for the period March,2018, issued by respondent no.3 (Annexure No.7). |
| (v) | issue a writ, order or direction in the nature of certiorari quashing impugned show cause notice dated 22.02.2023, for the period October, November, 2017, issued by respondent no.3 (Annexure No.8). |
| (vi) | issue a writ, order or direction in the nature of certiorari quashing the impugned order dated 06.07.2023, for the period October, November & December, 2017 issued by respondent no.3, u/s 74 of the Act (Annexure No.4). |
| (vii) | issue a writ, order or direction in the nature of certiorari quashing the impugned order dated 04.10.2023, for the period September, October, 2017 issued by respondent no.3, u/s 74 of the Act (Annexure No.5). |
| (viii) | issue a writ, order or direction in the nature of certiorari quashing the impugned order dated 06.07.2023, for the period September, 2017 to March, 2018, issued by respondent no.3, u/s 74 of the Act (Annexure No.6). |
| (ix) | issue a writ, order or direction in the nature of certiorari quashing the impugned order dated 14.11.2022, for the period March, 2018, issued by respondent no.3, u/s 74 of the Act (Annexure No. 7). |
| (x) | issue a writ, order or direction in the nature of certiorari quashing the impugned order dated 06.07.2023, for the period October, November, 2017, issued by respondent no.3, u/s 74 of the Act (Annexure No.8). |
| (xi) | issue a writ, order or direction in the nature of mandamus commanding the respondent to proceed against the petitioner if law permits. |
| (xii) | issue any other suitable writ, order or direction which the Hon’ble Court may deem fit and proper under the facts and circumstances of the case. |
| (xiii) | award costs of the petition to the petitioner.” |
3. Facts reveals that the petitioner is wife of Late Ankur Gupta who was the proprietor of the Modern Steel Traders. Mr. Ankur Gupta died on February 21, 2019. Subsequent to his death, wife of Late Ankur Gupta made an application before the Proper Officer for cancellation of the registration which was cancelled on July 8, 2019. In spite of having knowledge of the same, the authorities issued show cause notices dated September 25, 2021 (Annexure Nos. 4, 6 and 7), February 22, 2023 and August 7, 2023, and thereafter, passed ex parte orders dated July 6, 2023 (Annexure Nos.4, 6 and 8), October 4, 2023 and November 14, 2022 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 Late Ankur Gupta 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. 370 (Allahabad)/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 (Deceased) (supra), we are of the view that the entire show cause notice and the impugned order passed under Section 74 of the Act cannot sustain. Accordingly, the show cause notices dated September 25, 2021 (Annexure Nos. 4, 6 and 7), February 22, 2023 and August 7, 2023, and thereafter, passed ex parte orders dated July 6, 2023 (Annexure Nos.4, 6 and 8), October 4, 2023 and November 14, 2022 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.