Case Law Details
Ashwani Kumar Pandey Vs State of U.P (Allahabad High Court)
The writ petition was filed before the Allahabad High Court challenging a demand order dated 24.04.2024 passed under Sections 50 and 122 of the Uttar Pradesh Goods and Services Tax Act, 2017 for the tax period April 2018 to March 2019. The impugned order raised a demand of ₹55,42,604.52 against a proprietor who had died on 06.02.2021. The petitioner is the son of the deceased proprietor of M/s Pandey Iron Dealer.
After the proprietor’s death, an application for cancellation of GST registration was made and the registration was cancelled on 27.06.2023. Despite having knowledge of the death and cancellation, the authorities issued a show cause notice dated 21.05.2024 and subsequently passed an ex parte order dated 21.08.2024 under Section 74 of the Act. Both the notice and the order were uploaded on the GST portal and were not communicated to the legal heirs. The wife of the deceased proprietor had also passed away, leaving the petitioner as the surviving legal heir.
The petitioner contended that initiation of proceedings against a deceased person was void and bad in law, particularly when the authorities were informed of the death. Reliance was placed on the Division Bench judgment in Amit Kumar Sethia (Deceased) vs State of U.P., which interpreted Section 93 of the Act. The Court reiterated that while Section 93 deals with the liability of legal representatives to pay tax, it does not authorize determination of tax against a deceased person. It was held that issuance of a show cause notice to the legal representative is a sine qua non before any determination can be made.
Applying the same principles, the Court held that the entire proceedings, beginning from the show cause notice to the final order, were unsustainable as they were initiated against a dead person without issuing notice to the legal heir. Consequently, the show cause notice dated 21.05.2024 and the order dated 21.08.2024 were quashed. Liberty was granted to the authorities to proceed afresh against the petitioner in accordance with law, if so advised. The writ petition was accordingly allowed on 16.12.2025.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
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 (Deceased) vs. State of U.P. and another, 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 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. December 16, 2025
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