Ushaben Kalpeshbhai Vs State Tax Officer (Gujarat High Court)
Summary: The Gujarat High Court allowed the writ petition filed by Ushaben Kalpeshbhai Patni, wife and legal heir of deceased Kalpeshbhai Ramubhai Patni, challenging GST proceedings initiated in the name of her deceased husband. The petitioner sought quashing of the notice dated 02.07.2024 issued under Section 73 of the Gujarat Goods and Services Tax Act, 2017 (GGST Act), together with the consequential demand order dated 01.02.2025.
Late Kalpeshbhai Ramubhai Patni was engaged in trading various goods under the name and style of Shivam Trading Co. He died on 03.05.2021 due to Covid-19 at the age of 37 years. The registration of the proprietorship was subsequently cancelled on 16.07.2021, with nil demand being assessed on account of failure to file GST returns continuously for six months. According to the petitioner, the business was not continued after her husband’s death. She was a housewife, was not connected with the business and was unable to locate the records relating to the deceased’s business.
On 14.06.2024, nearly three years after the death of the proprietor and after cancellation of the registration, the respondent issued a pre-show cause notice intimation under Section 73(5) of the GGST Act in FORM DRC-01A in the name of the deceased proprietor. The proposed tax liability was Rs.28,49,906/- along with interest and penalty for F.Y. 2020-21. The petitioner stated that the intimation was uploaded only on the GSTN portal after the taxpayer’s death and therefore she was unaware of it and could not respond.
Thereafter, the respondent issued the impugned notice under Section 73(1) of the GGST Act in FORM DRC-01 dated 02.07.2024 against the deceased taxpayer, seeking recovery of Rs.28,49,906/- with interest and penalty. As recorded in the judgment, the notice was apparently based merely on differential tax liability on taxable outward supplies reflected in GSTR-01 and GSTR-3B, without further verification concerning the actual supplies made by the deceased taxpayer or availability of input tax credit against the purported supplies.
The respondent subsequently passed an order dated 01.02.2025 along with FORM DRC-07 against the deceased taxpayer, confirming the proposed demands in the absence of a reply. The petitioner learnt of the notice and order only after receiving a call from the consultant handling GST returns for the deceased’s business.
Before the High Court, the petitioner’s advocate submitted that the notices and consequential orders were liable to be quashed because they had been issued against a dead person. It was submitted that the petitioner was a housewife, had no connection with the proprietorship’s business activities and was unaware of the proceedings. Reliance was placed on the judgment dated 28.07.2026 in Special Civil Application No.10294 of 2026.
The learned Assistant Government Pleader opposed the petition, submitting that three notices dated 19.10.2024, 08.11.2024 and 11.12.2024 had been issued calling upon the deceased assessee to file replies. It was also submitted that the notice dated 11.12.2024 required the deceased assessee to remain present for physical hearing, but nobody appeared. According to the Revenue, notices had also been affixed at the principal place of business and therefore the impugned orders ought not to be quashed.
The Division Bench noted that it was undisputed that the petitioner was the housewife of the deceased assessee, who died on 03.05.2021 during the Covid pandemic, and that she was not remotely connected with the proprietorship. The registration itself had been cancelled on 16.07.2021. The respondent commenced the proceedings nearly three years later by issuing the Section 73(5) intimation to the deceased assessee. Although subsequent notices were issued and affixed at the factory premises, the Court observed that the petitioner was a housewife, was not connected with the business and was unaware of the niceties of the GSTN portal.
The Court acknowledged that the respondent authority was not aware of the husband’s death when the proceedings were initiated. Nevertheless, in view of the factual circumstances, it held that the proceedings had been initiated against a dead person. The Court therefore quashed and set aside the show cause notices as well as the orders passed thereafter.
The Court clarified that it would remain open to the respondent to initiate proper proceedings in accordance with law against the petitioner for the outstanding demand. The petition was accordingly allowed, Rule was made absolute and there was no order as to costs. The Court’s operative relief was thus to invalidate the proceedings initiated against the deceased taxpayer while leaving the Revenue free to proceed properly against the legal heir in accordance with law.
Cases Discussed
- Special Civil Application No.10294 of 2026, judgment dated 28.07.2026 — relied upon by the petitioner in support of the challenge to proceedings issued against the deceased taxpayer.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Rule returnable forthwith. Ms.Tanushree Shrimal, learned Assistant Government Pleader waives service of notice of Rule for and on behalf of the respondent.
2. In the present writ petition, the petitioner has prayed for quashing and setting aside the notice dated 02.07.2024 issued to the petitioner, who is wife of the deceased-Shri Kalpeshbhai Ramubhai Patni (assessee).
BRIEF FACTS
3. Late Shri Kalpeshbhai Ramubhai Patni (husband of the petitioner) was engaged in the business of trading of various goods in the name and style of Shivam Trading Co.. Shri Kalpeshbhai Ramubhai Patni passed away on 03.05.2021 due to Covid-19 at the young age of 37 years. The registration of the proprietorship entity was cancelled by the authorities vide order dated 16.07.2021, assessing nill demands on failure to file the GST returns for a continuous period of six months.
3.1 It is the case of the petitioner, that the business of the deceased proprietor was not continued upon the death of the said proprietor, and she being a householder, was unable to locate the records of the business undertaken by the deceased husband. The respondent authority subsequent to the death of the proprietor and subsequent to the cancellation of registration, issued pre-show cause notice intimation under section 73(5) of the Gujarat Goods and Services Tax Act, 2017 (for short ‘the GGST Act’) dated 14.06.2024 in FORM DRC-01A, intimating proposed tax liability of Rs.28,49,906/- along with interest and penalty for the tax period Financial Year (for short ‘F.Y.’) 2020-21. Since the aforesaid intimation was issued only on the GSTN portal after the death of the taxpayer, the present petitioner (legal heir) was not aware of the same and was unable to respond to the said intimation.
3.2 The respondent authority thereafter issued the impugned notice under section 73(1) of the GGST Act along with FORM DRC-01 dated 02.07.2024 on the deceased taxpayer seeking to recover the tax liability of Rs.28,49,906/- along with interest and penalty for the tax period F.Y. 2020-21. The said notice was issued apparently merely on the differential tax liability on taxable outward supplies as per GSTR-01 and GSTR-3B without undertaking any further verification as regards the actual supplies made by the deceased taxpayer, as well as the availability of the input tax credit against the purported supplies. Since the aforesaid notice was issued on the GSTN portal after the death of the taxpayer, the present petitioner (legal heir) was not aware of the same and was unable to respond to the said notice.
3.3 The respondent authority thereafter passed the impugned order along with FORM DRC-07 dated 01.02.2025 against the deceased taxpayer, confirming the demands proposed in the show cause notice in the absence of any reply filed by the deceased taxpayer. Subsequent to the issuance of the impugned order, the petitioner received a call from the consultant handling and filing of the GST returns for the business of the deceased taxpayer that the impugned notice and the order had been issued on the GSTN portal.
4. Learned advocate, Mr. Abhay Y. Desai appearing for the petitioner has submitted that the impugned notices as well as the subsequent orders are required to be quashed and set aside as the same were issued against the dead person. It is submitted that the petitioner was a house wife and was not related to the business activities of the proprietorship, which was being run by her late husband and hence, was not aware of the proceedings which culminated into the impugned demand orders. In support of his submissions, he has placed reliance on the judgment dated 28.07.2026 passed in Special Civil Application No.10294 of 2026.
5. Learned AGP, Ms.Tanushree Shrimal appearing for the respondent while opposing the present writ petition, has submitted that the respondent authority has issued 3 notices; on 19.10.2024, 08.11.2024 and 11.12.2024 asking the deceased assessee to submit his reply however, no reply has been given by the late husband of the petitioner. It is submitted that through the notice dated 11.12.2024, the deceased assessee was asked to remain present at 2:13 hours for physical hearing and since no one appeared, the impugned order was passed. She has also submitted that on the principle place of business, the notices were also affixed and it is urged that the impugned orders may not be quashed and aside.
6. It is not in dispute that the petitioner is a house wife of the deceased assessee – Shri Kalpeshbhai Ramubhai Patni, who passed away during Covid Pandemic on 03.05.2021. The petitioner was not remotely connected to the proprietorship and ultimately, the registration was cancelled on 16.07.2021 of the proprietorship. After the period of almost 3 years, on 14.06.2024, the respondent authority issued the pre-show cause notice intimation to the deceased assessee under the provisions of Section 73(5) of the GGST Act intimating about the proposed tax liability of Rs.28,49,906/-. Thereafter, the proceedings further continued and the notices were issued and affixed at the factory premises of the deceased assessee.
Since no one appeared, the respondent authority passed the impugned order dated 01.02.2025 confirming the demands, proposed in the show cause notices. It is true that the respondent authority was not aware about the death of the husband of the petitioner, who was connected with the business activities of the proprietorship. However, the petitioner, being a housewife, was not even remotely connected with the business and was unaware of the niceties of the GSTN portal.
7. Thus, in wake of the aforesaid facts, since the proceedings are initiated against the dead person, we quash and set aside the show cause notices as well as the impugned orders passed thereafter with a clarification that it will be open for the respondent to initiate proper proceedings in accordance with law against the petitioner for the outstanding demand. The present petition stands allowed. Rule is made absolute. No order as to costs.
