Agarwal Khilona Bazar Vs State of U.P. and another (Allahabad High Court)
In a significant ruling concerning Goods and Services Tax (GST) liability post-demise of a business proprietor, the Allahabad High Court has nullified a tax demand notice issued to a deceased individual. The court emphasized that even if tax liability can be recovered from legal representatives, the initial determination process, including the issuance of a show cause notice, must be directed at the living legal heir and not the deceased person.
The case, Agarwal Khilona Bazar Vs State of U.P. and another, originated from a petition filed by Vishnu Agarwal, husband of the late Kamini Agarwal. Kamini Agarwal, proprietor of M/s Agarwal Khilona Bazar, passed away on July 22, 2020. Subsequently, the firm’s GST registration was cancelled effective September 8, 2022. Despite this, a show cause notice dated December 23, 2023, under Section 73 of the GST Act, was issued in the name of the deceased Kamini Agarwal. As the notice was uploaded to the GST portal and the registration was already cancelled, the petitioner had no means to access or respond to it, leading to a demand order dated April 12, 2024, raising a liability of ₹3,09,243 against the deceased.
