Amit Kumar Sethia (Deceased) Vs State of U.P. and another (Allahabad High Court)
The Allahabad High Court, in the case of Amit Kumar Sethia (Deceased) Vs State of U.P. and another, delivered a significant judgment regarding the imposition of Goods and Services Tax (GST) liability on deceased individuals. The court quashed an order dated November 17, 2023, issued under Section 73(9) of the GST Act, which raised a demand of ₹21,49,585.60 against the deceased Amit Kumar Sethia. The petitioner, Alka Sethia, the deceased’s wife, argued that her husband had passed away on April 20, 2021, and consequently, the GST registration of his proprietorship firm, M/s. Sethia Trading Company, was cancelled on June 2, 2021, effective from May 13, 2021. Despite this, a show cause notice dated September 13, 2023, followed by reminders, was issued in the name of the deceased. As the GST registration was already cancelled, the petitioner had no access to the portal, and the notices remained unanswered, leading to the impugned demand order.
The court considered the submissions and the provisions of Section 93 of the GST Act, which the respondents argued allowed for recovery from legal representatives even after the proprietor’s death. However, the High Court clarified that while Section 93 outlines the liability of legal representatives to pay tax, interest, or penalty due from the deceased, it does not authorize the tax determination itself to be made against a deceased person. The court emphasized that for the liability to be fixed on a legal representative, a show cause notice must be issued to them, and a determination should be made after considering their response. In this case, the show cause notice and the subsequent demand order were erroneously issued against the deceased, despite the department being aware of his demise and the cancellation of the GST registration. Consequently, the Allahabad High Court allowed the writ petition, setting aside the order dated November 17, 2023, while granting the respondents the liberty to initiate fresh proceedings in accordance with the law.
