Mudit Gupta Vs State of U.P. And 2 Others (Allahabad High Court)
The Allahabad High Court has ruled that a tax determination made against a deceased individual is invalid, even though their legal heirs are liable for the tax. In the case of Mudit Gupta v. State of U.P. and Others, the petitioner, Mudit Gupta, challenged multiple tax demand orders issued in the name of his deceased mother, Pushpa Gupta. Pushpa Gupta, the proprietor of the firm M/s M.G. Sarees, passed away on June 14, 2021. Her firm’s GST registration was canceled a year later. However, the tax authorities subsequently issued four show-cause notices for financial years ranging from 2017-18 to 2020-21, all addressed to the deceased. As these notices were only uploaded to the common GST portal and the registration was already canceled, they went unanswered, leading to tax demands of over Rs. 68 lakhs against the deceased person.
The petitioner argued that the entire proceedings were void from the start because the tax authorities were aware of his mother’s death and should not have initiated proceedings against a deceased person. The respondents, however, cited Section 93 of the Goods and Services Tax Act, 2017, which holds legal heirs liable for tax, interest, or penalties due from a deceased person. The court examined the provision and concluded that while it does transfer the liability to legal heirs, it does not authorize authorities to determine the tax against a deceased person. The court reasoned that due process requires the tax authority to first issue a show-cause notice to the legal representatives to allow them to respond before making any determination. The court stated that a determination made without notifying the legal heir “cannot be sustained.”
