Tax Dispute: Issue on Deceased's Liability

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🔖SCN & GST Demand on Deceased Person Quashed ❌ as Void ab Initio by Allahabad High Court⚖️ in Amit Kumar Sethia vs State of Uttar Pradesh (WRIT TAX No. - 917 of 2025; 02-Apr-2025) Issue: Whether the Department can issue a SCN and pass an order of tax determination against a deceased person without notice to the legal representative.

Facts of the Case 🗓️: • 20-Apr-2021: Proprietor (Assessee) passed away. • 02-Jun-2021: GST registration of the firm cancelled w.e.f. 13-May-2021. • 13-Sep-2023: Department issued a show cause notice (SCN) under Section 73 in the name of the deceased. • 17-Oct-2023 & 31-Oct-2023: Reminders to the SCN issued. • 17-Nov-2023: Assessment order passed under Section 73(9) demanding ₹21,49,585.60 from the deceased Assessee.

Assessee's Argument: 📌 Proceedings are void as the SCN and order were issued in the name of a dead person. 📌 Legal representative was not served any notice; hence, principles of natural justice violated.

Department’s Argument: 📌 Cited Section 93, stating tax can be recovered from legal heirs even if determined after death.

Court Judgment: 📌 Section 93 only enables recovery from legal heirs after a valid determination. 📌 Law does not permit tax determination against a deceased person. 📌 Proper notice must be issued to the legal representative before any such proceeding. ✅ Conclusion: Demand order dated 17-Nov-2023 is quashed as void ab initio. Department may initiate fresh proceedings in accordance with law.

🔑 Key Takeaways: • A SCN issued in the name of a deceased person is legally unsustainable. • Section 93 only enables recovery after valid determination from legal heirs. • Legal representatives must be served notice for continuation of any proceedings. • Department is free to initiate fresh proceedings against legal heirs per law. • Upholds principle of audi alteram partem and natural justice.