GST notices against a non-existent partnership firm are unsustainable; liability must be pursued against statutorily liable persons.

Show cause notices issued in the name of a partnership firm after its discontinuance were held legally unsustainable because the firm had ceased to exist on the death of a partner. The court noted that, under section 94 of the Uttar Pradesh GST Act, 2017, tax liability on dissolution or discontinuance must be worked out against the persons responsible at the time of discontinuance, including partners and, where applicable, the legal heirs of a deceased partner. Proceedings against a non-existent firm could not be continued in that form, and any fresh action had to be taken against the statutorily liable persons in accordance with law.

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Issues: Whether the show cause notices and consequential order could be sustained when they were issued to a firm that had ceased to exist upon the death of one partner.

Analysis: The petition concerned a partnership firm in which one partner had died during the Covid period, a fact that had already been brought to the notice of the authorities. The proceedings were initiated against the firm after its discontinuance. Section 94 of the Uttar Pradesh Goods and Services Tax Act, 2017 was relied upon to note that, upon dissolution or discontinuance, tax liability is to be worked out against the persons responsible at the time of discontinuation, including the partners and, to the extent applicable, the legal heirs of the deceased partner. On that basis, the notices issued in the name of the non-existent firm were held to be legally unsustainable.

Conclusion: The show cause notices and the impugned order were invalid and liable to be quashed, with liberty to proceed against the petitioner and other legal heirs in accordance with law.

Final Conclusion: Proceedings cannot be continued against a firm after its discontinuance in the manner adopted here, and any fresh action must conform to the statutory mode of proceeding against the persons liable.

Ratio Decidendi: A tax proceeding issued against a firm that has ceased to exist is not sustainable, and liability after dissolution must be pursued against the statutorily liable persons in the manner provided by law.

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