Legal Notice to Deceased Taxpayer Invalidated: Procedural Error Requires Proper Service to Legal Representative Under Section 93

HC found the Show Cause Notice (SCN) issued to a deceased taxpayer invalid. The court ruled that SCN must be served to legal representative or current business operator under Section 93 of CGST Act. Since the notice was addressed to a non-existent person, it was set aside, allowing respondents to issue a proper notice to the appropriate party continuing the business.

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Issues:
1. Impugning a Show Cause Notice issued under the Central Goods and Services Tax Act, 2017 to a deceased taxpayer.
2. Interpretation of Section 93 of the CGST Act regarding liability to pay tax, interest, or penalty in cases of a deceased taxpayer.
3. Validity of issuing a Show Cause Notice to a deceased taxpayer instead of their legal representative.

Analysis:
The High Court addressed the issue of impugning a Show Cause Notice (SCN) issued under the Central Goods and Services Tax Act, 2017 to a deceased taxpayer. The petitioner, the widow of the deceased taxpayer, challenged the SCN issued to the sole proprietorship concern of the deceased. The respondents argued that the petitioner, as the widow carrying on the business, is liable for any outstanding amounts under Section 93 of the CGST Act. The court noted that the identity of a sole proprietorship concern is not separate from the sole proprietor. Since the deceased sole proprietor received the SCN, who is non-existent, the court emphasized that the notice should have been issued to the legal representative or the person carrying on the business.

Regarding the interpretation of Section 93 of the CGST Act, the court highlighted the provisions related to the liability to pay tax, interest, or penalty in cases of a deceased taxpayer. The section specifies that if a business is continued after the taxpayer's death by their legal representative or another person, that individual is liable to pay any outstanding amounts. However, the court emphasized that the SCN for recovery should be issued to the legal representative or the person carrying on the business, not to the deceased taxpayer.

The court referred to a judgment by the Madras High Court, emphasizing that an order passed against a deceased person is legally invalid. The court cited the need for the Department to proceed under Section 93 of the Act against the legal representative if they are carrying on the deceased person's business. Consequently, the High Court set aside the impugned SCN, clarifying that the respondents can issue a notice to the legal representative or another person if they are found to be carrying on the deceased taxpayer's business. The petition was disposed of accordingly, and any pending applications were also resolved.

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