Legal Representatives Must Prove Business Continuation to Sustain Tax Proceedings Against Deceased's Registered Enterprise Under GST Rules

The HC allowed a writ petition challenging a GST tax order, finding no evidence that the legal representative continued the deceased's business under the same registration. The court set aside the tax liability order, ruling that proceedings cannot be initiated against a deceased person without proof of business continuation by the legal representative.

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The Jharkhand High Court, through Chief Justice M. S. Ramachandra Rao and Justice Rajesh Shankar, allowed the writ petition challenging the order dated 28.11.2022 passed under section 93(1)(a) of the CGST Act, 2017. The petitioner's deceased father, Navtej Kumar Shangari, had a GST registration which was cancelled posthumously. The petitioner obtained a fresh registration on 24.03.2018 for the same proprietary concern. Despite this, the 3rd respondent held the petitioner liable for GST dues of the father's firm, asserting that a legal representative continuing the business is liable for tax, interest, and penalty.The Court emphasized the absence of any material evidence demonstrating that the petitioner continued the deceased's business under the old registration after obtaining a new registration. It held that "the impugned order dt. 28.11.2022 is perverse, based on no evidence and cannot be sustained." Consequently, the order was set aside, affirming that proceedings cannot be initiated against a deceased person and liability does not automatically transfer without proof of business continuation by the legal representative under the same registration.

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