Issuing Show Cause Notice to Deceased Proprietor Is Invalid Under Section 93 Without Legal Representative's Involvement

The HC held that issuance of a show cause notice (SCN) to a deceased proprietor of a firm is invalid. Section 93 addresses liability for tax, interest, or penalty only where the business continues under the legal representative or is discontinued, but does not authorize determination against a deceased person directly. Liability can be fixed only after issuing an SCN to and obtaining a response from the legal representative. Since the SCN and determination were made against the deceased without involving the legal representative, the HC found the action unsustainable and allowed the petition.

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ISSUES:

Whether a show cause notice and subsequent determination under Section 73 of the Goods and Services Tax Act, 2017 can be issued against a deceased proprietor of a firm.Whether Section 93 of the Goods and Services Tax Act, 2017 authorizes determination and recovery of tax, interest, or penalty from the legal representative of a deceased person without issuing a show cause notice to the legal representative.The procedural requirements for issuing show cause notices and making determinations in cases involving the death of a proprietor.

RULINGS / HOLDINGS:

The court held that the show cause notice and determination issued against the deceased proprietor are void ab initio as the law does not authorize issuance of such notices to a dead person.Section 93 of the Act deals only with the liability of the legal representative to pay tax, interest, or penalty but does not authorize the determination to be made against a deceased person or recovery without issuing notice to the legal representative.The issuance of a show cause notice to the legal representative and an opportunity to respond is a sine qua non before any determination can be made against the legal representative after the death of the proprietor.The order demanding tax raised without issuing notice to the legal representative is unsustainable and is quashed and set aside.

RATIONALE:

The court applied the statutory framework under Section 73 (demand and recovery of tax) and Section 93 (special provisions regarding liability after death) of the Goods and Services Tax Act, 2017.Section 93(1) clarifies that liability to pay tax, interest, or penalty after death lies with the legal representative if the business is continued or discontinued, but it does not confer authority to initiate determination proceedings against the deceased person.The court emphasized that procedural fairness requires that the legal representative be issued a show cause notice and given an opportunity to respond before any determination or recovery is made.No doctrinal shift or dissent was indicated; the judgment reinforces the principle that tax proceedings must be initiated against the correct legal entity or representative.

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