Section 93 GST: Notices and Tax Determination Cannot Be Issued Against Deceased Proprietor; Must Target Legal Representative

HC held that Section 93 of the GST Act does not permit issuance of a show-cause notice or tax determination against a deceased proprietor; liability arises only against the legal representative where business continues or is discontinued, and therefore notices and determination must be issued to the legal representative after affording opportunity to respond. The notice and determination issued solely against the deceased were invalid. Impugned order set aside and petition allowed.

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1. ISSUES PRESENTED AND CONSIDERED

1. Whether a show cause notice and subsequent determination under Section 73 of the Goods and Services Tax Act can validly be issued and framed in the name of a deceased person.

2. Whether Section 93 of the Act authorises issuance of proceedings or determination against a deceased person, or permits recovery without first issuing notice to the legal representative.

3. If proceedings are initiated or determination made after death of the registered person, what is the requisite procedure for holding the legal representative liable and for valid recovery of tax, interest or penalty.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Validity of issuing show cause notice and making determination against a deceased person

Legal framework: Section 73 of the Act authorises show cause notices and determination of tax, interest or penalty. Section 93 sets out special provisions regarding liability where a person liable to pay tax dies, dealing with liability of legal representatives where business is continued or discontinued.

Precedent Treatment: No earlier authority was invoked or applied by the Court from the record; the Court proceeded on statutory construction and facts.

Interpretation and reasoning: The Court examined the text of Section 93 and the chronology of events. It found that the show cause notice, reminders and the tax determination were all undertaken after the proprietor's death. Section 93 addresses who is liable to pay tax after a person's death (legal representative if business continued or estate if discontinued) but contains no provision permitting the tax determination itself to be made in the name of a dead person. The Court reasoned that determination against a deceased person is inconsistent with the statutory scheme because the liability post-death, under Section 93, is a liability of the legal representative or estate and not of the decedent.

Ratio vs. Obiter: Ratio - A determination of tax and the underlying show cause notice cannot be validly issued in the name of a deceased person; proper proceedings must be directed to the legal representative or estate in accordance with Section 93.

Conclusion: The proceedings and determination made in the name of the deceased are invalid and cannot be sustained.

Issue 2 - Scope and effect of Section 93: whether it authorises determination against the deceased or prescribes procedure for notice to legal representative

Legal framework: Section 93(1)(a)-(b) describes liability of legal representative where business continues and liability of legal representative to the extent of estate where business is discontinued, expressly covering taxes determined before or after death.

Precedent Treatment: No precedents were relied upon; the Court interpreted Section 93 on its face.

Interpretation and reasoning: The Court held that Section 93 contemplates post-death liability of specified persons (legal representative or estate) but does not empower authorities to proceed against the deceased. The provision therefore presupposes that the legal representative is the appropriate addressee of compliance steps once the taxpayer is dead. From this, the Court drew a necessary procedural implication: where liability after death is to be fixed or recovered, notice must be issued to the legal representative and determination undertaken after affording the legal representative an opportunity to respond.

Ratio vs. Obiter: Ratio - Section 93 does not authorise framing of show cause notices or determinations in the name of a deceased person; it requires that proceedings be addressed to the legal representative (or estate) in accordance with the statutory allocation of liability.

Conclusion: Section 93 restricts liability to legal representatives or estate but does not validate determination in the name of the deceased; authorities must issue notice to the legal representative before determining or recovering tax, interest or penalty.

Issue 3 - Procedural consequences and remedy where determination was made against deceased without notice to legal representative

Legal framework: Principles implicit in Sections 73 and 93 concerning determination and recovery, read together with the rule that proceedings must be validly initiated against the correct legal entity or person.

Precedent Treatment: No separate case law referenced; the Court applied statutory interpretation and settled procedural fairness principles.

Interpretation and reasoning: Because the show cause notice and determination were addressed to the deceased and not to the legal representative, the proceedings were defective. The Court reasoned that issuing proceedings in the name of a dead person effectively deprives the legal representative of the opportunity to be heard and to defend the estate, contrary to the allocation of post-death liability under Section 93. That defect rendered the determination unsustainable.

Ratio vs. Obiter: Ratio - Determinations and recoveries made after death without issuing notice to the legal representative are infirm; such orders are liable to be quashed, although the department retains the power to reinitiate proceedings against the legal representative or estate in accordance with law.

Conclusion: The impugned determination is quashed and set aside. The revenue may institute appropriate proceedings afresh directed at the legal representative or estate, following statutory procedure and giving opportunity to be heard.

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