GST registration cancellation u/s73 against deceased proprietor held void; fresh proceedings allowed against legal heirs.

Proceedings under s.73 were challenged on the ground that the show cause notice and consequential cancellation order were issued against a deceased proprietor. Applying the settled principle that legal proceedings cannot be initiated or continued against a dead person, the HC held that action could be taken only by properly proceeding against the legal representative/heirs in accordance with law; since the authorities failed to do so, the proceedings were void ab initio from the SCN stage. The SCN and the impugned order were quashed, with liberty to the authorities to initiate fresh proceedings against the petitioner in accordance with law.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether a show cause notice and consequential ex parte tax determination under the U.P. GST Act can validly be initiated and passed against a person who had already died, particularly when the department had knowledge of the death and the registration had been cancelled on that basis.

(ii) Whether such proceedings, initiated against the deceased instead of the legal representative/heir, are liable to be quashed in entirety, while leaving liberty to the authorities to proceed afresh in accordance with law against the legal representative/heir, if so advised.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Validity of initiation and determination against a deceased person

Legal framework: The Court examined proceedings stated to have been taken under the U.P. GST Act, including issuance of show cause notice and passing of an ex parte order determining liability. The Court applied the principle (as adopted in its reasoning) that proceedings for determination cannot be initiated or continued against a deceased person; the Court treated it as inherent that such proceedings must be directed against the legal representative/heirs where permissible.

Interpretation and reasoning: The Court found it undisputed on the record that the proprietor had died prior to issuance of the show cause notice and prior to the ex parte order. It also noted that the registration had been cancelled after an application indicating death, and that despite such knowledge, the authorities proceeded to upload the show cause notice and order on the portal, resulting in the legal heir not being aware and no effective participation. On these facts, the Court held that initiating proceedings against a dead person is legally impermissible, and that the proper course-if any proceeding was to be taken-was to proceed in a proper manner against the legal representative/heirs of the deceased proprietor.

Conclusion: The show cause notice and the ex parte determination order, having been issued and passed against a deceased person and not against the legal representative/heir, were held unsustainable in law.

Issue (ii): Relief-quashing of proceedings and liberty to proceed afresh

Legal framework: The Court adopted and followed the principle laid down in the relied-upon precedent as part of its reasoning: where proceedings are wrongly initiated against a deceased person without issuing notice to the legal representative and seeking response, the determination cannot be sustained; however, the authorities retain liberty to initiate appropriate proceedings in accordance with law against the legal representative/heir.

Interpretation and reasoning: Since the foundational defect existed from the stage of the show cause notice itself, the Court treated the entire chain of proceedings as vitiated. At the same time, the Court clarified that the defect did not foreclose lawful action; rather, it only required that any action be taken against the appropriate person (legal representative/heir) in accordance with law.

Conclusion: The Court quashed and set aside the impugned show cause notice and the consequential order, and allowed the writ petition, while granting liberty to the respondent authorities to proceed against the petitioner (as legal heir) in accordance with law, if so advised.

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