GST Demand Against Deceased Proprietor Set Aside by Allahabad High Court

The writ petition was filed by the widow of a deceased sole proprietor challenging a demand order dated 25.02.2025 passed under Section 73 of the Uttar Pradesh GST Act, 2017, raising a demand of Rs. 1,60,356.80 in the name of her late husband. The proprietor had died on 26.04.2021, and the GST registration of the firm had already been cancelled.

The Department issued a show cause notice dated 30.11.2024 after knowing about his death through the GST portal. Since the notice was issued posthumously and uploaded on the portal, it remained unanswered, leading to the impugned demand order.

Issue Before HC: Whether tax proceedings under Section 73 of the UP GST Act can be validly initiated and concluded against a deceased proprietor without issuing notice to the legal representative, by invoking Section 93 of the Act.

HC’s Ruling: The Hon’ble High Court allowed the writ petition and quashed the impugned demand order. The Court held that Section 93 of the UP GST Act only creates liability on legal representatives to pay tax, interest or penalty due from a deceased person, but it does not authorise initiation or determination of tax proceedings against a dead person.

The Court observed that issuance of a show cause notice to the legal representative is a sine qua non for any valid determination after the death of a proprietor. In given case, the show cause notice and the order were both issued in the deceased’s name without notice to the legal heir, the entire proceedings were held to be invalid.

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