High Court Upholds Post-Death GST Proceedings Under Section 93:

The case arose from a DGGI investigation into alleged fraudulent availment and passing on of Input Tax Credit and refund of Integrated Goods and Services Tax on the strength of invoices without corresponding supply of goods. The proceedings concerned late Sh. Ankit Dabas, whose residential premises were searched on July 23, 2020, during which cash of Rs 15.40 lakh was found and subsequently placed in a fixed deposit with the State Bank of India.

Ankit Dabas died on May 6, 2021, and the Department was informed of his death in October 2021. Thereafter, on July 31, 2024, a Show Cause Notice was issued to several noticees, including his wife, Jaiwanti, proposing penalties under Section 122(3)(a) of the CGST Act by invoking Section 93 against her as his legal representative. The SCN also proposed appropriation of Rs 15.40 lakh towards the alleged liability. The adjudicating authority subsequently passed an Order-in-Original dated February 1, 2025. While one clause imposed a penalty of Rs 1.50 lakh upon Jaiwanti, another clause stated that no penalty was being imposed upon her, resulting in inconsistency. 

Before the High Court, the petitioner argued that the expression “is determined after his death” in Section 93(1) permitted only completion of proceedings that had already commenced during the deceased's lifetime. It was argued that fresh penalty proceedings could not be initiated against a legal representative more than three years after the death of the alleged wrongdoer. The petitioner also challenged Section 93(1)(b) as arbitrary and violative of Article 14 of the Constitution.

The High Court rejected the petitioner's interpretation of Section 93. It observed that the provision expressly contemplates a liability being “determined after his death” and contains no qualification that proceedings must have been initiated during the deceased's lifetime. The Court held that Section 93 itself provides the statutory authority for determining and, where its conditions are satisfied, enforcing liability attributable to the deceased through the legal representative.

Accordingly, the Court rejected the challenge to the constitutional validity of Section 93(1)(b), holding that the provision was neither discriminatory nor manifestly arbitrary. It also held that the mere lapse of three years after the death did not, by itself, create a bar under Section 93, although the provision did not dispense with any otherwise applicable limitation requirements.

The Court directed that any amount for which no subsisting lawful basis of retention or appropriation is established shall be released to Jaiwanti, as legal representative of the deceased, together with the interest actually earned on the fixed deposit. The writ petition was accordingly disposed of.