S. 93 GST Act Does Not Empower Authorities to Make Tax Determination against Dead Assessee: Allahabad HC [Read Order]

The Allahabad High Court has held that Section 93 of the Goods and Services Tax Act, 2017 does not empower the authorities to make determination of tax against a dead person and recover the same his legal representatives.

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The petitioner, Amit Kumar Sethia, passed away on April 20, 2021, and his firm's registration was revoked on May 13, 2021. But on September 13, 2023, a notice was sent in the petitioner's name under Section 73 of the GST Act. The notice and reminders were posted on the portal even though the firm's registration was canceled. On November 17, 2023, an order was issued under Section 73 after the petitioner's heirs failed to submit a response.

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Petitioner's attorney contested the demand order, claiming that no notice could have been sent in the petitioner's name because the Department knew of his passing. Such proceedings were deemed null and void ab initio.

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According to the bench of Chief Justice Arun Bhansali and Justice Kshitij Shailendra, who read Section 93 of the Act, the provision addresses the obligation to pay taxes, interest, or penalties in situations where the business is discontinued or carried on by the legal representative after the death. It does not address the question of whether a determination against a deceased person can be made at all, and it does not permit the determination to be made against a deceased person and recovery of it from the legal representative.

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Since Section 93 allows for actions against attorneys in cases where a business continues to operate after the death of the firm's owner, the Court determined that giving the attorney a show-cause notice is a must and that a decision can only be made after requesting an answer from the attorney.

According to Section 93 of the Goods and Services Tax Act of 2017, the business owner is responsible for paying taxes upon their passing. Section 93(1)(a) states that any taxes, interest, or penalties due to the owner under the Act must be paid by the legal representative of a business that continues after the owner's death.

Accordingly, the court set aside the determination made against the dead person without issuing a notice to legal representatives.

To Read the full text of the Order CLICK HERE

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