GST Authorities Cannot Issue SCN to Dead Person: Delhi HC Rules Notice Void Ab Initio [Read Order]
The Court ruled that a show cause notice issued post-death is invalid in law, though permitting recovery from the estate under the statute.
The Delhi High Court held that a Show Cause Notice issued under the Goods and Services Tax law to a person who has already passed away is void ab initio and cannot give rise to any valid demand. The bench set aside both the notice and the consequent demand order after finding the initiation of proceedings fundamentally defective.
The petition was filed by Harsh Goel, the legal heir of Late Pushkar Goel, who was the proprietor of M/s Nand Plastics Industries. The dispute originated when the Department issued a Show Cause Notice dated 02.12.2023 to the deceased proprietor, even though he had passed away on 21.04.2021. Subsequently, an order dated 19.04.2024 confirmed a GST demand of ₹10,83,044.
Challenging the validity of the proceedings initiated after the death of the taxpayer, the petitioner approached the Court seeking complete quashing of the notice and demand.
Appearing for the petitioner, Puneet Rai and Srishti Sharma argued that the Show Cause Notice under the Central Goods and Services Tax Act, 2017 could not be issued to a person who was no longer alive, rendering the proceedings inherently without jurisdiction. They submitted that since the initiation itself was void, the demand order issued in continuation of such defective proceedings was also liable to be struck down.
The bench of Justice Prathiba M. Singh and Justice Shail Jain held that the issuance of a Show Cause Notice to a deceased individual is legally impermissible. The bench relied on precedents declaring that a notice issued post-death is not tenable in law. As the very foundation of the proceedings, the Show Cause Notice was void, the consequential demand order dated 19.04.2024 also could not survive.
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The Court clarified that this quashing does not prevent the Department from proceeding against the estate of the deceased proprietor in accordance with Section 93(1)(b) of the Central Goods and Services Tax Act, 2017, if such action is otherwise permissible in law.
With these observations, the Show Cause Notice and demand order were set aside.
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