The answer for the question is in Section 93 of CGST Act,2017. It explains how tax dues are handled after a taxpayer’s death, making legal heirs responsible for clearing them. If the business is carried on, the legal heir or successor must pay any pending taxes.

Complete GST Act & Rules with amendments made by financial bill, 2025 - CLICK HERE

What is the Need of Section 93?

Section 93 of the Act ensures that the tax dues do not go unpaid when there is a change in a taxpayer’s legal status or structure. It helps to prevent any loss of revenue after the taxpayer's death or a business is dissolved. It clearly defines who will become responsible for those dues, whether it’s legal heirs,business partners or beneficiaries.

The law holds someone responsible for paying the taxes even if the original taxpayer is no longer living. Additionally, it creates a clear and uniform legal framework for such circumstances by working in accordance with the Insolvency and Bankruptcy Code.

Situations Covered Under Section 93

S.93 of the Act covers four different scenarios. A) Section 93(1) of the GST Act states that:

“Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, where a person, liable to pay tax, interest or penalty under this Act, dies, then

(a) if a business carried on by the person is continued after his death by his legal representative or any other person, such legal representative or other person, shall be liable to pay tax, interest or penalty due from such person under this Act; and

(b) if the business carried on by the person is discontinued, whether before or after his death, his legal representative shall be liable to pay, out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax, interest or penalty due from such person under this Act, whether such tax, interest or penalty has been determined before his death but has remained unpaid or is determined after his death.”

In simple terms the S.93(1) deals with two different situations:-

1. If the Business continues after death

If someone takes over the business of a person who has passed away, that person must also take on the responsibility of paying any pending tax, interest, or penalties left behind by the deceased.

2. If the Business Discontinued

If the business is shut down, whether before or after the person’s death, the legal representative must clear any pending taxes from the assets left behind. But this responsibility only goes as far as the value of the estate

B) Section 93(2) of the GST Act states that:

“ Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, where a taxable person, liable to pay tax, interest or penalty under this Act, is a Hindu Undivided Family or an association of persons and the property of the Hindu Undivided Family or the association of persons is partitioned amongst the various members or groups of members, then, each member or group of members shall, jointly and severally, be liable to pay the tax, interest or penalty due from the taxable person under this Act up to the ime of the partition whether such tax, penalty or interest has been determined before partition but has remained unpaid or is determined after the partition.”

In simple terms this section 93(2) says that when a Hindu Undivided Family or an Association of Persons is divided, every member is responsible together and individually for paying any tax, interest or penalties that were due up to the date of partition.

This applies whether those dues were already decided but not paid, or if they are calculated later. This rule makes sure that taxes cannot be avoided just by splitting up the group, as everyone shares the responsibility

C) Section 93 (3) of the GST Act says that “Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, where a taxable person, liable to pay tax, interest or penalty under this Act, is a firm, and the firm is dissolved, then, every person who was a partner shall, jointly and severally, be liable to pay the tax, interest or penalty due from the firm under this Act up to the time of dissolution whether such tax, interest or penalty has been determined before the dissolution, but has remained unpaid or is determined after dissolution.”

This Section cases where a firm is dissolved. If that happens, all the people who were partners in the firm while it was running are responsible together and individually for paying any unpaid tax, interest or penalties.

This responsibility covers amounts decided before the firm closed as well as those assessed afterward. The idea is to make sure government dues are not left unpaid just because the business has been dissolved

D) Section 93 (4) of the GST Act

“Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, where a taxable person liable to pay tax, interest or penalty under thisAct,

(a) is the guardian of a ward on whose behalf the business is carried on by the guardian; or

(b) is a trustee who carries on the business under a trust for a beneficiary, then, if the guardianship or trust is terminated, the ward or the beneficiary shall be liable to pay the tax, interest or penalty due from the taxable person upto the time of the termination of the guardianship or trust, whether such tax, interest or penalty has been determined before the termination of guardianship or trust but has remained unpaid or is determined thereafter.”

This section deals with situations where a business is run by a guardian for a ward or by a trustee for a beneficiary. When the guardianship or trust ends, the ward or beneficiary must take responsibility for any tax, interest, or penalties that were due up to that point.

This applies whether those dues were worked out before or after the guardianship or trust came to an end.

All-in-One Manual with Updated GST Laws & Provisions, CLICK HERE

Procedure for Handling Tax Recovery in Case of Death

When a taxpayer passes away, the tax department must follow a proper process. First, it should confirm the death before starting any proceedings. Then, it needs to identify the legal heirs or representatives, especially if they are managing the business or estate.

Notices under the relevant GST sections, like 73 or 74, should be sent to these legal heirs, clearly stating their role and responsibility under Section 93. If the business has been discontinued, the recovery should be limited to the value of the estate left by the deceased. This approach ensures the recovery is lawful and does not unfairly burden the legal heirs.

Role of IBC in Section 93 Each part of Section 93 starts with the phrase “Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016.” This means that if the IBC applies, its rules will take priority over Section 93.

So, when insolvency proceedings are initiated, tax dues will be handled according to the IBC’s process for distributing the debtor’s assets, not under the usual rules of Section 93.

Judicial Rulings

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

Amit Kumar Sethia vs State of U.P. and another CITATION : 2025 TAXSCAN (HC) 534

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.

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.

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.

S.93 GST Act Does not Permit to Determine Demand Against Deceased and Recovery from Legal Heir: Allahabad HC

M/S Atishay Traders vsState of U.P. CITATION : 2025 TAXSCAN (HC) 957

The Allahabad High Court has held that GST ( Goods and Services TAx ) proceedings cannot be initiated or continued against a deceased person under the Goods and Services Tax Act, 2017.

The court categorically held that while Section 93 permits recovery from the estate of the deceased, it does not authorize the determination of tax liability against a deceased individual.The Court stated that initiating proceedings in the name of a dead person is a legal nullity and violative of natural justice.

It further clarified that determination of liability, if any, must be preceded by a valid show cause notice issued to the legal representative, who must be given an opportunity to be heard before any adverse order is passed.Accordingly, the High Court allowed the writ petition, quashed the impugned order, and granted liberty to the tax authorities to initiate appropriate proceedings in accordance with law, this time against the legal heir, if so advised.

Manager Continues Business Post-demise of Proprietor: Madras HC Refuses to quash S. 74 GST Order, Says S. 93 Liability May Arise

Tvl. Vairam AgenciesVodafone Cell vs The State Tax Officer CITATION : 2025 TAXSCAN (HC) 1544

The Madurai Bench of the Madras High Court has refused to interfere with a GST ( Goods and Services Tax ) assessment order issued under Section 74 of the GST Act, 2017, as the manager continued business despite the demise of the proprietor.

While refusing to quash the assessment order, the Court acknowledged the peculiar facts of the case and indicated that tax liability could be fastened under Section 93 of the GST Acts, which deals with tax dues in which business continued to operate even after the death of a proprietor.

Further, the Court granted liberty to the petitioner to pursue the appellate remedy under Section 107 of the Act, subject to statutory pre-deposit conditions, and directed the Appellate Authority to consider such appeal on merits if filed within 30 days.

Practical Case Studies in Forensic Accounting & Corporate Fraud Investigation - CLICK HERE

GST Assessment on a Deceased Person is Void Ab Initio: Allahabad HC

Samban Pharma vs DeputyCommissioner CITATION : 2025 TAXSCAN (HC) 1412

The Allahabad High Court has delivered that any tax determination made against a person who is already deceased is invalid from its inception. The court clarified that while legal heirs are liable for the tax dues of a deceased individual, the assessment proceedings cannot be initiated or concluded in the name of the dead person. It is a fundamental requirement that any show-cause notice must be issued to the legal representative, providing them an opportunity to be heard before any liability is fixed.

The division bench, comprising Justice Shekhar B. Saraf and Justice Praveen Kumar Giri, observed that since the notice was issued and the determination was made against a dead person without bringing the legal representative into the proceedings, the order could not be sustained in the eyes of the law.

While quashing the order, the court granted the respondents the freedom to initiate appropriate proceedings afresh, but strictly in accordance with the procedure established by law.

GST Notice must be Issued to Legal Representative before Determination of Tax Liability Post-Death of Proprietor: Allahabad HC

M/s Agarwal Khilona Bazarvs State of U.P. and another CITATION : 2025 TAXSCAN (HC) 940

The Allahabad High Court has ruled that no GST (Goods and Services Tax) notice must be issued to the legal representative before determining the tax liability post-death of the proprietor as it is established that demand against a deceased in void ab initio. The representative must be informed before determining the demand.

The Court observed that “Once the provision deals with the liability of a legal representative on account of death of the proprietor of the firm, it is sine qua non that the legal representative is issued a show cause notice and after seeking response from the legal representative, the determination should take place.”

Accordingly, the High Court quashed the order and allowed the writ petition. However, it granted liberty to the tax department to initiate appropriate proceedings afresh, in accordance with law, after issuing due notice to the legal representative.

Complete Referencer of GSTR-1, GSTR-1A, GSTR-3B, GSTR-9 & GSTR-9C - CLICK HERE

Conclusion

Section 93 of the Act helps the government collect unpaid taxes in situations like death, dissolution of a firm,partition or the end of trust or guardianship. It's useful for legal heirs, business partners and others to know these rules , especially while planning succession or shutting down a business.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates