GST Proceedings Can’t Initiated Against Deceased Sole Proprietor: Allahabad HC

The Allahabad High Court has set aside GST proceedings initiated against a deceased sole proprietor, holding that issuance of a show cause notice and passing of an adjudication order against a dead person is legally unsustainable. The bench of Justice Vikas Budhwar clarified that while tax dues may be recoverable from legal heirs in terms of Section 93 of the GST law, the determination itself must follow due process and be initiated against the legal representatives, not the deceased assessee. The writ petition was filed by M/s P.B. Sethi Plastics, a sole proprietorship firm earlier registered under the U.P. GST regime. The firm’s sole proprietor, Buldeo Raj Sethi, passed away on 21 July 2020. Following his death, an application was filed for cancellation of GST registration, which was allowed in October 2020. Despite this, the State tax authorities issued a show cause notice dated 21 September 2023 and subsequently passed an order dated 20 December 2023 under Section 73 of the U.P. GST Act / CGST Act for the financial year 2017–18, raising tax liability against the firm. The proceedings were initiated in the name of the deceased proprietor. The legal heir challenged the adjudication order before the appellate authority. However, the appeal was dismissed on 26 June 2025 on the ground of limitation, prompting the petitioner to approach the High Court. The core question before the Court was whether GST proceedings under Section 73 could be validly initiated and concluded against a deceased sole proprietor, and whether the appellate authority was justified in dismissing the appeal on limitation without addressing this foundational jurisdictional defect. The petitioner contended that the firm being a sole proprietorship, proceedings could not continue once the sole proprietor had expired. Issuance of a show cause notice and adjudication order against a dead person was void ab initio. Any action, if at all permissible, ought to have been initiated against the legal heirs, after giving them an opportunity of hearing. Since the GST registration had already been cancelled, it was not humanly possible for the legal heir to have knowledge of the adjudication order until much later, and therefore the appellate authority erred in rejecting the appeal on limitation. Reliance was placed on a Division Bench judgment of the Allahabad High Court in Amit Kumar Sethia v. State of U.P., which had examined Section 93 of the GST Act in a similar context. The department argued that under Section 93 of the GST Act, legal heirs are liable to discharge tax dues of the deceased, and therefore the proceedings could not be said to be illegal. It was also contended that the legal heir should have exercised due diligence to ascertain pending liabilities. The court after examining the record, observed that the facts were undisputed: the proprietor had died in July 2020, the GST registration had been cancelled thereafter, yet proceedings under Section 73 were initiated in September 2023 and concluded in December 2023 against the deceased. Relying on the earlier Division Bench ruling, the Court reiterated that Section 93 only deals with liability to pay tax and does not authorise determination of tax liability against a dead person. For a valid determination, issuance of a show cause notice to the legal representative is a sine qua non. The Court further held that the appellate authority committed a patent error by dismissing the appeal on limitation without examining the fundamental illegality of proceedings being conducted against a deceased person. Allowing the writ petition, the High Court quashed the adjudication order dated 20 December 2023 passed under Section 73 of the GST Act, set aside the appellate order dated 26 June 2025 rejecting the appeal on limitation. The court clarified that the quashing of orders would not preclude the tax authorities from initiating fresh proceedings in accordance with law, after following due process against the legal heirs, if permissible. Case Details Case Title: M/S P.B. Sethi Plastics Versus State of UP Case No.: Writ Tax No. - 357 Of 2026 Date: 04/02/2026 Counsel For Petitioner: Pooja Talwar Counsel For Respondent: C.S.C. Click Here To Read Order Read More: Past Allegations Can Be Considered Despite Quashed Charge Sheet: Allahabad High Court Upholds Compulsory Retirement of IRS Officer

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