Upmanyu Kattha Industries Vs State of U.P. and Anr
Date: January 8, 2025
Court: High Court
Bench: Allahabad
Type: Writ Petition
Subject Matter
Assessments carried out against an individual who was deceased cannot be maintained. Fresh notice to be issued to legal heir.
Summary
The case revolves around a petition challenging an ex parte assessment order issued by tax authorities against a firm after the death of its proprietor, Shri Shishir Awasthi. The proprietor passed away on December 25, 2023, and his GST registration was canceled effective January 31, 2024. However, a show cause notice was issued on February 12, 2024, and multiple reminders were sent thereafter, leading to an assessment order passed on September 20, 2024. The new proprietor, Mallika Awasthi (the widow of the deceased), argued that the assessment against the deceased was invalid and that she was denied the right to a personal hearing. The court observed that the assessments carried out against an individual who was deceased could not be maintained, but acknowledged that Mallika, as the legal heir and new proprietor, was entitled to a hearing. The court ruled in favor of the petitioner by setting aside the ex parte assessment order and directed the tax authorities to issue a fresh notice to Mallika Awasthi and to conduct proceedings in accordance with the law. The judgment highlighted the necessity for adhering to due process in GST assessments, particularly when it involves the death of a registered taxpayer. The petition was ultimately disposed of, emphasizing the importance of procedural compliance in tax administration.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. This petition is directed against order dated 20.09.2024 passed by respondent No. 2 under Section 74 of the Central Goods and Services Tax Act, 2017 for assessment year 2020-21, however, prayer has been made that the respondent No. 2 be directed to issue a fresh notice and give opportunity of personal hearing to the successor proprietor/petitioner and to pass a fresh order thereafter.
2. Submissions have been made that the petitioner-firm had its proprietor Shri Shishir Awasthi, who died on 25.12.2023 and on an application made, the registration with the GST was cancelled on 16.02.2024 with effect from 31.01.2024, however, the notice was issued on 12.02.2024 and reminders were issued on 23.07.2024, 24.08.2024 and 09.09.2024 and ultimately, the ex parte assessment was passed on 20.09.2024.
3. Submissions have been made that once the proprietor had died on 25.12.2023 and the registration was cancelled with effect from 31.01.2024, the show cause notice dated 12.02.2024 could not have been issued to the deceased and the reminders issued on 23.07.2024, 24.08.2024 and 09.09.2024 were equally barred. Further submissions have been made that petitioner, the new proprietor of the firm, wife of the deceased, got a fresh registration on 02.01.2024 with effect from 29.12.2023 and is continuing the same firm.
4. Submissions have been made that the passing of the ex parte order, the liability whereafter essentially would fall on the petitioner, without affording any opportunity of hearing to the petitioner is not justified and therefore, the same be set aside. The petitioner being successor in law as well as proprietor of the firm is prepared to appear before the authorities in response to the show cause notice and they may be directed to take action in accordance with law.
5. Learned counsel for the respondent though submitted that the registration was cancelled on 15.03.2024 and that the petitioner had herself accessed the portal with the same GSTIN on 28.11.2024 and made submission on 16.02.2024 and therefore, it cannot be said that she was unaware of issuance of show cause notice and therefore, the petition deserves dismissal.
6. We have considered the submissions made by learned counsel for the parties and have perused the material available on record.
7. Undisputed facts are that the petitioner-firm is a proprietorship firm and its proprietor – Shri Shishir Awasthi had died on 25.12.2023, before the issuance of the show cause notice dated 12.02.2024 and the subsequent reminders, which were also issued, apparently, after the effective date of cancellation of the registration in the name of Shishir Awasthi, i.e., 31.01.2024 and in those circumstances, the assessment essentially has been made against a dead person and therefore, the same could not be sustained. However, as the petitioner has succeeded as an heir as well as a proprietor of the said firm and has prayed for being afforded opportunity of hearing in this regard, the order dated 21.09.2024 (Annexure No. 1) passed by respondent No. 2 for assessment year 2020-21 is set aside.
8. The respondents may issue a fresh show cause notice to the petitioner-firm with Mrs. Mallika Awasthi as its proprietor and legal heir of late Shri Shishir Awasthi and take appropriate proceedings in accordance with law.
9. With the above observations, the petition stands disposed of.