[Opinion] GST Notice to a Deceased Person | Understanding Section 93 of the GST Act and Related Legal Interpretations

Prateek Mitruka – [2024] 167 taxmann.com 176 (Article)

The recent judgment by the Delhi High Court in the case of SK Gupta and Company sheds light on the legal framework concerning the issuance of GST notices to deceased taxpayers and the recovery of dues in such cases. This article explores the intricacies of Section 93 of the GST Act and provides an analysis of the case, discussing the implications of serving notices on deceased persons and the liability of legal representatives.

1. Key Provisions of Section 93 of the GST Act

Section 93 of the GST Act governs situations where a taxpayer, who is liable to pay tax, interest, or penalties, passes away. The provision outlines two distinct scenarios:

Continuance of Business after Death: If the business of the deceased person is continued after their death, either by the legal representatives or any other person, then the tax liabilities (including interest and penalties) of the deceased taxpayer become the responsibility of the person continuing the business.

Discontinuation of Business: In cases where the business is discontinued upon or before the taxpayer’s death, the liability to pay tax, interest, and penalties is transferred to the legal heirs. However, the liability is limited to the extent of the assets inherited by the legal heirs from the deceased taxpayer.

2. Reproduction of Section 93 of the GST Act

Here’s the verbatim reproduction of Section 93(1) of the GST Act:

“(1) ……., 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 the 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.”

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