Proceedings Void Where Department Took No Section 93 Steps After Proprietor’s Death: GSTAT Thiruvananthapuram

The GST Appellate Tribunal’s Thiruvananthapuram Bench quashed an ITC demand against a deceased pharmaceuticals dealer, finding no notice to the legal heir or inquiry into the estate, and upheld the credit on merits.

The GST Appellate Tribunal, Thiruvananthapuram, has held that where a sole proprietor dies and the business is discontinued, the Department must proceed under Section 93(1)(b) of the CGST/KGST Act against the legal heir and the inherited estate, failing which the proceedings are without jurisdiction. The Bench of Subramanya Rayaprol, Vice-President, who wrote the order, and Ramamoorthi Sriram, Member (Technical), allowed the appeals filed by the legal heir [Ben Medicals v. Commissioner of Kerala State GST, 2026-juristway.com-3219-GSTAT(Thiruvananthapuram)-GST].

The proprietor, a dealer in pharmaceuticals, was alleged to have availed excess ITC of ₹1,12,264 for 2017-18 on a comparison of GSTR‑3B with GSTR‑2A. He explained that his suppliers had reported the sales as B2C instead of B2B. The demand was confirmed on 27 Jun 2022 and upheld in first appeal on 26 Nov 2022. He died in December 2022, the business was discontinued, and his son filed the second appeal as legal heir.

The Department argued that the burden of proving ITC lay on the appellant under Section 155 and that no invoice-wise reconciliation had ever been produced. It added that Circular No. 183/15/2022-GST, issued on 27 Dec 2022, post-dated both orders.

The Bench found that no effort had been made to find out whether the deceased left any estate, and no notice had been sent to the legal heir. Relying on rulings of several High Courts and its own decision in Vijayan Sahadevan Vs The Commissioner of Keralam State GST (Final Order No. 03/TVP/Kerala/2026), it held that recovery from a legal heir in a discontinued business is confined to the inherited estate and requires proceedings directed at the heir.

On merits, the Bench accepted supplier certificates confirming payment of tax and the B2C reporting error, noting that the Revenue had not countered them. It held the proceedings against the deceased taxpayer “illegal and without jurisdiction”, quashed the order-in-appeal dated 26 Nov 2022, and allowed the appeals with consequential relief.

2026-juristway.com-3219-GSTAT(Thiruvananthapuram)-GST