Karnataka High Court
M/S Bsln Ispat vs Assistant Commissioner Of Commercial ... on 21 November, 2025
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
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NC: 2025:KHC:48200
WP No. 19015 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF NOVEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO. 19015 OF 2025 (T-RES)
BETWEEN:
1. M/S BSLN ISPAT
A SOLE PROPRIETORY CONCERN
REP BY MS. PARUL KANSARIA
LEGAL HEIR OF THE DECEASED PROPRIETOR
MR MAHABIR PRASAD
R/AT NO.11186 PRESTIGE SHANTINIKETAN
ITPL MAIN ROAD , WHITEFIELD
BENGALURU-560048
...PETITIONER
(BY SMT. TANMAYEE RAJKUMAR.,ADVOCATE)
AND:
1. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES
Digitally signed
LGSTO-183 OLD RTO BUILDING
by JAI JYOTHI J KIADB INDUSTRIAL AREA
Location: High CHIKKABALLAPURA - 562 101
Court of
Karnataka
2. DEPUTY COMMISSIONER OF COMMERCIAL TAX
(AUDIT) - 5.4, DGSTO-5, ROOM 506
5TH FLOOR, VTK-2 BUILDING
RAJENDRANAGARA
KORMANGALA, BENGALURU-560 047.
...RESPONDENTS
(BY SRI.HEMAKUMAR K. AGA)
THIS WP IS FILED UNDER ARTICLE 226 OF THE
CONSTITUTION OF INDIA PRAYING TO QUASH THE
IMPUGNED ADJUDICATION ORDER BEARING NO.
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NC: 2025:KHC:48200
WP No. 19015 of 2025
HC-KAR
ACCT/LGSTO-183/BOGUSITC/DRC07-2/T-9443/24-25, RFN NO.
MA290225020808U DATED 05.02.2025 (ANNEXURE H1) AND
THE IMPUGNED SUMMARY ORDER BEARING
ZD2902250205889 DATED 05.02.2025 (ANNEXURE NO. H2),
ISSUED BY THE 1ST RESPONDENT UNDER SECTION 74 OF
THE GST ACT, ETC.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR
ORAL ORDER
In this petition, petitioner seeks for the following reliefs:
"The Petitioner, therefore, most humbly prays that this Hon'ble Court be pleased to issue a writ, order or direction:
RFN (i) quashing the Impugned Adjudication Order bearing no. ACCT/LGSTO-183/BogusITC/DRC07- 2/T-9443/24-25, No. MA290225020808U dated 05.02.2025 (Annexure H1) and the Impugned Summary Order bearing no. ZD2902250205889 dated 05.02.2025 (Annexure H2), issued by the 1st Respondent under Section 74 of the GST Act;
(ii) quashing the recovery notice bearing file no. ACCT/LGSTO-183/Rec.procd/DRC-07/T.9547/2024- 25 dated 24.02.2025 (Annexure J), issued by the 1st Respondent under Section 78 read with Section 83 of the GST Act.
(iii) quashing the show cause notice bearing file no. No.ACCT/LGSTO-183/ dated 02.08.2024 Bogus.ITC/DRC-1/T.2123/2024-25, (Annexure F), -3- NC: 2025:KHC:48200 WP No. 19015 of 2025 HC-KAR issued by the 1s Respondent under Section 74(5) of the GST Act;
(iv) Pass such other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity."
2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.
3. A perusal of the material on record will indicate that the petitioner is the proprietary concern. On 02.09.2022, the Mr. Mahabir Prasad, the sole proprietor of the petitioner having expired, the petitioner submitted an application for cancellation of the GST registration standing in the name of Mr. Mahabir Prasad pursuant to which, cancellation of registration order dated 09.12.2020 was passed with effect from 31.07.2019. Subsequently, the respondent issued an intimation in Form DRC-01A dated 30.03.2024 and a show cause notice dated 02.08.2024 under Section 74(5) of the CGST/KGST Act in Form DRC 01 to the deceased Mr. Mahabir Prasad and not -4- NC: 2025:KHC:48200 WP No. 19015 of 2025 HC-KAR to the petitioner, which culminated in the impugned orders dated 05.02.2025, without bringing the knowledge of the petitioner. It is the specific contention of the petitioner that the aforesaid proceedings initiated against the deceased Mr. Mahabir Prasad are null, non est and void ab initio and the same deserves to be set aside.
4. Per contra, learned HCGP does not dispute that the petitioner's ex-proprietor, Mr. Mahabir Prasad expired on 02.09.2020 and submits that appropriate orders may be passed by this Court in the present petition in the light of the decision of the Delhi High Court in the case of Usha Gupta Vs. Commissioner of CGST - W.P.(C).No.11634/2024 and C.M. Appl.No.48366/2024, dated 23.09.2024 and in the light of the decision of the Madras High Court in the case of Unnikrishnan R Vs. Union of India W.P.(MD) No.12464/2024 and W.M.P.(MD)Nos.11068, 11073 & 11079 of 2024, dated 12.06.2024. -5-
NC: 2025:KHC:48200 WP No. 19015 of 2025 HC-KAR
5. In the case of Usha Gupta (supra), the Delhi High Court held as under:
"5. It is settled law that the identity of the sole proprietorship concern is not different from that of a sole proprietor. In the present case, a sole proprietor of the concern - M/s S.K. Gupta & Co.
- Mr Swrender Kumar Gupta, has since expired and therefore, it is relevant in fact, that the impugned SCN has been issued to a non-existent person.
6. Section 93 of the CGST Act is relevant and same reads as under:-
"Section 93. Special provisions regarding liability to pay tax, interest or penalty in certain cases.
(1) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016 (31 of 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 -6- NC: 2025:KHC:48200 WP No. 19015 of 2025 HC-KAR 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.
(2) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016 (31 of 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 time of the partition whether such tax, penalty or interest has been determined before partition but has remained unpaid or is determined after the partition.
(3) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016 (31 of 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.
(4) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016 (31 of -7- NC: 2025:KHC:48200 WP No. 19015 of 2025 HC-KAR 2016), where a taxable person liable to pay tax, interest or penalty under this Act,--
(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."
7. Undeniably, in a case where the person is liable to pay tax, interest and/or penalty, has expired and the business is carried on by the taxpayer's legal representative or any other person after his demise, the said legal representative or such other person is liable to pay the due, interest or penalty as payable by the deceased taxpayer.
However, the show cause notice for recovery of any such- amount is required to be issued to the legal representative or such other person, who is carrying on the business of the deceased taxpayer.
8. In the present case, impugned SCN has not been issued to the legal representative of the deceased taxpayer but to the deceased taxpayer. -8-
NC: 2025:KHC:48200 WP No. 19015 of 2025 HC-KAR
9. In Unnikrishnan R & Ors v. Union of India & Ors : 2024 (7) TMI 606 the Madras High Court has held as under:-
"10. The order that has been passed against the dead person is non-est in law. If the petitioner is carrying on the business of the deceased person, then, the remedy is available to the Department to proceed against the petitioner under Section 93 of the TNGST Act, 2017. It appears to be that the petitioner is not carrying on the business of the deceased person."
10. In view of the above, the impugned SCN is set aside. It is clarified that, this order will not preclude the respondents from issuing a notice to the legal representative or any other person, if it is found that the business of the deceased taxpayer is being carried on by the deceased taxpayer's legal representative or such other person."
6. In the case of Unnikrishnan R. (supra), the Madras High Court held as under:
"9. There is no dispute that the dealer Mr.Radhakrishnan Pillai has died on 11.10.2017 and that the petitioner is one of his legal heirs/legal representatives along with his mother R.Sujatha aged about 62 years, his sister Sreelekshmi aged about 33 years and his grand-mother Nalinakshi Amma aged about 84 years.
10. The order that has been passed against the dead person is non est in law. If the petitioner is carrying on the business of the deceased -9- NC: 2025:KHC:48200 WP No. 19015 of 2025 HC-KAR person, then, the remedy is available to the Department to proceed against the petitioner under Section 93 of the TNGST Act, 2017. It appears to be that the petitioner is not carrying on the business of the deceased person.
11. Be that as it may, since the impugned order has been passed against the dead person, the impugned order is quashed by directing the respondents to issue a common notice to the petitioner representing the interest of the other legal heirs/legal representatives of the deceased dealer Mr.Radhakrishnan Pillai, within a period of 30 days from the date of receipt of a copy of this order and thereafter proceed in the manner known to law, in case the petitioner is carrying on the business of the deceased dealer Mr.Radhakrishnan Pillai."
7. As can be seen from the aforesaid judgments, any proceedings/order against the petitioner's ex-proprietor would be rendered nullity, non est and void ab initio and the entire proceedings including the impugned order deserve to be quashed, reserving liberty in favour of the respondents to take appropriate steps in accordance with law.
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NC: 2025:KHC:48200 WP No. 19015 of 2025 HC-KAR
8. In the result, I pass the following:
ORDER
(i) The petition is allowed.
(ii) The impugned orders at Annexures H1, H2, J and F dated 05.02.2025, 05.02.2025, 24.02.2025 and 02.08.2024 respectively are hereby quashed.
(iii) Liberty is reserved in favour of the respondents to take appropriate steps and proceed further in accordance with law.
Sd/-
(S.R.KRISHNA KUMAR) JUDGE BSV List No.: 2 Sl No.: 27