JUNE 24, 2026

The Undying Spirit of GST

By Vijay Kumar

IN tax administration, miracles happen quietly. Some taxpayers reincarnate.

A man dies in 2020. Five years later, a High Court points out that initiating tax proceedings against him is legally impossible - for one minor reason - he is dead. Yet, in 2026, the Department calmly issues another tax order against the same deceased taxpayer. It is as though the High Court's judicial reminder was treated as a polite, easily ignored suggestion.

This is not a technical oversight. It is a showcase of the tax machinery's remarkable ability to march aggressively forward long after the taxpayer has stopped breathing.

It is about a proprietary concern whose proprietor died years ago, a family dragged back into litigation because the Department refused to acknowledge mortality, and a legal framework that recognizes death in clear statutory language while the administrative process treats it as a clerical inconvenience - something to be taken note of only after the correct form is filed in triplicate.

The first death, legally speaking

The legal saga began in 2025. In S. B. Enterprises v. Directorate General of GST Intelligence (DGGI), Jamshedpur = 2026-TIOL-758-HC-JHARKHAND-GST, the Jharkhand High Court was told that the impugned assessment order and the appellate order had both been passed against a dead person. On 24 January 2025, the Court observed, with characteristic restraint, that it found prima facie force in that allegation and stayed all further proceedings.

The deceased proprietor was Late Shibu Prasad Das, who had expired on 15 September 2020. The petitioner was the proprietary concern represented by his son, Mr. Monty Kumar. Once the proprietor died, the legal position shifted. The Department could no longer pretend that notices and orders issued in the name of the deceased retained some magic validity merely because the GST portal had not yet developed a concept of death.

The sequel

Come 23 January 2026. Exactly one year after the High Court had stayed proceedings because they were against a dead person, the CGST Department passed yet another order against the same deceased proprietor. It was not just a second mistake. It was the same mistake, now upgraded to sequel status.

The petitioner was back before the same High Court, again pointing out that the order-in-original was issued against Late Shibu Prasad Das, who had already died in 2020. The petitioner also placed on record the earlier order dated 24 January 2025, in which the Court had already recorded the same objection and granted stay.

Once is an error; twice looks suspiciously like internal policy.

The Department's defence

The Department's defence was bold, and memorable.

1. The proprietor is dead, but the proprietary firm survives .

This argument deserves respect if only for its sheer audacity. A proprietary concern is not a separate legal person. It is the owner operating under a business name. The firm does not survive in the same way a company survives.

The law may recognize continuity of liability in certain circumstances, but continuity of liability is not the same thing as continuity of the dead person's participation in the proceedings. If the business continued, the Department had to proceed against the legal representative or other person lawfully responsible. If the business stopped, it had to proceed against the estate, within the limits of law. What it could not do was keep issuing orders in the name of the dead proprietor and then argue that the firm's existence somehow solved the problem.

2. There was nothing on record to show that the death was specifically intimated.

This would be a neat administrative shield, if not for the glaring fact that the High Court had explicitly recorded the death in its 2025 stay order after hearing these exact same respondents. This wasn't a rumour overheard in the office canteen; it was a binding judicial order. Unless the Department is suggesting they don't read the rulings of the cases they lose, they cannot claim ignorance.

Did the Department challenge that finding?

Did it appeal?

Did it obtain any contrary order?

The pensioner's life certificate

A pensioner is required to submit a life certificate in November. He forgets and submits it in December. The officer says: "This proves you are alive in December. But where is the proof that you were alive in November?"

By issuing that 2026 order, the Department effectively expected the grieving family to prove that the deceased had remained consistently, uninterruptedly dead across all relevant assessment periods.

Bureaucracy, when left to itself long enough, can produce logic that feels less like administration and more like parody.

The High Court considered the rival contentions and found that the order-in-original dated 23 January 2026 was vulnerable because it had been made against a dead person. That conclusion is not dramatic. It is basic law. 2026-TIOL-758-HC-JHARKHAND-GST

The Court did not want to go into the disputed question whether there had been specific intimation of death. More importantly, the Court could not ignore its own earlier order dated 24 January 2025, passed after hearing the very same respondents. The Court had already recorded the petitioner's submission that the order was against a dead person and had stayed all further proceedings.

The Court observed that the respondents could surely not claim ignorance of that order. Still, after a year, the Department had chosen to pass yet another order against the very same dead person.

The Court also rejected the "firm continues" line of reasoning as irrelevant. Once the proprietor dies, notice must go to the legal representative if the Department wishes to continue. That had not been done.

The High Court therefore quashed and set aside the order-in-original dated 23 January 2026, while leaving it open to the Department to take steps in accordance with law to pursue its claims against the petitioner.

That is judicial language for: "You may proceed, but please proceed lawfully this time. You may try again, but please invite a living person next time."

What the Act already says

The most ironic part of this entire dispute is that the CGST Act itself is perfectly comfortable with mortality.

- Section 29 explicitly permits the cancellation of a GST registration if a business is discontinued due to the death of the proprietor.

- Section 93 handles the tax dues, that if a taxpayer dies, the legal heirs or those continuing the business take on the liability. If the business stops, the liability is paid out of the deceased's estate.

The statute builds a careful framework - one that protects government revenue without pretending to amend the laws of biology. The CGST Act knows that tax liability may outlive the taxpayer; it simply recognizes that the human being does not. Nowhere does it authorize the Department to treat a dead person as if he is merely waiting in the next room for his hearing to start.

And that's the heart of it: liability may continue in a legal avatar, but the Act never empowers the Department to keep addressing the departed himself, as if the file survives, the demand survives, and therefore the taxpayer must also be politely presumed to survive.

A dead person is treated like a living assessee. A High Court order is treated like a temporary interruption rather than a binding legal fact. And the Department, instead of correcting course, keeps pressing ahead because the file still exists and the demand still has a number. The family knows the man died. The Court knows the man died. But in the Department's files he remains stubbornly, bureaucratically alive.

When a proprietor dies, the GST registration needs to be cancelled in accordance with section 29. If the business is continued by legal heirs or another person, the proceedings must be directed to the correct living person. If the business is not continued, recovery - if any - must be pursued only as the law permits, out of the estate and within statutory limits. The deceased himself is not the proper addressee for fresh adjudication.

That sounds elementary, but this case shows why elementary things often need to be restated. A name on a signboard is not the same as a living taxpayer. And an order against a dead proprietor is not cured by the fact that the tax demand still exists.

The entire dispute could have been avoided by a single moment of administrative reflection. Once the High Court in 2025 had stayed proceedings because the order was against a dead person, the Department needed only to pause, verify, and proceed against the correct living individual.

Instead, it issued another order in 2026 and then defended it by saying the death had not been "specifically intimated". Does death become legally effective only after it is uploaded, countersigned by the deceased, and approved by the jurisdictional officer?

One really cannot escape tax just by dying.