Commencement Of Proceedings After Assessee's Death: Delhi High Court Rejects Plea Challenging Section 93(1)(b) CGST Act
The Court rejected challenge to validity of Section 93(1)(b), leaves service, merits and penalty open for statutory appeal, and directed Department to account for ₹15.4 lakh retained from deceased's home.
The Delhi High Court has held that Section 93 of the CGST Act permits proceedings to be commenced after death, provided the conditions prescribed by the provision are satisfied. The Court rejected the argument that the words "determined after his death" cover only proceedings begun in the deceased's lifetime.
The Bench rejected the constitutional challenge to Section 93(1)(b) of the Act but left service, proof of contravention, the penalty and the conditions of clause (b) to be examined in a statutory appeal under Section 107. It also directed the Department to account for ₹15,40,000 retained from the deceased's premises.
A Division Bench of Justice Anil Kshetarpal and Justice Vimal Kumar Yadav observed, “…this Court holds that Section 93 does permit proceedings to be commenced after death, provided the conditions prescribed by the provision are satisfied. Whether those conditions were satisfied when the Department proceeded against the Petitioner is a separate matter and does not depend on the existence of the statutory power under Section 93 of the Act…Section 93 of the Act is not an independent penal provision against the legal representative”.
Advocate Bharat Bhushan appeared for the petitioner and Monica Benjamin, Senior Standing Counsel appeared for the respondent.
The DGGI searched the Dwarka residence of Ankit Dabas on July 23, 2020 and found ₹15,40,000, which the Department says he submitted voluntarily and which was placed in a fixed deposit. He died on May 06, 2021, and the Department was informed in October 2021. On July 31, 2024, a show cause notice proposed a penalty under Section 122(3)(a) against his widow, Jaiwanti, as legal representative, invoking Section 93.
The Order-in-Original of February 01, 2025 was passed ex parte. Its clause AD imposed a penalty of ₹1,50,000, while clause AE stated that no penalty was being imposed. The petitioner says she never received the notice, and hence filed the writ petition.
The Court held that Section 93 contains no qualification requiring proceedings to have commenced during the lifetime, and that its closing words distinguish liability determined before death but unpaid from liability determined afterwards. Investigation during the lifetime was not the source of the power, which flows from the statute.
Section 93 is not an independent penal provision against the legal representative, and under clause (b) liability is confined to the estate. The Court distinguished the Madras High Court's decision in Commissioner of Income Tax v. Late Dr. K.C.G. Verghese (2019) 416 ITR 155 (Mad) as resting on a different statutory scheme. On Article 14 of the Constitution of India, it held that Section 126(3) guarantees an effective hearing, that inability to give a personal account "cannot be treated as an admission", and that the provision has a rational basis.
“The loss of the person possessing first-hand knowledge may seriously affect the explanation available to the representative and the weight that can fairly be attached to the evidence. Section 126(3) of the CGST Act in fact requires an effective opportunity of hearing. The representative must receive the relied-upon material and be permitted to contest the alleged contravention, the statutory basis and the proposed amount. Inability to give a personal account of the deceased’s affairs cannot be treated as an admission. The statute also preserves an Appeal against an adverse determination”, the Bench noted.
The Court granted the petitioner four weeks to file an appeal, which shall not be rejected as time-barred, and left all merits open. The Department must furnish a complete account of the ₹15,40,000 within three weeks, identifying the statutory basis for any retention.
Cause title: Jaiwanti v. Union of India & Ors. (Neutral Citation: 2026:DHC:8282-DB)
Appearances:
Petitioner: Bharat Bhushan, Nidhi Gupta and Anuay Mishra, Advocates.
Respondent: Raj Kumar Yadav and Preeti Gothwal, Senior Standing Counsel Monica Benjamin, Laiba Arif and Prerika Narang, Panel Counsel Vaishali Gupta with Advocate Rashi Aggarwal, Advocates.