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Jaiwanti vs. Union of India & Ors.

Writ Petition (Civil) · 2026:DHC:8282-DBDecided 25 Sept 2026New Delhi Bench
W.P.(C) 7254/2025CNR: DLHC010336622025
Justice Anil Kshetarpal · Justice Vimal Kumar Yadav

Background

More than three years after her husband Ankit Dabas died, the GST Department issued Jaiwanti a Show Cause Notice proposing a penalty for tax offences her late husband had allegedly committed, and sought to keep Rs. 15,40,000/- in cash recovered from his home. She challenged whether the law allows starting fresh penalty proceedings against a deceased person's estate years after death, and separately challenged the retention of the cash.

Decision Breakdown

The Court held that Section 93 of the GST Act does permit tax or penalty liability to be determined even after a person's death, as long as it stems from conduct during their lifetime, rejecting the argument that proceedings must have already begun before death. It also rejected the constitutional challenge to this provision, since the law confines any liability to what the deceased's estate can bear and requires the legal representative be given a fair hearing. However, finding an unexplained internal contradiction in the final order (one clause imposed a penalty on Jaiwanti, another said no penalty was imposed) and unresolved questions about the cash's retention, the Court left the merits to be argued in a statutory appeal, and separately directed the Department to fully account for the seized cash and justify its continued retention.

Lesson Learnt

Tax authorities in India can, under specific statutory provisions, pursue penalty proceedings against a deceased taxpayer's estate through their legal heirs even years after death, but any money seized during investigation cannot be held indefinitely without the department properly justifying its retention.

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