In W.P.(C) 8862/2023 -DEL HC- Delhi High Court allows deceased taxpayer's heirs to seek refund of GST
Justice Vibhu Bakhru & Justice Tara Vitasta Ganju [18-09-2023]

Read Order: Kanwaljit Singh Mujral V. Commissioner of CGST, Delhi-West & Anr

Chahat Varma

New Delhi, September 29, 2023: The Delhi High has directed the GST authorities to process the refund applications of a deceased taxpayer, even though her business had been continued by her heirs.

In this case, the petitioner, who was the husband of the deceased taxpayer Smt. Malvinder Kaur Mujral, had filed petitions seeking refunds of INR 20,54,840 for the Financial Year 2020-2021 and INR 38,25,077 for the Financial Year 2021-2022. The petitioner had applied for these refunds based on goods exported by his late wife, but the authorities had not processed these refund applications.

The counsel for the GST authorities contended that if the business of the deceased taxpayer was continued by her heirs, the tax credit of the deceased can be transferred to the new GST registration. This transferred credit can be utilized to offset the tax liabilities of the business. However, it was contended that the system does not permit refund pertaining to the period prior to the new registration.

The petitioner, following advice, had taken steps to transfer the accumulated tax credit to a new GST number for the same business. However, it was later discovered that although he could use the transferred credit to offset future tax liabilities, his request for a cash refund could not be processed, even though the original taxpayer was entitled to such a refund. Importantly, the petitioner had no intention of carrying forward the accumulated tax credit for future liability settlements and had instead sought a refund. Consequently, he had reversed the tax credit back to the deceased taxpayer's account.

The division bench comprising of Justice Vibhu Bakhru and Justice Tara Vitasta Ganju noted that the petitioner had filed similar petitions in the past concerning earlier taxes, and those petitions had been disposed of by this Court through an order dated 07.12.2022.

In view of the above, the present petitions were disposed of with the following instructions: The petitioner was directed to submit new refund applications, signing them as the authorized signatory and husband of Late Smt. Malvinder Kaur Mujral. Additionally, the GST authorities were instructed to process these newly filed applications and transfer the tax credit, along with any applicable interest, to the bank account associated with the GST.