GST Registration Cancellation Allowed Post-Assessee’s Death: Legal Heir’s Application to be Considered

GST Registration Cancellation Allowed Post-Assessee’s Death: Legal Heir’s Application to be Considered

Issue:

Whether the Goods and Services Tax (GST) department is obligated to process and pass an order on an application for cancellation of GST registration filed by an assessee who subsequently passed away, upon a petition by the legal heir.

Facts:

The assessee had a GST registration and had applied for its cancellation. However, the assessee subsequently passed away. A petition was then filed by the legal heir of the deceased assessee, seeking appropriate directions to the department to allow the application for cancellation of GST registration that had been filed by the deceased assessee.

Decision:

The court ruled in favor of the assessee’s legal heir. It directed the department to consider the application for cancellation of GST registration and to pass an order.

Key Takeaways:

• Legal Heir’s Right to Represent: This case confirms that upon the death of a registered person, their legal heir has the right to step into their shoes to pursue necessary compliance actions, including the cancellation of GST registration.
• Cessation of Business Activity Due to Death: The death of a sole proprietor or individual assessee effectively leads to the cessation of business activity in that legal entity’s name. This is a valid ground for cancellation of GST registration under Section 29 of the Central Goods and Services Tax Act, 2017.
• Department’s Obligation to Process Applications: The department is obligated to process all valid applications filed by taxpayers, even if circumstances change (like the death of the applicant), provided the application itself was properly made and the legal heir is pursuing it.
• Facilitating Compliance in Special Circumstances: This decision shows a pragmatic approach to administrative matters where unforeseen circumstances (like death) impede normal compliance. Courts ensure that such events do not lead to indefinite tax liabilities or administrative limbo for the deceased’s estate.
• In Favour of Assessee (Legal Heir): The outcome is beneficial to the legal heir, as it provides a clear direction for the cancellation of the deceased’s GST registration, preventing further compliance burdens or potential liabilities for a non-existent business.