Application for Cancellation of GST Registration Using Wrong Form cannot be Ground to Deny Linking of GSTIN: Rajasthan HC [Read Order]

In a ruling favouring the assessee, the Rajasthan High Court has held that the GST department cannot deny the benefit of linking of GSTIN on death of proprietor merely on the technical ground that the application for cancellation of GST registration was made using a wrong form.

A sole proprietor was expired on 31.01.2018 whereupon, an intimation was forwarded to the respondent CGST Department through a letter in hard copy. The CGST Act provides a procedure for cancellation and thereafter, transfer of registration of the dealer pursuant to the death of the proprietor of the firm. However, such process is permissible if the information regarding the death of the proprietor is uploaded on common portal in FORM GST REG-16. It appears that the information regarding the death of the sole proprietor was not forwarded to the CGST Department electronically and in prescribed FORM GST REG-16 and thus, further attempts made on behalf of the firm to file the GST returns were blocked. In the meantime, a fresh registration has been acquired by the petitioner.

The petitioner contended that the legal heirs of the sole proprietor of a business can file an application for cancellation of registration electronically on common portal on account of transfer of business for any reasons including the death of the proprietor. Thereafter, the GSTIN of the transferee to whom the business had been transferred can be linked with the GSTIN of the transferor. It was contended that the necessary direction deserves to be issued to the respondents to open the common portal so that the petitioner can upload the requisite information in the FORM GST REG-16 and get the two accounts linked so as to facilitate the clearance of the tax liability and to avoid the anomalies.

A division bench comprising Justice Sandeep Mehta and Justice Kuldeep Mathur directed the GST authorities to re-open the portal to allow the petitioner to file the same and held that “We feel that this absolute hyper technical ground cannot be considered valid so as to deny the petitioner from the opportunity to link the GSTIN of his father’s firm with the new GSTIN number of the firm. As a matter of fact, the petitioner gave the intimation about the death of the proprietor of the firm which fact establishes his bonafides that he is desirous of removing the anomalies and clearing off the tax liability.”

To Read the full text of the Order CLICK HERE

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