Delhi High Court Orders GST Authorities to Process Refund Claims of Deceased Taxpayer’s Heirs

Delhi High Court Orders GST Authorities to Process Refund Claims of Deceased Taxpayer’s Heirs

The Delhi High Court has ordered the GST authorities to process the refund applications of a deceased taxpayer, even though her business has been carried on by her heirs.

In this case, the petitioner, the husband of the deceased taxpayer Malvinder Kaur Mujral, had filed claims for refunds of ₹20,54,840 for the financial year 2020-2021 and ₹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 his claims.

The counsel for the GST authorities, however, argued that if the deceased taxpayer’s business was carried on by her heirs, the deceased’s tax credit could be transferred to the new GST registration. This transferred credit could then be used to offset the tax liabilities of the business. However, the counsel argued that the system does not allow refunds for the period before the new registration.

Following the advice, the petitioner transferred the accumulated tax credit to a new GST number for the same business. However, he 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 did not intend to carry forward the accumulated tax credit for future liability settlements and instead sought a refund. Consequently, he reversed the tax credit back to the deceased taxpayer’s account.

The Delhi High Court Division Bench of Justices Vibhu Bakhru and Tara Vitasta Ganju observed that the petitioner had previously filed similar petitions concerning earlier taxes and that these petitions had been dismissed by the Court in an order dated December 7, 2022.

Having considered the above, the Court disposed of the present petitions with the following directions: The petitioner was directed to submit new refund applications, signed as the authorised signatory and husband of the late Malvinder Kaur Mujral. The GST authorities were also directed to process these newly filed applications and transfer the tax credit, together with any applicable interest, to the bank account associated with the GST registration.