No retrospective cancellation of GST registration in case of death of deceased
The Delhi High Court ruled that a GST registration cannot be revoked retrospectively after the death of deceased. It can only be cancelled starting from the date of default made by the deceased proprietor.
The Goods and Services Tax (GST) is the largest indirect tax reform implemented in India. A person must register under GST if their aggregate annual turnover across India on the same PAN exceeds a threshold limit set by the law. But there are situations where registration is compulsory under the GST law, regardless of the sales limit.
In case of a proprietorship (business owned by a single person), after the death of the proprietor the business can be carried forward by the legal heir. Since GST is still a new tax reform and with time more and ore confusions are being addressed either by the department or by various judicial authorities.
In one such case of Varun Kumar Arya Vs Commissioner of Delhi Goods and Services Tax, the Delhi High Court has held that Goods and Services Tax (GST) registration of a deceased person cannot be cancelled retrospectively by tax authorities. This applies even if the business is not managed by the legal heir. The registration can be cancelled only from the date of default made by the deceased and not from the date of registration.
In the above mentioned case, the deceased was in defaults of filing of GST returns for a certain period of time. The legal heirs did not carry on the business and hence the default was not cleared.
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