A H Marble Crafts VS The Commissioner Tax

The petitioner firm has filed a writ petition to challenge the lack of action by respondent No.4 in opening the portal for the petitioner to fulfill its tax liability under Section 93 of the CGST Act, 2017. To understand the context, it’s essential to delve into the background details. The firm’s previous owner, Shri Abdul Hameed Bhati, who is now succeeded by Shri Mohammad Afzal, the current proprietor, is pertinent to this case.

The petitioner firm has filed a writ petition challenging the inaction of respondent No.4 in opening the portal for the petitioner to fulfill its tax liability under Section 93 of the CGST Act, 2017. The case revolves around the death of the former proprietor, Shri Abdul Hameed Bhati, and the subsequent attempts by the firm to transfer registration to the new proprietor, Shri Mohammad Afzal.

Following Shri Abdul Hameed Bhati’s demise, the firm notified the CGST Department through a physical letter. However, the CGST Act mandates a specific procedure for the cancellation and transfer of registration after the proprietor’s death, requiring the electronic submission of information through FORM GST REG-16. It seems this step was overlooked, resulting in the blocking of further GST return filings by the firm. In the interim, the petitioner firm obtained fresh registration.

The petitioner challenges the refusal of its request for registration cancellation and transfer, as well as the respondent’s failure to open the portal for tax liability settlement under Section 93 of the CGST Act. Respondents argue that the application for cancellation was submitted using FORM GST REG-29 instead of the required FORM GST REG-16, leading to a system failure in linking the GSTINs of Shri Abdul Hameed Bhati and the petitioner.

Counsel for the petitioner, Shri Lokesh Mathur, contends that the respondents’ strict adherence to technicalities has unjustly impeded the petitioner’s ability to fulfill its tax obligations.

The petitioner firm has filed a writ petition challenging the failure of respondent No.4 to open the portal for the petitioner to settle tax liabilities under Section 93 of the CGST Act, 2017. The case stems from the death of the former proprietor, Shri Abdul Hameed Bhati, father of the current proprietor, Shri Mohammad Afzal, on January 31, 2018. The petitioner duly notified the CGST Department of the proprietor’s death through a hard copy letter.

According to the CGST Act, registration cancellation and transfer procedures are available for dealers following the death of a proprietor. However, these processes require electronic submission of information, particularly in FORM GST REG-16. It appears that the required information regarding the proprietor’s death was not electronically submitted, resulting in the blockage of further GST return filings. Subsequently, the petitioner firm obtained fresh registration.

The petitioner, dissatisfied with the rejection of the cancellation and transfer of GST registration request, as well as the inaction of respondent No.4 in opening the portal for tax liability settlement under Section 93 of the CGST Act, filed the current writ petition.

In response, the respondents argued that the petitioner’s application for registration cancellation was submitted in FORM GST REG-29 instead of FORM GST REG-16, thus preventing the system from linking the GSTIN of the deceased proprietor to that of the petitioner.

The petitioner’s counsel, Shri Lokesh Mathur, contended that the respondents’ strict adherence to technicalities created unnecessary obstacles for the petitioner in settling the firm’s tax liabilities. He emphasized that although the information about the proprietor’s death was indeed submitted, albeit in the wrong format, the respondents failed to act on it. Reference was made to Circular No.96/15/2019-GST dated March 28, 2019, issued by the Central Board of Indirect Taxes and Customs (CBIT), particularly clause 3(b), which supports the petitioner’s argument.