A.H. Marble Crafts vs. The Commissioner Tax

Held

The Court held that the hypertechnical ground of not providing information electronically in the prescribed FORM GST REG-16 cannot be a valid reason to deny the petitioner the opportunity to link the GSTIN of the deceased proprietor's firm with the new GSTIN. The Court found that the petitioner had indeed provided intimation about the proprietor's death, establishing their bonafide intent to resolve anomalies and clear tax liabilities. The Court reasoned that the purpose of the CGST Act and its associated circulars is to facilitate compliance and tax collection, not to create insurmountable procedural hurdles. The ratio decidendi is that procedural technicalities should not impede the substantive objective of tax compliance, especially when bonafide intent is established. The Court directed the respondents to activate the common portal and allow the petitioner to upload the appropriate information in FORM REG-16 within 30 days. Upon submission, the GSTIN numbers of the transferee and transferor shall be linked as per clause 3(b) of the Circular dated March 28, 2019.

Facts

The petitioner, A.H. Marble Crafts, through its proprietor Mohammad Afzal, filed a writ petition challenging the inaction of Respondent No. 4 (GST Network) in opening the portal to allow the petitioner to complete tax liability under Section 93 of the CGST Act, 2017. The previous proprietor, Abdul Hameed Bhati, father of Mohammad Afzal, expired on January 31, 2018. Intimation of the death was sent to the CGST Department via hard copy. The CGST Act requires uploading information regarding the death of a proprietor on the common portal in FORM GST REG-16 for cancellation and transfer of registration. This was not done electronically. Consequently, the firm's attempts to file GST returns were blocked. A fresh registration has since been acquired. The respondents contended that the application for cancellation was made in FORM GST REG-29, not FORM GST REG-16, preventing the linking of the deceased proprietor's GSTIN with the petitioner's new GSTIN.

Key Issues

1. Whether the respondents' hypertechnical stance in refusing to link the GSTINs based on the prescribed form for intimation of the proprietor's death is legally tenable, thereby preventing the petitioner from clearing tax liabilities? (Mixed question of law and fact, concerning Section 29(1)(a) of the CGST Act, 2017 and relevant circulars). Petitioner's arguments: The petitioner argued that the information regarding the proprietor's death was forwarded to the respondents, albeit in the wrong format. They relied on Circular No. 96/15/2019-GST dated March 28, 2019, specifically clause 3(b), which permits legal heirs to file for cancellation of registration in FORM GST REG-16 on account of the proprietor's death and to link the transferor's GSTIN with the transferee's GSTIN. The petitioner urged the Court to direct the respondents to open the portal for uploading the requisite information in FORM GST REG-16. Respondents' arguments: The respondents' counsel acknowledged that the GSTINs of the transferee and transferor were not linked solely because the information was not provided electronically on the common portal in FORM GST REG-16.