Case Summary
Case Title, Court, Petition Numbers, Statutory Provisions, Category & Date
Kanwaljit Singh Mujral (Legal heir of Late Smt. Malvinder Kaur Mujral) v. Commissioner of CGST, Delhi-West & Anr.
Delhi High Court
W.P.(C) 8862/2023 & W.P.(C) 8916/2023
Date of Judgment: 18.09.2023
Category of Dispute: Refund of GST on Exports
Relevant Provisions: Section 54 of CGST Act; Rules relating to refund under CGST Rules
(No publisher citation used)
Facts of the Case (Paras 1–6)
The petitioner, Kanwaljit Singh Mujral, is the legal heir and husband of the deceased taxpayer Late Smt. Malvinder Kaur Mujral, registered under GSTIN 07ADJPM9513E1Z1. Refund claims were filed for export-related accumulated ITC for FY 2020-21 (₹20,54,840) and FY 2021-22 (₹38,25,077), but the refund applications remained unprocessed (para 1–3).
The GST authorities contended that under the system architecture, legal heirs may transfer accumulated ITC to a new GSTIN if they continue the business, but refund of periods prior to the new registration cannot be processed by the portal, unless directed by a court (para 4).
Acting on departmental advice, the petitioner transferred the ITC to a new GSTIN obtained in his own name. Later, he learnt that although he could use the transferred credit for future tax liabilities, cash refund of the accumulated ITC for past periods was technically barred. Since he sought refund in cash and not credit utilization, he reversed the transferred ITC back to the deceased taxpayer’s ledger (para 5–6).
Similar refund disputes existed for earlier periods, decided by the Delhi High Court on 07.12.2022 in W.P.(C) 15342/2022 & 15430/2022 (para 7).
Questions/Issues Before the Court
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Whether refund of accumulated ITC relating to the deceased taxpayer can be denied merely on the ground that the GSTN system does not permit processing of such refund after transfer of credit to a legal heir’s GSTIN?
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Whether refund can be directed to be issued to the bank account linked to the original GSTIN of the deceased taxpayer, which is still operational?
Court’s Observations (Paras 4–8)
The Court acknowledged the department’s position that the GST portal presently restricts refund processing where credit has been shifted to a new GSTIN. However, the Court emphasized that system limitations cannot curtail statutory rights, particularly when the department itself acknowledged that the original taxpayer was rightly entitled to the refund (para 3–4).
The Court noted that the petitioner had reversed the transferred ITC back to the deceased taxpayer’s GSTIN, thus restoring the credit position (para 6). Since similar matters were previously decided directing refund processing in the name of the deceased’s GSTIN, the present petition also warranted identical treatment (para 7–8).
Judgment (Para 9)
The petitions were disposed of with specific operational directions, namely:
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Fresh refund applications shall be filed by the petitioner using his signature as authorised signatory of Late Smt. Malvinder Kaur Mujral.
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The GST authorities must process the refund and remit the amount along with applicable interest to the bank account linked with GSTIN 07ADJPM9513E1Z1.
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The Court recorded that both the GSTIN and the linked bank account of the deceased taxpayer remain active.
Thus, the refund claims were allowed, and the department was bound to process them notwithstanding system constraints.
Cases Referred & Their Verdicts (Table Form)
| Case Name | Court / Petition No. | Context | Verdict Summary |
|---|---|---|---|
| Kanwaljit Singh Mujral v. CGST Delhi-West (earlier period) | Delhi High Court; W.P.(C) 15342/2022 & 15430/2022 | Refund of accumulated ITC of deceased taxpayer | Court directed processing of refund in the GSTIN of deceased taxpayer, holding that system restrictions cannot override statutory entitlement. |
| (Referentially applied in current case) | — | — | The Court relied on this earlier order to grant similar relief in the present petitions. |
Between the Fine Lines (Trade/Industry Takeaways)
This judgment reinforces that refund rights under Section 54 cannot be defeated by GSTN system limitations, especially in cases involving deceased taxpayers. Legal heirs can seek refund in cash even if ITC had been transferred to a new GSTIN, provided it is reversed. Refund must be processed in the name and bank account of the deceased taxpayer if the registration and account are still active. The ruling underscores that administrative or system barriers cannot restrict substantive statutory rights.
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