Refund Cannot Be Denied to Legal Heir Merely for Being Unregistered Under GST

Case Summary:

• Case Title: Bhavna Luthra v. Assistant Commissioner, CGST

• Court: Delhi High Court

• Petition Number: W.P.(C) 4551/2025

• Category of Dispute: Refund

• Date of Judgement: 9th April, 2025

• Relevant Sections: Section 54 of CGST Act, Rule 89 of CGST Rules

• Judges: Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta

Facts of the Case (¶3–¶6)

• The petitioner, Ms. Bhavna Luthra, is the legal heir of late Mr. Narain Das Luthra, proprietor of M/s Hunny Enterprises, who passed away on 29.11.2020.

• The GST registration was cancelled with effect from 01.01.2021. At the time, the electronic cash ledger reflected a balance of ₹10,45,793.

• A refund claim was filed (ARN: AA071021U32694M), but it was rejected on 10.01.2022.

• The petitioner approached the Court in W.P.(C) 5551/2024, resulting in an order dated 09.05.2024 directing the GST Department to recredit the amount in two weeks.

Question(s) in Consideration (¶6–¶8)

1. Whether the GST Department was justified in rejecting the refund solely on the ground that the petitioner was not a registered person?

2. Whether the earlier court direction for recredit was binding on the Department?

Observations of the Court (¶8–¶10)

• The Court expressed serious concern over the Department’s non-compliance with its previous order for recrediting the amount (¶8).

• The reason cited by the Department — that the petitioner is unregistered — was found to be baseless since the death and cancellation of registration were already acknowledged earlier (¶9).

• The Court reaffirmed that the cash ledger is a deemed property of the taxpayer, now represented by the legal heir (¶10).

Judgement of the Court (¶11–¶12)

• The case was listed for further hearing on 05.05.2025.

• The Court directed Mr. Sanjay Kumar Bansal, Assistant Commissioner, to remain personally present in the Court on the next date (¶12).

• The direction highlights the seriousness of the Department’s non-compliance with judicial orders.

🧾 Between Fine Lines (Simple Summary)

1. Refund of balance in the GST cash ledger cannot be denied to the legal heir just because she is no longer registered under GST.

2. The petitioner had already obtained a favourable court order, but the Department ignored it.

3. The Court warned the Department against such administrative high-handedness.

4. The legal heir is deemed entitled to the cash ledger balance.

5. Further action is deferred to the next hearing with strict instructions.

Summary of Referred Cases

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