Liability of Court of Wards, Administrator General, Official Trustee, or Receiver – Section 92 of GST

When a business is managed not by its owner but by a court-appointed official or institution such as the Court of Wards, the Administrator General, or a receiver, it raises an important legal and tax-related question: Who is responsible for the GST liabilities of such a business? Section 92 of the CGST Act, 2017, provides a clear answer.

In this blog, we will explore the scope and implications of Section 92 of the CGST Act, who it applies to, and how liability is determined under such circumstances.

What Does Section 92 of the CGST Act State?

Section 92 of the CGST Act addresses situations where the estate or a portion of the estate of a taxable person—who owns a business liable for GST—is under the control of legal or court-appointed authorities. These authorities may include:

• Court of Wards

• Administrator General

• Official Trustee

• Receiver or Manager

• Any person who, regardless of title, actually manages the business as per a court order

In such cases, the law ensures that the responsibility to pay tax, interest, or penalties does not lapse. Instead, the legal or official custodian becomes liable for these dues in the same manner as the original taxable person.

Who Becomes Liable Under Section 92?

The section clearly states that the following entities or persons, when managing the estate or business of a taxable person, are liable for all GST obligations:

1. Court of Wards: A legal body that takes over the management of a minor’s or incapacitated person’s estate.

2. Administrator General: A government-appointed official responsible for administering the estate of deceased persons when no executor is available.

3. Official Trustee: A trustee appointed by the court to manage a trust or estate.

4. Receiver or Manager: An individual or body appointed by a court to manage the business operations during legal proceedings.

5. Any Person Managing the Business: Even if not formally designated, anyone who in fact manages the business is covered.

What Are the Legal and Tax Implications?

When one of the above entities manages a business or estate, they step into the shoes of the taxable person. This means:

• Tax liability continues uninterrupted.

• The entity is responsible for paying GST, interest, and penalties arising from the business.

• All provisions of the CGST Act and the applicable rules apply to them just as they would to the original owner.

This provision prevents tax evasion or unintended non-compliance due to change or disruption in the management of a business.

How Is Tax Recovery Made Under Section 92?

The law empowers tax authorities to levy and recover tax dues from the managing authority (like a Court of Wards or receiver) in the same manner as they would from the original taxable person. Therefore, authorities can:

• Conduct assessments

• Issue demand notices

• Enforce penalties

• Recover tax dues using any method under the CGST Act

Why Is Section 92 Important for Compliance?

Section 92 is crucial for ensuring tax continuity and compliance, especially in cases involving:

• Disputes in ownership

• Succession issues

• Bankruptcy or liquidation

• Business operations being taken over due to legal incapacity or demise

It ensures that GST obligations are not affected by changes in management or control, thereby protecting government revenue and maintaining business accountability.

Can the Managing Authority Contest Tax Liability?

Yes, the managing authority (e.g., a receiver or trustee) can contest assessments or tax demands in accordance with the CGST provisions. They have access to:

• Filing objections

• Appealing orders

• Seeking redressal under the legal framework of the Act

However, they must comply with procedural obligations, such as filing returns and maintaining records, just like a regular taxable person.

Final Thoughts

Section 92 of the CGST Act is a safeguard provision that ensures tax continuity when a business or estate undergoes legal or administrative transition. It assigns clear responsibility to court-appointed or legally empowered managers, removing ambiguity and reinforcing compliance.

Whether you are a legal custodian, court officer, or GST practitioner, understanding this provision is essential for managing liabilities effectively when handling estates or businesses under judicial or official supervision.

For professional help in understanding GST obligations under special circumstances like these, consider consulting a qualified GST practitioner or Chartered Accountant.

FAQs

Q1. Does Section 92 apply only to GST or other taxes as well?
Section 92 applies specifically to tax liabilities under the CGST Act.

Q2. Can the Court of Wards delegate GST compliance to someone else?
While operational tasks can be delegated, the ultimate liability under the law remains with the entity mentioned in Section 92.

Q3. Are penalties also recoverable from the legal custodian?
Yes, all dues including penalties and interest are recoverable from the managing authority.