CA Final · Indirect Tax Laws · Liability to Pay in Certain Cases

Mr. Anil Deshmukh, a trustee carrying on a business under a trust for beneficiary Master Rohan, was registered under GST and owed ₹1,50,000 tax for the period up to 30 June. The trust was terminated on 30 June. In September, an order determined an additional ₹50,000 tax for supplies made before 30 June. In addition, a notice was issued under another provision regarding a penalty not covered under any other assessment proceedings. Which is correct?

The beneficiary becomes liable for all tax, interest or penalty due up to termination of the trust, including the ₹50,000 determined later, so ₹2,00,000 in total. A penalty outside the listed proceedings can be levied by the proper officer only by an order after a reasonable hearing.

1. AMr. Deshmukh alone remains liable, since he was the registered person
2. BThe beneficiary is liable for the ₹1,50,000 only, as the ₹50,000 was determined after termination
3. CThe beneficiary is liable for the tax, interest or penalty due up to termination of the trust, including the ₹50,000 determined later; a penalty not covered by assessment proceedings may be levied by the proper officer by an order after a reasonable opportunity of being heardCorrect
4. DThe beneficiary is liable only after obtaining a fresh registration, and no penalty can be levied separately