📘 Section 92 of CGST Act, 2017 – Liability of Court of Wards, Administrator General, Official Trustee, etc.

Act: Central Goods and Services Tax Act, 2017
Chapter: Chapter XVI – Liability to Pay in Certain Cases
Section Covered: Section 92
Effective From: 01st July 2017

🔎 Introduction

Section 92 of the CGST Act, 2017 deals with GST liability in cases where the business of a taxable person is under the control or management of certain statutory or court-appointed authorities such as:

Court of Wards
Administrator General
Official Trustee
Receiver
Manager appointed by court

This provision ensures that GST dues remain recoverable even when business is managed by a legal authority instead of the original owner.

📜 Bare Provision – Section 92

Where the business in respect of which any tax, interest or penalty is payable under this Act is carried on by or under the control of:

Court of Wards
Administrator General
Official Trustee
Receiver
Manager (including any person managing property under any law)

then such tax, interest or penalty shall be levied upon and recovered from such authority or person in like manner and to the same extent as it would be determined and recoverable from the taxable person, as if the taxable person were conducting the business himself.

✅ Meaning in Simple Words

If:

• A taxable person’s business is taken over or managed by a court or statutory authority,
• Or a receiver/manager is appointed to run the business,

Then:

👉 GST liability will be recovered from that authority or manager.
👉 The law treats that authority as if it were the taxable person.

👥 Persons Covered Under Section 92

This section applies when business is carried on by or under control of:

Court of Wards
Administrator General
Official Trustee
Receiver appointed by court
Manager appointed under any law

The essential condition is that such person is managing or controlling the business of the taxable person.

💼 Nature and Extent of Liability

The liability under Section 92 includes:

✔ GST payable on taxable supplies
✔ Interest on delayed payment
✔ Penalty imposed under CGST Act
✔ Any other recoverable dues

The recovery mechanism is the same as if the original taxable person were conducting the business.

📊 Practical Illustration

Suppose:

A company defaults in repayment of loans and the Court appoints a Receiver to manage its operations.

During the period of receivership:

• The business continues to supply goods
• GST becomes payable

In such case:

➡ The GST department can recover tax, interest and penalty from the Receiver managing the business.
➡ The Receiver is responsible for compliance during the management period.

⚖️ Judicial Principles & Case Law References

Although Section 92 is specific to GST, similar principles have been recognised under earlier tax laws and judicial precedents.

1️⃣ State of Kerala v. V. R. Kalliyanikutty (1999) 3 SCC 657

The Supreme Court held that statutory liability can be enforced against a receiver managing property if the statute specifically provides for it.

👉 Principle: Where statute creates liability on receiver/manager, it is enforceable.

2️⃣ ITO v. Official Liquidator (High Court Rulings under Income Tax Act)

Courts have consistently held that when business is carried on by an Official Liquidator or Receiver, tax liability during that period can be enforced against such person managing affairs.

👉 Principle: Representative control leads to statutory responsibility.

3️⃣ Jullundur Vegetables Syndicate Case (SC)

The Supreme Court emphasized that tax liability must arise strictly from statute.

👉 Section 92 clearly creates such statutory liability; hence recovery is valid.

🎯 Objective of Section 92

The main objectives are:

✔ To prevent loss of revenue when business is under court control
✔ To ensure continuous GST compliance
✔ To fix responsibility on the person managing business operations
✔ To avoid disputes regarding liability during receivership or trusteeship

📌 Important Points to Remember

• Liability applies only for the period during which business is under control of such authority
• Recovery is limited to statutory framework
• Section 92 does not transfer ownership, only liability for compliance
• All GST provisions apply as if original taxable person was operating

🔄 Section 92 vs Section 91 – Quick Difference

Particulars	Section 91	Section 92
Applies To	Guardian/Trustee of minor	Court/Receiver/Official authority
Type of Person	Private representative	Court or statutory authority
Reason for Control	Legal incapacity	Court appointment / legal control
Liability	Co-extensive	Co-extensive

❓ Frequently Asked Questions (FAQs) – Section 92 CGST

Q1. Does Section 92 apply automatically when receiver is appointed?

Yes, once business is under control of receiver, GST liability during that period applies.

Q2. Is the receiver personally liable?

Liability arises in representative capacity for business operations managed.

Q3. Does this apply during liquidation?

Yes, if business operations continue under official liquidator or similar authority.

Q4. Is past liability before appointment recoverable from receiver?

No, receiver is liable only for the period of management/control.

Q5. Does Section 92 override other GST provisions?

No, it operates along with other recovery provisions.

Q6. Can ITC be claimed during receivership?

Yes, subject to normal ITC conditions.

Q7. Does this provision apply to insolvency professionals?

Where business is managed under legal authority, similar principles may apply subject to IBC framework.

Q8. Is separate GST registration required for receiver?

Generally, registration continues in name of taxable person unless law requires modification.

Q9. Can penalty be imposed on court-appointed manager?

Yes, if statutory conditions are satisfied.

Q10. What is the purpose of Section 92?

To ensure GST recovery when business is under statutory or court management.

📝 Conclusion

Section 92 of the CGST Act, 2017 ensures that GST compliance continues uninterrupted even when business is under control of Court of Wards, Administrator General, Official Trustee, Receiver or Manager appointed by law.

The provision strengthens the GST recovery framework by clearly identifying the responsible person during the period of statutory management.

It safeguards government revenue and maintains continuity in tax administration.

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