Transfer of closing stock

Dear Jaswit
In term of Notification 12/2017 CT (r) , such Transfer of stock is Exempted in GST.
You need to prepare Business Transfer Agreement & on the basis of the same the stock can be transferred.
If there is any ITC balance is lying in ECL of propietory firm can also be transferred by filing ITC 02 .
In term of Rule 41 , file ITC 02 in Proprietor firm to transfer the ITC to Legal Heir"s firm.

For More information on same can refer Circular 96/15/2019 GST

Sole proprietor was in composition dealer (he has no itc)
legal heirs was in gst regular dealer (partenership firm)

Whatever itc in ECL will be lapsed.

Dear Jaswit
It's sure that stock Transfer process is Exempted in such cases & Notification does not say that goods will be treated as exempted .

But I doubt that in this case whether you can file ITC 01 & claim ITC on stock ..... but when I go through the Section :

In term of Section 18(1)(a) of CGST can file ITC 01 & can claim ITC on Stock.

Sec 18(1) of the CGST Act prescribes the date when a person is entitled to take Credit in particular circumstances:-

A taxable person who has applied for registration within thirty days from the date on which he becomes liable to registration
is entitled to take Credit of input tax on the day immediately preceding the date from
which he becomes liable to pay tax under the provisions of the CGST Act.

So in above its clearly stating that the person liable for registration (whatsoever reason) can claim ITC on stock.
Can only suggest you can try filing ITC 01 to claim ITC on stock.