Rule 21A(4) dictates that if the proper officer fails to decide on the SCN within 30 days, the suspension is deemed to be revoked.
In a recent ruling by the Punjab and Haryana High Court, in case of Shri Balaji Agro Industries [CWP-6160-2024(O&M)], it was decided that the suspension of GST registration stands cancelled if a Show Cause Notice (SCN) remains undecided within 30 days of the response from the taxpayer.
The bench comprising Justice Sanjeev Prakash Sharma and Justice Sudeepti Sharma granted interim relief for the revocation of the suspension of the applicant’s GST registration. The ruling noted that the GST department did not adjudicate on the SCN issued on November 21, 2023, which had suspended the GST registration of the applicant from the same date.
The respondents/department had issued a show cause notice suspending the registration of the applicant effective from November 21, 2023. Following the reply filed by the petitioner, the respondents were directed to make a decision on the show cause notice and the objections submitted by the applicant within 30 days as per Rule 22(3) of the Rules. This rule empowers the respondents to either cancel the GST registration with effect from the date or decide otherwise within the stipulated 30 days.
The applicant argued that their GST registration suspended beyond the specified time duration infringed upon their rights under Article 19(1)(g), as it halted their business activities. Rule 21A(3) prohibited the petitioner from engaging in any taxable supply during the suspension period.
Referring to Rule 21A(4), which provides for the deemed revocation of suspension upon completion of proceedings by the proper officer, the court emphasized that if the proper officer fails to pass an order under the SCN within 30 days, the proceedings should be deemed completed, and the suspension must be revoked.
The High Court granted interim relief, interpreting the provisions, especially when the suspension had been pending for more than four months.
Key Points of the Ruling:
Revocation on Undecided SCN: The Court ruled that if a Show Cause Notice remains undecided within 30 days of taxpayer’s response, the suspension of GST registration is considered revoked.
Rights of the Petitioner: The applicant’s right to carry on business under Article 19(1)(g) was highlighted, emphasizing that the GSTIN suspended for prolonged period halted their taxable activities.
Deemed Revocation: Rule 21A(4) dictates that if the proper officer fails to decide on the SCN within 30 days, the suspension is deemed to be revoked.
In conclusion, this ruling by the Punjab and Haryana High Court provides clarity on the timelines and procedures concerning the suspension of GST registrations, ensuring fair treatment for businesses under the GST regime.
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