2022 (4) TMI 121 - HC - GST

GST Registration Suspension Stayed: Court Rules Vague 'OTHERS' Grounds Insufficient Under Rule 21A

The HC stayed a vague show cause notice issued under GST law which had suspended the petitioner's registration for over forty days without specifying ... Seeking removal of suspension of GST Registration of the Petitioner - Constitutional Validity of Rule 21A of the CGST Rules - whether the SCN specify the reason as to why the cancellation proceedings have been initiated against the Petitioner - principles of natural justice - HELD THAT:- Issue notice. Mr. Anish Roy, Advocate accepts notice on behalf of the respondents. He states that he has instructions only to enter appearance. He prays for some time to obtain instructions on merits. Since in the present case, the petitioner’s registration has been lying suspended for more than forty days on the basis of a show cause notice which is bereft of any reason or fact, this Court stays the impugned notice dated 14th February, 2022 and directs forthwith restoration of the GST Registration of the petitioner. List on 4th August, 2022. Issues:1. Quashing of show cause notice dated 14th February, 20222. Removal of suspension of GST Registration3. Declaration of Rule 21A of the CGST Rules as ultra vires Constitution of India4. Direction to allow carrying on the businessAnalysis:1. Quashing of Show Cause Notice:The petitioner filed a petition seeking the quashing of the impugned show cause notice dated 14th February, 2022. The petitioner's counsel argued that the notice was vague and did not specify the reasons for initiating cancellation proceedings against the petitioner. The counsel contended that the grounds mentioned in the notice as 'OTHERS' were insufficient and violated the petitioner's rights under Article 19(1)(g) of the Constitution of India. The court issued notice to the respondents, and the respondents' counsel accepted the notice, requesting time to obtain instructions on merits.2. Removal of Suspension of GST Registration:The petitioner also sought directions to remove the suspension of GST Registration, emphasizing that the suspension had caused extreme hardship, irreparable loss, and harassment to the petitioner. The court noted that the petitioner's registration had been suspended for over forty days based on a notice lacking reasons or facts. Consequently, the court stayed the impugned notice dated 14th February, 2022, and directed the immediate restoration of the petitioner's GST Registration to allow the petitioner to continue their business activities.3. Declaration of Rule 21A as Ultra Vires:Additionally, the petitioner requested a declaration that Rule 21A of the CGST Rules was ultra vires the Constitution of India and the CGST Act. However, the judgment did not provide detailed analysis or resolution regarding this specific issue.4. Direction to Allow Carrying on Business:The petitioner further sought directions to allow carrying on the business activities that belonged to them. The court's primary focus was on addressing the suspension of GST Registration and ensuring the petitioner's ability to continue their business operations. The matter was listed for further hearing on 4th August, 2022, indicating ongoing proceedings to address the issues raised in the petition comprehensively.