GST Registration Suspension Overturned: Natural Justice Principles Upheld, Respondent Directed to Reconsider Petitioner's Reply

HC found the GST registration suspension unlawful. The court determined the respondent violated natural justice principles by suspending registration without properly considering the petitioner's reply. The HC directed the respondent to review the reply and make a decision on revoking the suspension, setting aside the original proceedings and ensuring the petitioner's right to trade.

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Issues:
Challenging suspension of GST registration and show cause notice for cancellation of GST number.

Analysis:
The petitioner challenged the suspension of their GST registration and the show cause notice issued for cancellation. The petitioner argued that despite filing a reply to the notice, the respondent had not taken any decision to revoke the suspension. The petitioner contended that they were a genuine company complying with tax laws but were unable to carry on business due to the suspension, which violated their constitutional right to trade. The petitioner criticized the respondent for suspending the registration without proper legal action and argued that this action infringed on their fundamental right to conduct business.

The court noted that while the state could impose reasonable restrictions on trade, the respondent's action of suspending the GST registration without following legal procedures was a violation of the petitioner's fundamental rights. The court emphasized that if the petitioner had violated any provisions, the respondent should have initiated legal action instead of suspending the registration outrightly. The court held that the suspension order was passed without considering the petitioner's reply, which was against the principles of natural justice. The court concluded that the respondent's actions were unjustified and directed them to consider the petitioner's reply and revoke the suspension in accordance with the law.

In the final judgment, the court set aside the impugned proceedings dated 05.09.2024 and directed the respondent to review the petitioner's reply and make a decision on revoking the suspension of GST registration. The court disposed of the writ petition with no costs, closing the connected miscellaneous petition.

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