2026 (3) TMI 729 - HC - GST

Procedure for GST registration suspension: restoration ordered and recovery actions stayed pending opportunity to be heard and reasoned order.

Challenge to suspension of GST registration and to recovery/attachment actions turned on procedural law: the court treated the Revenue's withdrawal of ... Restoration of GST registration upon withdrawal of suspension - Opportunity of hearing before adjudication on show cause notice - no coercive recovery without following due procedure. Restoration of GST registration upon withdrawal of suspension - HELD THAT:- The Court accepted the statement on behalf of the Revenue that the impugned suspension stands withdrawn and directed that the petitioner's registration shall forthwith be restored. The acceptance of the Revenue's statement was recorded in Court and the order restores the registration without further adjudication on the merits of the underlying show cause notice. [Paras 4, 6] The suspension is withdrawn and the petitioner's registration is restored. Opportunity of hearing before adjudication on show cause notice - HELD THAT:- The Court directed that the petitioner be granted an opportunity of hearing on the show cause notice, that the petitioner shall submit all materials within 10 days, the hearing shall occur within 7 days of submission, and an order on the show cause notice shall be passed in accordance with law within 15 days from the date of hearing, thereby requiring the Revenue to follow the prescribed procedural timeline before taking any adjudicatory action. [Paras 6] An opportunity of hearing is to be provided and the specified timetable for submission, hearing and decision is mandated. No coercive recovery without following due procedure - HELD THAT:- The Court directed that the impugned recovery notice shall not be acted upon and that the competent officer must follow lawful procedure, verify the record and consider the petitioner's contentions before passing any order for recovery, thereby restraining coercive steps until due process is complied with. [Paras 5, 6] The recovery notice shall not be acted upon and any recovery must follow due procedure of law. Final Conclusion: The petition is disposed of by recording the Revenue's withdrawal of suspension, restoring the petitioner's registration, directing a hearing and expedited adjudication on the show cause notice, and restraining action on the recovery notice until lawful procedure is followed. Issues: (i) Whether the suspension of the petitioner's GST registration and its consequences were lawful and require restoration and/or hearing; (ii) Whether the recovery notice and provisional attachment could be acted upon without following lawful procedure and granting an opportunity of hearing.Issue (i): Legality of suspension of registration and the appropriate remedial action.Analysis: The Court considered the statements made by Revenue's representatives in court, including the withdrawal of the suspension and the representation that the registration would be restored and made operational. The Court required that any further action on the show cause notice be taken only after granting the petitioner an opportunity to present materials and after following the statutory and procedural safeguards under the applicable GST provisions.Conclusion: The Court accepted the Revenue's statement withdrawing the suspension, directed restoration of the petitioner's registration forthwith, and ordered that the petitioner be granted a hearing on the show cause notice within specified timelines.Issue (ii): Validity of the recovery notice and provisional attachment and requirement of procedure before taking recovery action.Analysis: The Court noted the Revenue's concession that lawful procedure must be followed in relation to the recovery notice and any provisional attachment. The Court stayed action on the recovery notice and directed that the competent officer verify records, afford an opportunity of hearing, and pass an appropriate order in accordance with law before proceeding with any recovery.Conclusion: The Court directed that the recovery notice shall not be acted upon and that any recovery or attachment proceedings shall proceed only after following due process and granting the petitioner an opportunity of hearing.Final Conclusion: The petition is disposed of by accepting the Revenue's statement withdrawing the suspension, restoring the petitioner's registration, directing an opportunity of hearing and time-bound adjudication on the show cause notice, and restraining action on the recovery notice until lawful procedure is followed.Ratio Decidendi: Where administrative action affects GST registration or recovery, the competent authority must follow the statutory procedure, afford the affected party an opportunity of hearing, and pass a reasoned order before suspension, provisional attachment or recovery is effected.