PB & HR HC: If A SCN is Not Decided within 30 Days of the Response, GST Registration is Considered Revoked

The Punjab and Haryana High Court ruled that suspension of GST registration is considered cancelled unless a show cause notice is decided within 30 days of answer.

The interim relief for revocation of the suspension of the applicant’s GST registration is permitted by the bench of Justice Sanjeev Prakash Sharma and Justice Sudeepti Sharma and noted that the GST council does not adjudicate on SCN on November 21, 2023, which had also suspended the GST registration of the applicant from the same date.

A show cause notice is been issued by the respondents/department suspending the registration of the applicant with effect from November 21, 2023. Concerning the reply filed by the petitioner, the respondents were directed to decide the show cause notice and objections submitted via the applicant within 30 days in terms of Rule 22(3) of the Rules, which authorizes the respondents to cancel the GST registration with effect from the date or decide it otherwise within 30 days.

The applicant argued the suspension of the petitioner’s GST registration beyond the specified time duration breached his Article 19(1)(g) rights since GST registration suspension leads to a business being carried to a halt. From doing any taxable supply at the time of suspension rule 21A(3) prohibited the petitioner.

Rule 21A(4) furnished towards deemed revocation of suspension on completion of proceedings by the proper officer, wef the date on which the suspension had come into effect.

Rule 22(3), read including Rule 21A(4), should be interpreted to hold that if the proper officer is unable to pass an order under the SCN within 30 days, the proceedings should be considered to be completed and the suspension must be revoked.

The High Court allowed the interim relief by interpreting the provisions in which the suspension has been proceeding for more than four months.