Shiv Construction Vs State of Bihar (Patna High Court)
The Patna High Court has ruled that a business’s Goods and Services Tax (GST) registration cannot be suspended based on allegations of forged documents without first providing an opportunity for a proper hearing. The ruling came in a case filed by “Shiv Construction,” a partnership firm whose GST registration was suspended by tax authorities. The company’s petition sought to quash the suspension, restore its GST portal access, and initiate an investigation into how unauthorized changes were made to its registration details using what it claimed were forged documents.
The firm argued that its GST registration, which was under the authorized signatory Mr. Rajiv Ranjan, had been suspended without any notice or opportunity to be heard. In its defense, the tax department stated that the suspension was a temporary measure to “protect the interest of the revenue” due to “dubious and contradictory” claims from rival partners within the firm. The department acknowledged that it had not provided a hearing before the suspension order was issued.
The court found this lack of due process to be a violation of natural justice. It directed the Joint Commissioner of State Taxes to provide a fresh opportunity for all parties involved to present their cases and to issue a new order after a hearing, within four months. Until a final decision is reached, the court’s prior interim order staying the suspension remains in effect. The court’s ruling reinforces the principle that procedural fairness, including the right to be heard, is a mandatory prerequisite for administrative actions that have significant consequences for a business.
