Haradiya Enterprises Vs Superintendent of Central Tax (Karnataka High Court)
Summary: The Karnataka High Court, in Haradiya Enterprises v. Superintendent of Central Tax, ruled that suspending a taxpayer’s GST registration pending an enquiry into alleged irregularities is excessive. The petitioner, a registered dealer, received a show cause notice (SCN) on October 14, 2024, citing Rule 21(b) of the CGST Act, which allows cancellation if invoices are issued without actual supply of goods or services. The notice also immediately suspended the petitioner’s GST registration. The petitioner submitted a reply and multiple representations, asserting compliance with GST obligations and denying any fraudulent input tax credit claims. However, the authorities did not consider the response before enforcing the suspension, leaving the petitioner unable to conduct business.
The Court held that suspending GST registration without reviewing the petitioner’s reply was unjust, especially when the enquiry could take time. It directed the tax authorities to revoke the suspension immediately while granting them the liberty to proceed with the enquiry and take action in accordance with the law after due consideration. The ruling ensures that businesses are not unduly affected by procedural actions before a final decision is reached.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
