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Case Law Details

Case Name : Shri Balaji Agro Industries Vs State of Punjab and Another (Punjab and Haryana High Court)
Appeal Number : CWP-6160-2024 (O&M)
Date of Judgement/Order : 22/03/2024
Related Assessment Year :

Shri Balaji Agro Industries Vs State of Punjab and Another (Punjab and Haryana High Court)

Suspension of GST registration revoked if no decision within 30 days as per Rule 22 (3) of CGST/PGST Rules, 2017.

In a recent case before the Punjab and Haryana High Court, Shri Balaji Agro Industries brought forth a matter concerning the suspension of their Goods and Services Tax (GST) registration. The petitioner argued that the respondents failed to adhere to the prescribed timeline for deciding on the issue within 30 days, as mandated by Section 22(3) of the CGST/PGST Rules, 2017.

Despite an earlier court order directing the respondents to provide reasons for the delay in decision-making, they failed to submit an affidavit.

The petitioner’s counsel emphasized the urgency of the matter, highlighting that a Show Cause Notice was issued on 21st November 2023, to which the petitioner responded by 28th November 2023. The respondents, upon issuing the show cause notice, suspended the petitioner’s registration, effective from 21st November 2023. Per Rule 22(3) of the Rules, the respondents were obliged to decide on the show cause notice and the objections raised within 30 days, either canceling the registration or deciding otherwise.

However, it became evident that more than 30 days had elapsed without any decision from the respondents. Consequently, the petitioner’s registration remained suspended for almost four months. In light of Rule 21-A Sub-clause (4) of the Rules, which stipulates that the suspension of registration is deemed revoked upon the completion of proceedings under Rule 22, it was apparent that the suspension should be lifted. Thus, the court held that the suspension of the petitioner’s registration, effective from 21st November 2023, shall stand revoked.

The court directed for the matter to be listed for further hearing on 18th April 2024, and instructed the respondents to file a reply by the next hearing date.

FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT

Learned counsel for the petitioner submits that the matter comes up today in terms of order dated 15.03.2024 passed by this Court wherein we directed the respondents to file short affidavit giving out reasons for not deciding the issue within 30 days’ period as prescribed under Section 22(3) of the CGST/PGST Rules, 2017 (for short “the Rules”).

No affidavit has been filed on behalf of the respondents.

Learned counsel for the petitioner insists that an interim order ought to be passed in favour of the petitioner as a Show Cause Notice was issued on 21.11.2023 and the petitioner had filed their reply to the show cause notice on 28.11.2023.

The respondents, while issuing the said show cause notice, had suspended the registration of petitioner w.e.f. 21.11.2023, and in terms of the reply filed by the petitioner, the respondents were required to decide the show cause notice and objections raised by the petitioner within a period of 30 days in terms of the Rule 22 (3) of the Rules which empowers the respondents to either cancel the registration w.e.f. the date or decide the same otherwise within 30 days.

However, it is apparent that more than 30 days have elapsed and no decision has been taken by the respondents on the show cause notice, while the petitioner suffers suspension of Registration for almost four months, we find that as per the provisions of Rule 21-A Sub-clause (4) of the Rules, the suspension of registration of the petitioner would be deemed to be revoked upon completion of the proceedings under Rule 22 of the Rules, but the proceedings were not completed within 30 days.

Thus, prima facie, we find that the suspension of the petitioner would deserve to be revoked. Accordingly, we pass orders that the suspension of the petitioner w.e.f. 21.11.2023 shall stand revoked.

List on 18.04.2024.

Let the reply be filed by the next date of hearing.

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