GSTN cancellation proceedings cannot be kept hanging when the assessee failed to file the reply within given time period
Writ Petition before the High Court of Rajasthan challenging the notice-cum-order dated 04.02.2021, vide which, petitioner’s registration certificate has been suspended.
- A search was conducted on petitioner’s premises on 03.02.2021, in furtherance whereof, respondent issued a notice dated 04.02.2021, proposing to cancel petitioner’s registration certificate. Also kept his registration certificate under suspension with immediate effect.
- To the notice of cancellation of registration dated 04.02.2021, petitioner replied to the response on 20.03.2021, yet the respondents have not passed any final order regarding petitioner’s registration, due to which petitioner’s right to trade has been kept in suspended animation.
- The petitioner was required to file reply to the notice within a period of 7 days, has failed to file reply within the stipulated time and the same came to be filed as late as on 20.03.2021.
Observations and Findings
Under section 29 of the Rajasthan Goods and Service Tax Act, 2017, amended vide Finance Act, 2020 and Rules 21 and 22 of the Rules framed states that though suspension of registration certificate does not envisage grant of opportunity of hearing in express terms, but the principles of natural justice warrant that before suspending a license, a reasonable opportunity of hearing must be granted to an assessee. In Accordance the Assessing Authority is required to take a final decision pursuant to notice of cancellation of registration at the earliest, so that a businessman’s fundamental rights enshrined and guaranteed under Article 19(1) (g) of the Constitution of India are not kept in abeyance on account of suspension of registration.
Under sub-rule (3) of Rule 22 the authority concerned is required to cancel the registration (if required) within a period of 30 days of the date of the reply to the show cause notice. Here in this case the petitioner did not file reply by 15.02.2021, as was required by the notice dated 04.02.2021, but then the notice dated 04.02.2021, requiring the petitioner assessee to file reply within 7 days from the date of service of the notice itself was contrary to the statutory provisions.
Sub-rule (2A) reveals that the Assessing Authority is required to give 30 days’ time to explain the reason why the registration ought not to be cancelled.
Justice Dinesh Mehta held that the proceedings of cancellation of registration cannot be kept hanging fire on any pretext, including that assessee failed to file reply within the time allowed. Authority issuing the notice is statutorily bound to pass order in terms of sub-rule (3) of Rule 22 of the Rules. In regard of facts and circumstances of this case court also considered that the petitioner has omitted to file reply within time allowed and even within 30 days of receiving the notice dated 04.02.2021, the present writ petition is disposed of with a direction to the petitioner to put forth all the submissions including the submission about automatic revocation of suspension advanced before this Court. Petitioner may file supplementary reply/written arguments.
As respondent being prejudicial to the petitioner, its right to take up appropriate legal remedies against such order shall obviously stand reserved, as this Court has not pronounced on merit of the case.
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