Facts of the Case:

The petitioner, a registered partnership firm under GST, had its GST registration suspended by the authorities citing rival claims between partners and alleged forged documents.

The petitioner contended that suspension was ordered without investigation into his complaint regarding unauthorized changes in GST credentials and without granting prior notice or hearing, thus violating principles of natural justice.

The petitioner prayed for quashing the suspension order, restoration of portal access, investigation into forged documents, reinstatement of original signatory credentials, and compensation for business losses. During pendency, the High Court had earlier directed provisional relief by restoring portal access and staying the suspension order, enabling the petitioner to file updated returns. 

Issue: Whether the suspension of GST registration, based on disputed partnership claims and alleged forged documents, without prior notice or opportunity of hearing, is sustainable under the CGST/BGST Act.

Held that:

The Court noted that no notice or hearing was given before suspending the registration, despite the fact that at the time of registration the authorized signatory was duly designated as Mr. Rajiv Ranjan. Suspension of registration on the ground of partner disputes, without adjudication and without following due process, violates principles of natural justice.

The Court held that Business continuity must be preserved, and disputes between partners should not result in killing the business.

The Court directed to grant fresh opportunity to all parties to file responses, hear them, and pass a reasoned order within four months. Till such decision is taken, the suspension order shall remain stayed, and the petitioner’s registration will continue to operate.

Case Name: M/s Shiv Construction Versus The State of Bihar, The Joint Commissioner, State Taxes, Supaul dated 01.09.2025

To read the complete judgement 2025 Taxo.online 2235