The Punjab and Haryana High Court in the case of M/s. Shri Balaji Agro Industries V/S State Of Punjab And Another vide CWP-6160-2024 (O&M) dated 22.03.2024, has held that suspension of GST registration is deemed to be revoked if a show cause notice is not decided within 30 days of reply.

In this case, the respondents/department has issued a show cause notice suspending the registration of the petitioner w.e.f. November 21, 2023. 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 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.

The petitioner/assessee contended that the suspension of the petitioner's GST registration beyond the prescribed time limit violated his Article 19(1)(g) rights, as suspension of the GST registration leads to a business being brought to a complete standstill. Rule 21A(3) prohibited the petitioner from making any taxable supply during the period of suspension. Rule 21A(4) provided for deemed revocation of suspension upon completion of proceedings by the proper officer, with effect from the date on which the suspension had come into effect. Rule 22(3), read along with Rule 21A(4), must be interpreted to hold that if the proper officer fails to pass an order under the show cause notice within 30 days, the proceedings must be deemed to be completed and the suspension ought to be revoked.

The High Court observed that the GST Department had not adjudicated upon a Show Cause Notice dated November 21, 2023, which had also suspended the petitioner's GST registration from the same date. The Court allowed interim relief for revocation of the suspension of the petitioner's GST registration.