Delhi HC admits Petition challenging Validity of Provision for Suspension of GST Registration: Stays Notice [Read Order]

The Delhi High Court, last week admitted a petition by SSG Furnising LLP challenging the constitutional validity of Rule 21A of CGST Rules beingviolative of Article 19(1)(g) of the Constitution of India and a show-cause notice issued to propose removal of the Suspension of GST registration.

As per the Rule, a taxpayer who has applied for cancellation of GST registration will not be required to comply with GST return filing provisions during the suspension period.

The petitioner sought a direction quashing of the impugned show cause notice whereby the department proposed to remove the suspension of GST Registration of the Petitioner and to declare Rule 21A of the CGST Rules as ultra vires Constitution of India and CGST Act and to direct the Respondents to remove suspension of GST Registration of the Petitioner to allow carrying on the business that belongs to the Petitioner.

The counsel for the Petitioner, Mr.Puneet Rai stated that the impugned Show cause notice is vague and does not specify the reason as to why the cancellation proceedings have been initiated against the Petitioner. He argued that the reason mentioned in the show cause notice dated 14th February, 2022 only specifies the ground as “OTHERS”. According to him, the action of the department has thrown the Petitioner out of business which is violative of Article 19(l)(g) of the Constitution of India and has caused extreme hardship, irreparable loss, prejudice, distress and harassment to the Petitioner.

While granting interim relief to the petitioner,Justice Manmohan Justice and Dinesh Kumar Sharmaheld that “since in the present case, the petitioner’s registration has been lying suspended for more than forty days on the basis of a show cause notice which is bereft of any reason or fact, this Court stays the impugned notice dated 14th List on 4 February, 2022 and directs forthwith restoration of the GST Registration of the petitioner.”

To Read the full text of the Order CLICK HERE

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