Delhi HC quashes SCN as GST Registration cannot be suspended for more than 2 months without Stating Reasons [Read Order]

The Delhi High Court has quashed the show cause notice as GST registration cannot be suspended for more than 2 months without Stating Reasons.

The  Petitioner, Shakti Shiva Magnets Private Limited has filed this petition against the SCN issued dated November 11, 2021, by Revenue Department due to which the Petitioner’s registration was suspended for more than 2 months with no sufficient explanation or reason, or fact.

The Petitioner contended that as per Rule 21A of the Central Goods and Services Tax Rules, 2017that describes the conditions needed to be fulfilled for suspending a registration and Rule 22(3) of the CGST Rules wherein it is provided that an assessee’s registration can be suspended only for 30 days and the cancellation proceeding has to be concluded within the same period.

The Respondent prayed for 3 days’ time to issue a fresh detailed SCN to the Petitioner and for fifteen days’ time to decide the same.

The division bench of Justice Manmohan and Justice Navin Chawla observed that the impugned SCN contains no fact or reasons and is not supported by any document based on which the Petitioner’s registration could be suspended.

The court directed the Respondent to restore the Petitioner’s GST registration. However, allowed the Respondent to issue a fresh SCN mentioning all the relevant facts and reasons within a week. Further directed the Respondent to issue a practice direction so that in future, if any SCN for cancellation of GST registration is issued, the same is not bereft of any material particulars or reasons.

SHAKTI SHIVA MAGNETS PRIVATE LIMITED vs ASSISTANT COMMISSIONER & ORS.

CITATION: 2022 TAXSCAN (HC) 190

 To Read the full text of the Order CLICK HERE

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