GST Rules Amendment omitting Opportunity to Assessee before Suspension of Registration: Bombay HC issues Notice to Centre/State Govts

In a recent petition filed challenging the amendment in Central GST Rules, 2017 omitting the provision of opportunity of hearing to the assessee before the suspension of GST registration, the Bombay High Court has issued notices to the Central and State Governments.

The petitioner, SAT Industries Limited contended that the original Sub-Rule (2) of Rule 21A of the Central Goods and Service Tax Rules, 2017 provided that a party shall be given a reasonable opportunity of being heard before passing of a suspension order, which portion has been deleted by a Notification dated 22nd December, 2020. It was further submitted that this goes against the principle of natural justice because the implication of such a suspension is drastic.

A registered person whose registration has been suspended cannot make any taxable supply during the period of suspension and shall not be granted any refund during the period of suspension. Therefore, Petitioner chalenged the omission of the words “after affording the said person a reasonable opportunity of being heard” in Sub-Rule (2) of Rule 21A of the CGST Rules, 2017.

Listing the matter to 10^th October, 2022, Justice K.R. Shriram & Justice A.S. Doctor observed that “the Petitioner is challenging both CGST as well as MGST Rules in this regard. Therefore, notice has to be issued to the learned Attorney General of India as well as the Advocate General.”

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