Suspension of GST registration is counterproductive and affects tax recovery


The Hon’ble Calcutta High Court in Bisweswar Midhya v. The Superintendent, CGST [MAT No. 1376 of 2022 with IA No. CAN 1 of 2022 dated September 01, 2022] disposed off the writ petition directing the assessing authority to forthwith revoke the suspension of the assessee’s registration. Further directed the assessing authority to issue show cause notice within seven days from the date of receipt of this order.


Bisweswar Midhya (“the Appellant”) filed a writ petition challenging a show cause notice (“SCN”) dated July 21, 2022. The SCN was issuedfor cancellation of Goods and Services Tax (“GST”) registration granted to the Appellant. The primary ground on which the Appellant challenged the SCN was that there was no final order of adjudication passed by the competent assessing authority (“the Respondent”) quantifying the tax liability payable by the Appellant.

Moreover, summons were issued to the Appellant and the Appellant has been responding to the summons by submitting representations to the Respondent, but the Respondent did not proceed further pursuant to the summons. The writ petition is still pending and the direction to file affidavits has been issued. The Appellant is aggrieved by non-granting of any interim order pending disposal of the writ petition.

Therefore, the Appellant filed this intra-court appeal.


Whether or not suspension of GST registration affects the recovery of taxes?


The Hon’ble Calcutta High Court in MAT No. 1376 of 2022 with IA No. CAN 1 of 2022 dated September 01, 2022, held as under:

  • Stated that if the registration of the Appellant is cancelled, the Appellant cannot carry on its business in the sense that no invoice can be raised by the Appellant. This would ultimately impact the recovery of taxes. Therefore, the Respondent has to take a pragmatic view in the matter.
  • Disposed off this Intra-court appeal as well as the writ petition by directing the Respondent to revoke the suspension of the Appellant’s license and directed the Respondent to issue an SCN within seven days from the date of receipt of the server copy of this order.
  • Directed that the Appellant shall be given a reasonable time to submit his objection as against the SCN. Thereafter, the SCN shall be adjudicated and a reasoned order should be passed on merits and in accordance with the law.

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CA Bimal Jain
A2Z Taxcorp LLP is a boutique Indirect Tax firm having its offices at New Delhi and Guwahati specializing in GST, Central Excise, Custom, Service Tax, VAT, DGFT, Foreign Trade Policy, SEZ, EOU, Export – Import Laws, Free Trade Policy, etc. It is a professionally managed firm having a team of experienced and distinguished Chartered Accountants, Company Secretary, Lawyers, Corporate Financial Advisors and Tax consultants to provide various services like litigation and representation, transaction advisory, diagnostic reviews/ health checks, audit defense & protection, retainership & compliance, configuration of tax efficient business model etc. Its clientele consists mainly of Foreign MNC, large/mid-sized Indian companies which includes exporters, FMCG, consumer durables, automobiles, aerated beverages, ceramic tiles, real-estate, hospitality, etc. Our clients include Varun Beverages Limited, Kajaria Ceramics Limited, L.G. Electronics India Private Limited, Shipra Hotel Limited, Multani Pharmaceuticals Limited, Shangri-La Eros Hotel etc. Flat No. 34B, Ground Floor, Pocket - 1, Mayur Vihar, Phase–I, Delhi – 110091 India Desktel:+91-11-42427056 Mobile:+91 8076563802
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