Punjab & Haryana HC Revokes GST Suspension

In a significant ruling on March 22, 2024, the Punjab and Haryana High Court rendered a landmark decision in the case of M/S Shri Balaji Agro Industries vs. State of Punjab and Another (CWP-6160-2024), addressing the suspension of Goods and Services Tax (GST) registration. 

Case Background

The case revolves around the suspension of Goods and Services Tax (GST) registration of the petitioner, Shri Balaji Agro Industries. The petitioner, a business entity engaged in agricultural activities, found itself embroiled in legal proceedings due to actions taken by the respondents, namely the State of Punjab and Another.

The emergence of the dispute traces back to a Show Cause Notice issued to the petitioner on 21st November 2023 by the respondents. This notice likely pertained to alleged violations or discrepancies in the petitioner’s GST compliance. In response to the notice, the petitioner diligently filed their reply within the stipulated timeframe, submitting it by 28th November 2023. However, rather than resolving the matter promptly, the respondents took the step of suspending the petitioner’s GST registration.

Legal Challenge

Challenging the suspension of their GST registration, the petitioner, represented by legal counsels approached the Punjab and Haryana High Court. Their primary contention rested on the purported failure of the respondents to adhere to the mandated timeline stipulated under Rule 22(3) of the CGST/PGST Rules, 2017.

Under Rule 22(3), it was binding upon the respondents to adjudicate upon the show cause notice and the objections raised by the petitioner within a 30-day timeframe. However, it arises that the respondents exceeded this prescribed limit without furnishing a conclusive decision and also failed to submit an affidavit for the same.

Court's Analysis and Verdict

The bench of Justice Sanjeev Prakash Sharma and Justice Sudeepti Sharma undertook a comprehensive analysis to arrive at a verdict. It was observed that under Rule 22(3), tax authorities are entrusted with the responsibility of adjudicating upon show cause notices and objections raised by taxpayers within a prescribed 30-day window. However, it became evident that the respondents, despite being obligated by law to render a decision within the stipulated timeframe, failed to do so in the present case. Despite the petitioner’s timely response to the show cause notice, the lapse of the designated 30-day period without a conclusive decision amounted to a breach of procedural requirements.

Furthermore, the court noted the absence of any affidavit from the respondents elucidating the reasons for the delay in decision-making, despite a prior directive from the court to do so. The court concluded that the suspension of the petitioner’s GST registration was unjustified in light of the respondent’s failure to adhere to the prescribed timeline. 

This verdict underscored the court’s commitment to upholding procedural fairness and ensuring adherence to statutory timelines in administrative actions. By rectifying the procedural lapse and restoring the petitioner’s GST registration, the court reaffirmed its role in safeguarding the rights of taxpayers and promoting transparency in governance.


The Punjab and Haryana High Court’s decision to revoke the suspension of GST registration for M/S Shri Balaji Agro Industries, citing the respondents’ failure to adhere to prescribed timelines and procedural fairness, underscores the judiciary’s commitment to upholding taxpayer rights and ensuring accountability in administrative proceedings. This landmark ruling serves as a beacon of hope for businesses facing undue delays, emphasizing the importance of timely and transparent decision-making in regulatory matters. 

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