M/S Shiv Construction vs. The State Of Bihar

Held

The Court held that the suspension of the petitioner's GST registration was made without providing prior notice or an opportunity of hearing to the petitioner, thus violating the principles of natural justice. The Court noted that both the State-respondents and Respondent No. 3 admitted that no notice or hearing was given prior to the suspension order. Consequently, the Court directed the Joint Commissioner, State Taxes, Supaul, to provide fresh opportunities to the parties to file their responses to the complaint and to conduct a hearing. An appropriate order is to be passed preferably within four months. Until a final decision is taken by Respondent No. 2, the suspension order dated August 31, 2023, shall not be given effect to. The Court also noted that an interim order dated July 10, 2025, had stayed the operation of the suspension order, and the petitioner had filed updated returns and a response. The Court acknowledged that prior to that, an order dated April 30, 2025, had directed access to the portal for the petitioner to submit its response. The writ petition was allowed to the extent indicated.

Facts

The petitioner, M/s Shiv Construction, a partnership firm registered under GST, filed a writ petition challenging the suspension of its GST registration. The suspension order, dated August 31, 2023, was issued by the Joint Commissioner, State Taxes, Supaul. The petitioner contended that its registration was suspended without due investigation into its complaint about unauthorized changes made to its registration details using forged documents, violating principles of natural justice. The revenue's counter affidavit indicated that the suspension was due to dubious and contradictory claims between rival partners, aiming to protect revenue under Section 29(2)(e) of the CGST/BGST Act. Respondent No. 3, claiming to be a partner, also filed a counter affidavit.

Key Issues

1. Whether the suspension of the petitioner's GST registration, as per Annexure-R-2/1, is liable to be quashed for violation of the principles of natural justice, specifically for not providing prior notice and an opportunity of hearing to the petitioner? Petitioner's Arguments: The petitioner argued that the suspension order was passed in violation of natural justice as no notice or opportunity of hearing was provided before suspending its GST registration. The petitioner also alleged that unauthorized changes were made to its registration based on forged documents, and the authorities failed to investigate this complaint properly. Revenue/State's Arguments: The State respondents, through their counter affidavit, justified the suspension by stating that claims and counter-claims of rival partners were found dubious and contradictory. They asserted that the suspension was temporary to protect the interest of the revenue, in accordance with Section 29(2)(e) of the CGST/BGST Act. They also indicated that an inquiry was conducted by the Circle In-charge ICST, Supaul, whose report was considered.