Sri Murlidhar Pareek vs. The Union Of INDIA And Ors

Held

The Court held that the delay in deciding the petitioner's rectification application, filed under Section 161 of the Assam Goods and Services Tax Act, 2017, against an order under Section 73, was unacceptable. The Court noted that over a year had passed without a decision, making the demand uncertain and hindering the petitioner's ability to pursue statutory remedies, including filing an appeal. The Court found that the Act provides for rectification of orders, and the proper officer's inaction was contrary to the spirit of the law. The Court directed the proper officer (Respondent No. 5) to dispose of the rectification application forthwith, not later than 15 days from the date of the order. The Court further directed that if the rectification application is not decided within this period, the suspension of the petitioner's registration, vide the Show Cause Notice dated August 29, 2026, shall automatically stand revoked. The petitioner was also directed to appear for a hearing on October 16, 2026, and to submit a reply to the Show Cause Notice. The Court also observed that if the rectification application is decided against the petitioner, it would not prejudice his right to avail other legal remedies. The ratio is that statutory authorities must act diligently in deciding applications filed under relevant provisions of the Act, and prolonged inaction can lead to the revocation of adverse actions taken against the assessee.

Facts

The petitioner, Sri Murlidhar Pareek, is aggrieved by the suspension of his GST registration. This suspension was initiated by a Show Cause Notice dated August 29, 2026, by the respondent authorities, citing non-payment of dues as per an order passed under Section 73(9) of the Assam Goods and Services Tax Act, 2017. The original order under Section 73 was passed on February 28, 2025. The petitioner had filed a rectification application on March 30, 2025, which remained undecided for over a year. The petitioner argued that the delay in deciding the rectification application prevented him from ascertaining the demand and filing an appeal. The suspension of registration had severely impacted his business. Over 20% of the demand had already been realized.

Key Issues

1. Whether the continued suspension of the petitioner's GST registration is justified when a rectification application filed under Section 161 of the Assam Goods and Services Tax Act, 2017, against an order passed under Section 73 of the Act, has remained undecided for over a year, thereby rendering the demand uncertain and preventing the petitioner from availing statutory remedies like appeal? Petitioner's arguments: The petitioner contended that the non-disposal of the rectification application has led to an uncertain demand, preventing him from filing an appeal. He argued that the suspension of registration, initiated by a Show Cause Notice dated August 29, 2026, has severely impacted his business. He also noted that if he had filed an appeal under Section 107 by depositing 10% of the contested demand, there would have been an automatic stay. He relied on Section 161 of the Act for rectification. Revenue's arguments: The revenue, represented by the Finance and Taxation Department and CGST Department, did not explicitly record arguments against the petitioner's primary contention regarding the undecided rectification application. However, their counsel referred to Sections 75 and 161 of the Act, implying the need for a hearing prior to a decision on the rectification application.