GST Registration Suspension Case

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BI-CHEM INDIA PRIVATE LIMITED vs. UNION OF INDIA High Court of Judicature at Bombay GST registration was suspended and recovery/provisional attachment steps were initiated without proper hearing, but during the hearing the Department withdrew the suspension and the Court ordered immediate restoration with due-process hearing. Issue Whether suspension of GST registration, issuance of show cause notice, recovery notice and provisional attachment under Section 29 and Section 83 could continue when the Assessee alleged absence of due procedure and breach of natural justice.

Rule Action affecting registration, recovery and provisional attachment must follow the procedure prescribed under the CGST Act and Rules 21 and 21A of the CGST Rules, and the Assessee must be given a fair opportunity of hearing. Recovery action also has to be taken only by following due process of law. Application The Assessee had challenged the suspension of registration, the show cause notice dated 18.02.2026, and the recovery and provisional attachment notices dated 03.02.2026. During the hearing, the Department took instructions and fairly stated before the Court that the suspension would be withdrawn and the registration would be restored. The Department also stated that a proper hearing would be granted on the show cause notice, and that recovery would be pursued only after following lawful procedure. In view of this statement, the Court found that no further adjudication was required at that stage.

Conclusion The High Court accepted the Department’s statement, directed that the suspension stood withdrawn, and ordered immediate restoration of registration. It further directed the Assessee to file documents within 10 days, required hearing on the show cause notice thereafter, and ordered that the recovery notice should not be acted upon unless proper procedure is followed. All contentions were kept open. Impact Analysis This order reinforces that GST registration cannot be kept under suspension and coercive recovery cannot proceed casually without hearing and lawful process. It is useful for Assessees facing abrupt suspension, attachment or recovery action in breach of natural justice.