Facts of the Case

The petitioner, M/s. Darshan Cotton Industries, GSTIN 36AAIFD0014H1ZY, Bhainsa, Nirmal, Telangana, represented by its Managing Partner Mr. Chetan Mahashettywar, challenged the suspension of its GST registration ordered by the Superintendent of Central Tax, Central Excise and Customs, Nirmal GST Range (Respondent No.1), pursuant to a show-cause notice dated 2 March 2023 issued under the Goods and Service Tax Act, 2017, for cancellation of registration. The show-cause notice followed an Order-in-Original dated 25 September 2019 imposing penalty for delayed payment of GST, which the petitioner had separately challenged in W.P.No.30428 of 2023; that petition was disposed of by the same Bench on 9 November 2023, reserving the petitioner's right to prefer a statutory appeal. The petitioner also sought interim suspension of the operation of the registration-suspension order pending disposal of this writ petition.

Issues Involved

  1. Whether the suspension of the petitioner's GST registration, and the show-cause notice for its cancellation dated 2 March 2023, was arbitrary and issued without sufficient opportunity of hearing.
  2. Whether the writ petition was maintainable while the underlying Order-in-Original imposing the penalty was already under challenge by way of a statutory appeal.

Petitioner's Arguments

  • The order suspending the petitioner's registration, and the show-cause notice dated 2 March 2023 itself, were passed without granting sufficient opportunity of being heard, making the action arbitrary and contrary to the provisions of the GST Act.
  • The suspension and consequential show-cause notice violated Article 19(2) of the Constitution and the principles of natural justice, and should be set aside as null and void.
  • The respondent should be directed to revoke the suspension and restore the petitioner's registration bearing GSTIN 36AAIFD0014H1ZY, and, pending disposal, the operation of the suspension order should itself be suspended.

Respondent's Arguments

  • The Senior Standing Counsel for CBIC, appearing for the Superintendent of Central Tax and connected respondents, pointed out that the impugned show-cause notice and suspension flowed directly from the Order-in-Original dated 25 September 2019 imposing penalty for delayed GST payment.
  • Since that Order-in-Original was itself under challenge by the petitioner in a separate writ petition (W.P.No.30428 of 2023), which the same Bench had already disposed of reserving the petitioner's right to appeal, the respondents contended that the consequential suspension proceedings should not be independently interfered with while the primary order remained open to statutory appeal.

Court Order/Findings

  • The Court noted that it had, on 9 November 2023, already disposed of the petitioner's connected writ petition (W.P.No.30428 of 2023) challenging the underlying Order-in-Original, reserving the petitioner's right to prefer a statutory appeal.
  • As long as that order remains under challenge by way of appeal, it would be difficult to entertain a separate writ petition against the consequential show-cause notice for suspension of registration; if the petitioner avails the appellate remedy and pays the requisite pre-deposit, the Department's consequential steps may automatically lose their efficacy.
  • The Court declined to entertain the writ petition at this juncture and permitted the petitioner to take appropriate recourse as available under law.
  • The writ petition was disposed of without costs, and pending miscellaneous petitions were closed.

Important Clarification

  • Where the primary Order-in-Original underlying a GST registration suspension is itself under statutory appeal, a separate writ challenging only the consequential suspension/show-cause notice is unlikely to be entertained.
  • Taxpayers should pursue the statutory appellate remedy (with the requisite pre-deposit) against the Order-in-Original itself; success there can render consequential departmental action, such as a registration suspension, automatically ineffective without needing separate writ relief.
  • Filing multiple, overlapping writ petitions against the root order and its consequential notices can lead courts to decline interference in the later-filed petition as premature.

Sections Involved

  • Goods and Service Tax Act, 2017 — governs registration, suspension/cancellation of registration, and the show-cause notice procedure.
  • Article 226, Constitution of India — writ jurisdiction invoked to challenge the suspension order and show-cause notice.
  • Article 19(2), Constitution of India — cited by the petitioner as violated by the manner of issuance of the impugned notice.

Decision – In Favour of

Department, procedurally. The writ petition was not entertained; the petitioner was left to pursue the statutory appellate remedy against the underlying Order-in-Original, with the Court noting that success in appeal (subject to pre-deposit) could itself neutralise the consequential suspension.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court for the State of Telangana at Hyderabad
  • Case No.: Writ Petition No. 30434 of 2023
  • CNR: Not available on record
  • Coram: Justice P. Sam Koshy & Justice N. Tukaramji
  • Decision Date: November 9, 2023
  • Disposal Nature: Disposed of with liberty to pursue statutory appeal

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