Patna High Court protects business continuity; suspension of GST registration without prior notice set aside pending fresh hearing and decision.

Case: M/s Shiv Construction v. State of Bihar & Others
Citation: CWJC No. 17716 of 2024
Court/Bench: Patna High Court
Coram: Rajeev Ranjan Prasad, J. and Sourendra Pandey, J.
Date of Decision: 01-09-2025

Whether GST registration can be suspended under Section 29(2)(e) without affording notice and hearing, amid inter se disputes among partners.

• Petitioner-firm’s GST registration was suspended on 31-08-2023, citing protection of revenue under Section 29(2)(e).
• Rival partners raised conflicting claims; forged-document allegations surfaced regarding changes in GST credentials.
• No prior notice or hearing preceded the suspension; State admitted lack of pre-decisional hearing.
• Earlier interim orders restored portal access and stayed suspension; returns and responses were subsequently filed.

It was held that suspension without notice violated principles of natural justice. The Court directed the Joint Commissioner, State Taxes, Supaul, to grant fresh opportunity to all stakeholders and pass a reasoned order, preferably within four months. Until such final decision, the suspension order shall not be given effect; earlier interim stay continues.

Pre-decisional hearing is indispensable before suspending GST registration; intra-partner disputes should be addressed without crippling the going concern.

Guard authorized signatory credentials and promptly report unauthorized changes on the GST portal. Where suspension is proposed without notice, seek immediate relief and insist on a hearing. Maintain robust documentation (partnership deeds, resolutions, KYC trails) to support authority verification during disputes.