Proceedings must be concluded to meet its statutory requirements

Case Details:

Issue- In the above case, petitioner has challenged notice-cum-order dated 4-2-2021, vide which, petitioner’s registration certificate has been suspended. A search was conducted on petitioner’s premises on 3-2-2021, in furtherance whereof, respondent issued a notice dated 4-2-2021, proposing to cancel petitioner’s registration certificate. Simultaneously with the notice proposing to cancel the registration, the respondent kept his registration certificate under suspension with immediate effect. Petitioner submitted that pursuant to the notice of cancellation of registration dated 4-2-2021, petitioner has furnished his detailed reply/response on 20-3-2021, yet the respondents have not passed any final order regarding petitioner’s registration, due to which petitioner’s right to trade has been kept in suspended animation.

Held- It was held that without pronouncing upon petitioner’s contention that on passing of a period of 30 days of the reply, the suspension stands annulled or vitiated, this Court hastens to add that provisions of sub-rule (3) of rule 22 clearly mandates an order to be passed within 30 days of receipt of the reply. Suspension of a registration of an assessee has its own consequences as it brings the entire business of an assessee to a stand still. In a way it is worse than cancellation. Against cancellation, an assessee can take legal remedies but against suspension pending an enquiry, even if the assessee chooses to take remedies, the authorities or the Court(s) would normally show reluctance. In the opinion of this Court, the proceedings of cancellation of registration cannot be kept hanging fire on any pretext, including that assessee failed to file reply within the time allowed. Authority issuing the notice is statutorily bound to pass order in terms of sub-rule (3) of rule 22 of the Rules.