NOTICES UNDER SECTIONS 25 AND

Para 2.8

NOTICES UNDER SECTIONS 25 & 29

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voluntary cancellation by taxpayer, as provided in section 29. Suspension is a pre-emptive step which DOES NOT require that a notice be issued before suspending the registration. There is no violation of principles of natural justice as there is no finality in suspension and full restitution is possible. Taxpayer will not be prejudiced either by lapse of credit or in any other manner, in case of suspension. But this exceptional and pre-emptive power cannot be exercised whimsically. It must be invoked only for good and sufficient reasons. And these reasons are expressly provided in section 29(1) and 29(2). Section 29 confers jurisdiction to Proper Officer only when it can be shown that those ‘circumstances’ exist. And this is a question of fact and not one of mere guesswork. In the absence of any notice (prior to suspension of registration) it may not be possible to get full information of the reasons for suspension of registration. But the notice in REG31 will be issued ‘after’ suspension under rule 21A(2A). Such notices are ‘post decisional hearing’ notices and this is legally valid. Purpose of this notice is to put taxpayer at notice to answer the causes (for suspension and consequent cancellation) listed therein. It is important to note that the answers cannot be left without proper substantiation. And usually these answers will not entail detailed investigation and causes stated in REG31 will be self-explanatory. Since registration is suspended and unresolved suspension can lead to cancellation, taxpayer must address causes for suspension swiftly. And this may not be the time to question jurisdiction or validity of those causes without providing material to redress delinquencies and establish need for withdrawal of suspension. While taxpayers may have certain reasons for seeking voluntary cancellation (discussed later) or certain extenuating circumstances for allowing the registration to become delinquent (also discussed later), Proper Officer is answerable for: (a) outstanding tax, interest, late fee and penalties due; (b) compliance with section 29(5) in respect of credits availed. Proper Officer is neither obliged to encourage continuation of registration nor rush to cancel registration without good reasons. Suspension may take effect from the date of application by taxpayer or as determined by Proper Officer. Suspension stops facility to issue tax invoice and collect tax, file returns, generate e-waybills, claim refund and avail other facilities on the Common Portal. Therefore, it is imperative for taxpayers to evaluate: (a) need for restoration of registration; (b) unsuitability of fresh registration. In view of the relief of credit being allowed under section 18(1), there is generally no pressing need to continue the same GSTIN. There may be some