GST Registration Restored: Bombay High Court Intervenes Over Suspension and Recovery Action

Background of the Writ Petition

The Bombay High Court in Bi-Chem India Private Limited Vs Union of India examined the legality of steps taken by the GST authorities under the CGST/SGST framework, including:

  • A Show Cause Notice dated 18.02.2026
  • A recovery notice dated 03.02.2026
  • A provisional attachment order dated 03.02.2026

The assessee approached the Court under Article 226 of the Constitution, asserting that the Revenue’s actions were:

  • Arbitrary and perverse
  • Contrary to the principles of natural justice
  • Taken without proper application of mind
  • Beyond the scope of Section 29 read with Rules 21 and 21A of the CGST Rules
  • Ultra vires Section 83 of the CGST Act
  • In violation of Articles 14, 19(1)(g) and 21 of the Constitution of India

The assessee not only questioned the validity of the impugned notices but also sought restoration of suspended GST registration and release of bank accounts provisionally attached under Section 83 of the CGST Act.

Reliefs Claimed Before the Court

The petition set out several substantive prayers, which can be broadly grouped as follows:

1. Challenge to the Show Cause Notice

The assessee asked the Court to:

  • Declare that the Show Cause Notice dated 18.02.2026 (Exhibit “A”) was:
    • Perverse and arbitrary
    • Violative of natural justice
    • Issued mechanically and without due consideration
    • Inconsistent with the statutory scheme under Section 29 read with Rules 21 and 21A of the CGST Rules
    • In breach of fundamental rights under Articles 14, 19(1)(g) and 21

2. Challenge to Recovery and Provisional Attachment

The assessee further sought a declaration that the:

  • Recovery Notice dated 03.02.2026 (Exhibit “B”)
  • Provisional Attachment Notice dated 03.02.2026 (Exhibit “C”)

were:

  • Arbitrary and passed without proper application of mind
  • Ultra vires Section 83 of the CGST Act
  • Contrary to binding directions of the Supreme Court in Radha Krishan (supra)
  • Issued without jurisdiction or in excess of lawful authority

3. Quashing of Impugned Notices

The assessee prayed for issuance of a Writ of Certiorari to:

  • Call for the records of the case
  • Examine the legality and propriety of the impugned actions
  • Quash and set aside:
    • The Show Cause Notice dated 18.02.2026
    • The Recovery Notice dated 03.02.2026
    • The Provisional Attachment Notice dated 03.02.2026

4. Restoration of GST Registration

Through a Writ of Mandamus, the assessee requested:

  • Immediate restoration of GST registration suspended by the authorities
  • Continuation of business operations without hindrance on account of suspension

5. Defreezing of Bank Accounts

Another Writ of Mandamus was sought to:

  • Direct the concerned authority to forthwith defreeze the assessee’s bank accounts
  • Set aside the provisional attachment invoked under Section 83 of the CGST Act

6. Protection from Coercive Action

The assessee additionally requested directions:

  • Restraining the authorities and their subordinates from taking any coercive measures arising out of:
    • The Show Cause Notice dated 18.02.2026
    • The Recovery Notice dated 03.02.2026
    • The Provisional Attachment dated 03.02.2026
  • Until final disposal of the writ petition

7. Interim Relief

Pending final adjudication, the assessee sought interim orders: