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CMA Final · Indirect Tax Laws and Practice · Special Economic Zone Scheme

Under the Special Economic Zones Act, 2005, the Board is considering suspending the letter of approval of a Developer for persistently defaulting on its directions. What is the minimum written notice the Board must give the Developer before suspending the approval, and what must it do with the Developer's response?

The Board must give the Developer at least three months' written notice stating the grounds for suspension, and it must consider any cause the Developer shows within that notice period before it can suspend the letter of approval.

  1. ANot less than one month's notice, and it must record the Developer's reply without any need to consider it
  2. BNot less than three months' notice, and it must consider any cause shown by the Developer within the notice periodCorrect
  3. CNot less than six months' notice, and it must obtain Central Government approval on the reply
  4. DNot less than fifteen days' notice, and it must hear the Developer in person

Explanation

The Act says no letter of approval can be suspended unless the Board has given the Developer not less than three months' written notice stating the grounds, and has considered any cause shown within that notice period. A one-month or fifteen-day period is shorter than the statutory minimum, and the Act does not require six months or a personal hearing.

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