GST Order Quashed as Notice Was Uploaded Only on Portal After Registration Cancellation

4655 Jagdish Singh Basera Security Agency Vs State of U.P. (Allahabad High Court)

The Allahabad High Court allowed a writ petition challenging an order dated 14.08.2024 passed under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner contended that its GST registration had already been cancelled on 26.12.2022 and that no business activities were carried out thereafter. Despite the cancellation, a show cause notice was merely uploaded on the GST portal, following which the impugned tax order was passed.

The Court noted that once a taxpayer’s GST registration stands cancelled, the taxpayer is not obligated to continue checking the GST portal for notices. In such circumstances, service of a show cause notice must be effected through alternative modes available under law rather than solely through portal upload.

The petitioner relied upon the decision of the coordinate Bench in M/s Katyal Industries v. State of U.P. and others, and the Court agreed with the principle laid down therein. The Court held that issuing a notice only through the GST portal after cancellation of registration resulted in a violation of the principles of natural justice, as the petitioner was deprived of a proper opportunity to respond.

Accordingly, the High Court quashed and set aside the order dated 14.08.2024 passed by the Deputy Commissioner under Section 73 of the Act. However, the Court granted liberty to the department to issue a proper notice to the petitioner and proceed in accordance with law. The writ petition was disposed of with these directions.

FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT

1. Heard Shri Anit Vishal Srivastav, learned counsel for the petitioner, as well as Shri Sanjay Sarin, learned Additional Chief Standing Counsel for the State and perused the record.

2. This is a writ petition under Article 226 of the Constitution of India wherein the petitioner is aggrieved by the order dated 14.08.2024 passed by the respondent No.2/Deputy Commissioner, Lucknow, Sector-12, Lucknow (B) Lucknow I, State Tax, U.P., under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as “the Act”).

3. Factual matrix in the matter is that the petitioner’s registration under the Act was cancelled on 26.12.2022. Subsequent to the same, no business was carried out by the petitioner. It appears that a show cause notice was uploaded on the GST portal and subsequent to the same, the order impugned was passed under Section 73 of the Act.

4. Once the registration has been cancelled, the petitioner is not obligated to check GST portal. The mode of service of any show cause notice has to be by way of alternative means to the petitioner.

5. Counsel appearing on behalf of the petitioner relies upon an order passed by the coordinate Bench of this Court in M/s Katyal Industries v. State of U.P. and others, Neutral Citation No.2024:AHC:23697-DB. We are essentially in agreement with the said principle enunciated by the coordinate Bench in the said order.

6. We find that there has been violation of the principle of natural justice, and accordingly, the impugned order dated 14.08.2024 passed by the respondent No.2 is quashed and set aside. The department shall be at liberty to issue a proper notice to the petitioner and act in accordance with law.

7. With the above direction, the writ petition is disposed of.