Case Law Details
Laxmi Electricals And Construction Company Vs State of U.P. and Another (Allahabad High Court)
The Allahabad High Court considered whether an adjudication order dated 20.08.2024, arising from a show cause notice dated 31.05.2024, was invalid due to denial of an effective opportunity of hearing. The petitioner’s GST registration had already been cancelled on 01.06.2023, yet the show cause notice initiating adjudication proceedings was served only by uploading it on the GST Common Portal.
The Court noted the respondents’ own stand, as recorded in an earlier decision, that where a person’s GST registration has been cancelled, adjudication proceedings should be initiated by physical service of notice. It observed that once registration stands cancelled, the person is disabled from operating the Common Portal and is no longer expected to monitor it. Therefore, any post-cancellation adjudication notice should be served physically in accordance with Section 169(1)(a) and (b) of the U.P. GST Act, 2017.
The Court held that the failure to serve a physical notice resulted in a substantial violation of the principles of natural justice, depriving the petitioner of the opportunity to file objections and avail the statutory right of hearing under Section 75(4).
Accordingly, the High Court set aside the adjudication order and remanded the matter for fresh adjudication. It directed the authority to issue a fresh physical notice along with the relied upon documents, permit the petitioner to file a written reply, grant at least 15 days’ advance notice for hearing, and conclude the proceedings in accordance with law.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Having heard learned counsel for the petitioner and learned Standing Counsel for the State respondents, briefly it has to be considered if the adjudication order dated 20.08.2024 arising from show cause notice dated 31.05.2024 suffers from patent illegality resulting in complete denial of opportunity to object or being heard in the adjudication proceedings. Undeniably, the petitioner’s registration stood cancelled by order dated 01.06.2023. Thereafter the show cause notice was first issued to the petitioner through electronic mode, by uploading it on the Common Portal.
2. It is the own case of the respondents, as noted in M/S Bambino Agro Industries Ltd. Vs. State of Uttar Pradesh & Anr.; 2025:AHC:229995-DB, that in cases where registration may have been cancelled, such persons may be proceeded in adjudication proceedings only against service of physical notice. The circular providing for such measure follows the dictate of common sense. Once the registration is cancelled and the registered persons thus disabled from working on the Common Portal and in any case, are relieved of obligation to check the Common Portal thereafter, it is wholly natural and practical that any adjudication notice issued after cancellation of registration may be served through physically in terms of the provisions of Section 169(1)(a)(b) of the U.P.G.S.T. Act, 2017.
3. To the extent, no such physical notice has been issued or served on the petitioner, rules of natural justice are seen to have been substantially violated as may have prevented the petitioner from filing any objection/reply to such show cause notice.
4. In view of that breach of essential principles of natural justice noted, no useful purpose may be served in keeping the present writ petition pending or calling for counter affidavit at this stage. Primarily, the petitioner’s right to be heard is statutorily protected under Section 75 (4) of the said Act.
5. Accordingly, the impugned adjudication order dated 20.08.2024 is set aside and the matter is remitted to the respondent no. 2 to pass a fresh order strictly in accordance with law.
6. For that purpose, we further provide the said respondent may issue a fresh notice to the petitioner through physical mode, along with copies of Relied Upon Documents (‘RUDs’ in short) within a period of ten days from today.
7.Subject to such compliance, the petitioner shall have two weeks therefrom to file his written reply through physical mode and thereafter the respondent no. 2 may fix appropriate date for hearing in the proceedings with at least 15 days advance notice. Subject to that compliance, the petitioner undertakes to cooperate in the proceedings and not seek any adjournment. Thereafter the proceedings may be concluded not later than two months from the date of filing of reply by the petitioner.
8. The present petition is disposed of.
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