Subhash Kumar Vs Commissioner (Patna High Court)
SEO Title: HC Sets Aside GST Registration Cancellation for Defective Notice Under Section 169
The Patna High Court heard a writ petition challenging the order dated 13.10.2023 cancelling the petitioner’s GST registration under Section 29 of the Bihar Goods and Services Tax Act, 2017. The petitioner sought quashing of the cancellation order, restoration of GST registration, and consequential reliefs. The petitioner stated that he had obtained GST registration on 20.05.2020 and was subsequently issued a show cause notice alleging non-filing of returns for six consecutive tax periods. According to the petitioner, although the notice was uploaded on the GST portal, it was not served through any other mode prescribed under Section 169 of the CGST/BGST Act. The petitioner submitted that the default occurred due to dependence on counsel, oversight in checking the portal, financial difficulties, and ill health. It was also contended that the cancellation order neither recorded adequate reasons nor complied with Rule 22(3) of the Central Goods and Services Tax Rules, 2017, and was passed without following the principles of natural justice.
The respondents defended the action by relying upon Section 169(1) of the CGST Act, submitting that service of notice through the common GST portal is one of the statutorily recognised modes of communication. According to the respondents, the notice had been made available on the GST portal, but the petitioner failed to respond within the prescribed period.
The Court noted that the petitioner had relied upon earlier decisions of the High Court holding that mere uploading of a notice on the GST portal does not amount to complete compliance with Section 169, particularly where an adverse order having civil consequences is contemplated. The Court observed that despite these judgments being placed on record, the respondents had not addressed them and had merely reiterated the same stand that had already been rejected in earlier decisions. The Court further observed that nothing had been placed before it to show that those earlier judgments had been challenged before the Supreme Court or that any reason existed to depart from the consistent view already taken.
The Court held that it was an admitted position that the petitioner had not been served with the notice either through e-mail or registered post so as to draw his personal attention to the proceedings initiated against him. Referring to its earlier judgments, the Court observed that where an adverse order is likely to result in civil consequences affecting the registered person’s business and livelihood, fairness requires that, in addition to making the notice available on the GST portal, the department should also serve the notice through personal service by any of the other modes prescribed under Section 169 of the CGST/BGST Act, 2017.
Accordingly, the High Court set aside the impugned cancellation order dated 13.10.2023. It directed the respondents to issue a fresh show cause notice in accordance with law, grant the petitioner sufficient time to submit a reply, and, if an adverse order is contemplated, provide a personal hearing under Section 75(4) of the CGST/BGST Act, 2017. The competent authority was further directed to pass a reasoned order in accordance with law after granting the hearing. The entire exercise was directed to be completed within three months from the date of receipt or production of the Court’s order. The Court also directed that status quo as it existed prior to the impugned cancellation order shall be maintained in the meantime. The writ application was allowed to the extent indicated.
Cases Discussed
- Shree Ram Sales Vs. The State of Bihar (Patna High Court), CWJC No. 2768 of 2025
- M/s Medicana Vs. Union of India and Others (Patna High Court), CWJC No. 203 of 2025
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
Heard learned counsel for the petitioner and learned Senior Standing Counsel for the CGST & CX.
2. This writ application has been preferred seeking the following reliefs:-
“i) the order dated 13.10.2023 (as contained in Annexure — P3) passed by the respondent no. 2 cancelling registration under Section 29 of the Bihar Goods and Services Tax Act, 2017 (hereinafter called the Act) without service of notice in other modes prescribed in section 169 of the Act; without giving reasons therefor in contravention of the statutory contained in section 29 of the Act read with the relevant Rule 22(3) of the Central Goods and Services Tax Rules, 2017 (hereinafter called the Rules) and also without passing a speaking order in teeth of the principles of natural justice and also Articles 19 (1) (g) and 21 of the Constitution of India effecting the right to do business and deprivation of right to live be set aside quashed.
ii) the respondent no. 2 be directed to restore registration under Section 22 of the Act to enable filing of return and payment of tax in accordance therewith.
iii) for granting any other relief(s) to which the petitioner is otherwise found entitled to.”
3. It is the case of the petitioner that the petitioner is a registered person under the Central Goods and Services Tax/Bihar Goods and Services Tax Act, 2017 (hereinafter referred to as the `CGST/BGST Act’). He has been allotted a registration number vide registration certificate dated 20.05.2020 as contained in Annexure- `P-1′.
4. It is stated that the petitioner was served with a show cause notice by respondent no.2 calling upon him to show cause as to why the registration of the petitioner be not cancelled. The notice attributed non-filing of return for the six consecutive tax periods. Copy of the show cause notice has been brought on record as Annexure- `1)-2′.
5. It is stated that in compliance of the notice, the petitioner submitted before the authority that default in such compliance occurred due to the fact of his dependence on his counsel and also due to his own oversight of not viewing the portal. The grievance of the petitioner is that the petitioner did not receive any notice by any other mode other than the web portal of the department. Since the petitioner did not comply to the notice, the respondent no.2 has cancelled the registration of the petitioner. Copy of the order impugned in this writ application is dated 13.10.2023 and enclosed as Annexure- to the writ application.
6. Learned counsel submits that on perusal of the show cause notice, it would appear that the notice for cancellation of registration was not issued in accordance with law. The order of cancellation does not mention the reasons for cancellation. It is submitted that the petitioner could not file his return due to precarious financial conditions and was constrained due to ill health and his dependence on his counsel.
7. Reliance has been placed on the judgment of the learned co-ordinate Bench of this Court in the case of Shree Ram Sales Vs. The State of Bihar in CWJC No. 2768 of 2025 wherein it has been held that mere uploading of the notice on the GST portal would not be a complete compliance with the requirement of Section 169 of the CGST/BGST Act. It is submitted that this Court has taken a progressive view of the matter to ensure that the taxpayer who may be liable to face an adverse order gets notice of the matter and he should be in a position to appear before the competent authority with his response. Copy of the judgment in case of M/s Medicana Vs. Union of India and Others passed in CWJC No. 203 of 2025 (Annexure- P-6) has also been placed before this Court.
8. A counter affidavit has been filed on behalf of the respondents. It is the stand of the respondents that the petitioner had been served in accordance with law. Respondents have relied upon Section 169 of the CGST Act, 2017. It is submitted that as per sub-section (1) of Section 169, any decision, order, summons, notice or other communication under this Act or the rules will be made by way of any of the methods provided under clause (a) to clause (f) under sub-section (1) of Section 169. In this connection, it is further pointed out that one of the modes provided under sub-section (1) is in clause (d), i.e., by making it available on the common portal. It is the stand of the respondents that the notice was placed on the GST portal but the petitioner did not submit any response within the given period.
9. With the writ application, the petitioner has enclosed two judgments of this Court as Annexure- P-5′ and Annexure- P-6′ by which this Court has taken a consistent view that notice should have been communicated through registered post under acknowledgment and having regard to the fact that any adverse order would have civil consequence upon the petitioner. Despite the presence of two judgments on record with the writ application, the respondents have not made any statement with regard to the decisions of this Court.
10. In the considered opinion of this Court, the respondents are not showing a bonafide approach by merely reiterating the same and one stand which has already been rejected by the learned co-ordinate Bench of this Court and the same has been followed by this Bench as well. The conduct of the respondents are bordering on the face of the contempt. They cannot reiterate the same response half-heartedly by taking the same and one stand which has already been dealt with by this Court in several judgments. Nothing has been placed before this Court to show that the department has taken the judgment of this Court to the Hon’ble Supreme Court. Nothing has been shown to this Court to take a view other than what has already been taken by this Court.
11. This being an admitted position that notice has not been served upon the petitioner either by way of e-mail or registered post drawing his personal attention towards the action initiated by the department, in the considered opinion of this Court, the action of the respondents would fall within the teeth of the judgments as contained in Annexure- `P-5′ and Annexure-P-6′ respectively. This Court has noticed that the judgment of this Court has given a purposive interpretation in order to ensure that a registered person who is likely to face a civil consequence because of an adverse order against him in the matter of his business which may in turn affect his livelihood, it would be a fair play in action if in addition to giving the notice on the GST portal, the registered person is also served through personal service of notice by way of any one of the other modes prescribed under Section 169 of the CGST/BGST Act, 2017.
12. In result, the impugned order (Annexure- `1)-3′) is hereby set aside. The petitioner shall be served with a fresh show cause notice in accordance with law giving him sufficient time to file a response whereafter if the competent authority contemplates passing of an adverse order, he shall give a personal hearing to the petitioner in terms of sub-section (4) of Section 75 of the CGST/BGST Act, 2017. After giving personal hearing, the competent authority shall pass a reasoned order in accordance with law. All the exercises be completed within a period of three months from the date of receipt/production of a copy of this order.
13. In the meantime, the status quo before the date of the passing of the impugned order shall be maintained.
14. This writ application is allowed to the extent indicated hereinabove.
