Ved Enterprises Vs State of U.P. (Allahabad High Court)
Summary: Allahabad High Court quashed the order dated 12.04.2022 passed by the Deputy Commissioner, State Tax, Sector-1, Unnao under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017, holding that there had been a violation of the principles of natural justice. The petitioner’s GST registration had been cancelled on 16.11.2021 and, subsequent to such cancellation, no business was carried out. Thereafter, a show cause notice was uploaded on the GST portal and the impugned order was passed under Section 74.
The High Court observed that once the registration had been cancelled, the petitioner was not obligated to check the GST portal and the mode of service of any show cause notice had to be by way of alternative means. The petitioner relied upon the coordinate Bench decision in M/s Katyal Industries v. State of U.P. and others, Neutral Citation No. 2024:AHC:23697-DB, and the Court stated that it was essentially in agreement with the principle enunciated therein.
Consequently, the impugned order dated 12.04.2022 was quashed and set aside, while liberty was granted to the Department to issue a proper notice to the petitioner and act in accordance with law. The Court further clarified that any amount already recovered from the petitioner pursuant to the earlier assessment would be subject to the final outcome in terms of the directions contained in the order. The writ petition was accordingly disposed of.
Cases Discussed:
- M/s Katyal Industries v. State of U.P. and others, Neutral Citation No. 2024:AHC:23697-DB
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Mukesh Kumar Tewari, learned counsel appearing on behalf of the petitioner and learned Counsel appearing on behalf of the State.
2. This is a writ petition under Article 226 of the Constitution of India wherein the petitioner is aggrieved by the order dated 12.04.2022 passed by the respondent No.2/ Deputy Commissioner State Tax, Sector-1, Unnao Section 74 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 16.11.2021. 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 74 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. Ld. 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 12.04.2022 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. It is made clear that any amount recovered from the petitioner in pursuance of the assessment previously made shall be subject to the final outcome as per directions of this Court in the present order.
8. With the above direction, the writ petition is disposed of.
