Udai Associates Vs State of Up And 2 Others (Allahabad High Court)
In the case of Udai Associates vs State of Uttar Pradesh & 2 Others (Allahabad High Court), the petitioner challenged the cancellation of GST registration, arguing that the grounds for cancellation in the final order differed from those mentioned in the show-cause notice. The cancellation order was issued on the basis of the petitioner’s failure to file returns for six months. However, the final order cited Rule 21-A(2-A), which pertains to the comparison of returns, an issue that was not part of the original notice. This discrepancy led to the violation of principles of natural justice, making the cancellation order unsustainable in law.
The petitioner, Udai Associates, had cited that one of their partners had been undergoing cancer treatment, which caused a delay in filing GST returns. After the notice for cancellation was issued in April 2023, the partners were unable to check the email due to the health crisis. In response to the notice, the petitioner filed the overdue returns with late fees, taxes, and interest. Despite this, the appeal against the cancellation was dismissed on the grounds of limitation.
The court noted that the show-cause notice and the final cancellation order were based on different reasons, thus violating the right to a fair hearing. Judicial precedents in Precitech Engineers vs. State of U.P. and M/s Assaka Powerinfra Pvt. Ltd. vs. State of U.P. were cited to emphasize that failure to provide a proper opportunity for defense or hearing amounts to a violation of natural justice. The Allahabad High Court held that the order canceling the GST registration was passed without proper application of mind and without giving the petitioner an adequate opportunity to present its case.
