Kanhaiya Traders Vs State of U.P. and another (Allahabad High Court)
The Allahabad High Court recently overturned the cancellation of a Goods and Services Tax (GST) registration for Kanhaiya Traders due to the absence of a physical or offline notice served to the assessee prior to the adjudication order. The court, in Kanhaiya Traders v. State of U.P., held that this lack of proper notice and a denied opportunity for a personal hearing constituted a violation of natural justice principles. The petitioner contended that they never received a physical or offline show cause notice for the financial year 2018-19, leading to an adjudication order dated June 13, 2024, without their knowledge or input. The respondent did not dispute the fact that no physical notice was served. The court emphasized that assessees are not obligated to constantly monitor the GST portal for electronic notices, especially when no physical intimation has been provided. By setting aside the cancellation order, the court underscored the fundamental importance of due process, directing the department to treat the quashed order as the show cause notice. Kanhaiya Traders was then given four weeks to submit a final reply, and the department was mandated to pass a fresh order within three months after providing a personal hearing. This ruling reinforces the necessity for tax authorities to adhere strictly to procedural requirements, ensuring that taxpayers receive adequate notice and a fair opportunity to present their case before any adverse action, such as registration cancellation, is taken.
