Zahid Scrap Traders Vs State of Uttar Pradesh (Allahabad High Court)
The Allahabad High Court heard a writ petition filed by Zahid Scrap Traders challenging an order dated December 5, 2023, passed under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017, for FY 2017-18.
The petitioner’s GST registration was canceled on January 14, 2019, after which no business was conducted. The impugned order followed a Show Cause Notice (SCN) that was merely uploaded on the GST portal. The High Court found that once a petitioner’s registration is canceled, they are not obligated to check the GST portal, and the SCN must be served through alternative means. Relying on the principle established in M/s Katyal Industries v. State of U.P. and others, the court determined that the failure to serve notice properly constituted a violation of the principle of natural justice. Accordingly, the court quashed and set aside the order dated December 5, 2023. The department was granted liberty to issue a proper notice to the petitioner and act in accordance with law.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard learned counsel for the parties and perused the record.
2. This is a writ petition under Article 226 of the Constitution of India wherein the petitioner is aggrieved by the order dated 05.12.2023 (FY 2017-18) passed by the respondent No.2/Deputy Commissioner, State Taxes, Sector-1, Sambhal, under Section 73 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 14.01.2019. 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 73 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. 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 05.12.2023 (FY 2017-18) 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. With the above direction, the writ petition is disposed of.
