Case Law Details
Chand Traders Vs State of U.P. and Another (Allahabad High Court)
The Allahabad High Court examined whether an adjudication order dated 28 August 2020, arising from a show cause notice dated 26 January 2020, suffered from illegality due to denial of opportunity of hearing. The petitioner’s GST registration had been cancelled on 13 November 2019. Subsequently, the show cause notice was issued only through electronic mode on the Common Portal.
The Court noted that, as per the respondents’ own position and earlier precedent, once registration is cancelled, the taxpayer may not be expected to access the portal, and therefore, notices must be served physically under Section 169(1) of the U.P.G.S.T. Act, 2017. Since no physical notice was issued or served, the Court held that principles of natural justice were violated, preventing the petitioner from filing objections or replying to the notice.
Recognising that the right to be heard is protected under Section 75(4), the Court set aside the impugned adjudication order and remitted the matter for fresh consideration. Directions were issued to serve a fresh notice along with relied upon documents within ten days. The petitioner was granted two weeks to file a reply, followed by a hearing with at least 15 days’ notice. The proceedings are to be concluded within two months thereafter.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Having heard learned counsel for the petitioner and learned Standing Counsel for the State respondents, briefly it has to be considered if the adjudication order dated 28.08.2020 arising from show cause notice dated 26.01.2020 suffers from patent illegality resulting in complete denial of opportunity to object or being heard in the adjudication proceedings. Undeniably, the petitioner’s registration stood cancelled by order dated 13.11.2019. Thereafter the show cause notice was first issued to the petitioner through electronic mode, by uploading it on the Common Portal.
2. It is the own case of the respondents, as noted in M/S Bambino Agro Industries Ltd. Vs. State of Uttar Pradesh & Anr.; 2025:AHC:229995-DB, that in cases where registration may have been cancelled, such persons may be proceeded in adjudication proceedings only against service of physical notice. The circular providing for such measure follows the dictate of common sense. Once the registration is cancelled and the registered persons thus disabled from working on the Common Portal and in any case, are relieved of obligation to check the Common Portal thereafter, it is wholly natural and practical that any adjudication notice issued after cancellation of registration may be served through physically in terms of the provisions of Section 169(1)(a)(b) of the U.P.G.S.T. Act, 2017.
3. To the extent, no such physical notice has been issued or served on the petitioner, rules of natural justice are seen to have been substantially violated as may have prevented the petitioner from filing any objection/reply to such show cause notice.
4. In view of that breach of essential principles of natural justice noted, no useful purpose may be served in keeping the present writ petition pending or calling for counter affidavit at this stage. Primarily, the petitioner’s right to be heard is statutorily protected under Section 75 (4) of the said Act.
5. Accordingly, the impugned adjudication order dated 28.08.2020 is set aside and the matter is remitted to the respondent no. 2 to pass a fresh order strictly in accordance with law.
6. For that purpose, we further provide the said respondent may issue a fresh notice to the petitioner through physical mode, along with copies of Relied Upon Documents (‘RUDs’ in short) within a period of ten days from today.
7. Subject to such compliance, the petitioner shall have two weeks therefrom to file his written reply through physical mode and thereafter the respondent no. 2 may fix appropriate date for hearing in the proceedings with at least 15 days advance notice. Subject to that compliance, the petitioner undertakes to cooperate in the proceedings and not seek any adjournment. Thereafter the proceedings may be concluded not later than two months from the date of filing of reply by the petitioner.
8. The present petition is disposed of.
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