Case Law Details
Shree Ganesh Infra Vs State of U.P. (Allahabad High Court)
Material Facts: The petition challenged an order passed under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner’s GST registration had been cancelled on 7 November 2020, after which no business was carried on. A show cause notice was uploaded on the GST portal and, thereafter, the impugned order dated 7 August 2024 was passed. Following cancellation of registration, the petitioner contended that there was no obligation to monitor the GST portal and that notice ought to have been served through an alternative mode.
Procedural History: The petitioner filed a writ petition under Article 226 of the Constitution challenging the order passed by the Deputy Commissioner under Section 73 of the Act.
Legal Issues: Whether a demand order under Section 73 could be sustained when the show cause notice was served only through the GST portal after cancellation of the petitioner’s GST registration.
Relevant Statutory Provisions
- Article 226 of the Constitution of India.
- Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017.
Court’s Findings and Reasoning
The Court observed that once GST registration had been cancelled, the petitioner was not obliged to check the GST portal. It held that service of any show cause notice thereafter had to be effected through an alternative mode. The Court relied upon the decision of the Coordinate Bench in M/s Katyal Industries v. State of U.P. and others and agreed with the principle laid down therein. It found that the impugned proceedings violated the principles of natural justice.
Final Ruling
The Allahabad High Court quashed and set aside the order dated 7 August 2024. It granted liberty to the Department to issue a proper notice to the petitioner and proceed in accordance with law. The writ petition was disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Nishendra Kumar Pandey, learned counsel appearing on behalf of the petitioner and Sri Sanjay Sarin, learned Additional Chief Standing 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 passed by the respondent No.2, Deputy Commissioner, Sector-02, State Tax Office, 317, Hiran Nagar, Unnao, 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 November 7, 2020. 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 August 7, 2024 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.
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