Taxpayer Not obliged to Check GST Portal for Notices After Registration Cancellation

Katyal Industries Vs State of Up And 2 Others (Allahabad High Court)

In Katyal Industries Vs State of UP, the Allahabad High Court examined the cancellation of the petitioner’s registration under the Uttar Pradesh GST Act, 2017, on May 21, 2019. The petitioner’s registration remained cancelled, and no revival was sought by the petitioner. The core issue arose from the non-receipt of show cause notices related to the period of April 2018 to March 2019, which were purportedly sent electronically. The petitioner contended that due to the cancellation of registration, they were not obliged to access the GST portal to check for such notices. Furthermore, the respondents did not claim to have issued any physical notice to the petitioner before the order dated June 20, 2023, was passed, confirming the demand.

The Court highlighted a violation of natural justice, noting that the petitioner was not afforded a proper opportunity to respond before the adjudication order was issued. Based on these facts, the Court set aside the order dated June 20, 2023, and directed that the petitioner be treated as if the order itself were a show cause notice. The petitioner was granted four weeks to submit a final reply, and upon compliance, the authorities were directed to pass a fresh order with an opportunity for a personal hearing. The Court emphasized expeditious handling of the case, directing the new order to be issued within three months. This judgment underscores the importance of following the principles of natural justice in GST proceedings.

FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT

1. Having heard learned counsel for the petitioner and Sri Ankur Agarwal learned Standing Counsel for the respondents, it remains undisputed that the petitioner’s registration under the UPGST Act, 2017 was cancelled on 21.5.2019. It is not the case of the revenue that the said registration has ever been revived or that the petitioner ever sought revival of that registration.

2. In view of the above, it does merit acceptance that the petitioner was not obligated to visit the GST portal to receive the show cause notices that may have been issued to the petitioner for the period of April, 2018 to March, 2019 through e-mode, preceding the adjudication order dated 20.6.2023 passed in pursuance thereto.

3. It is also not the case of the revenue that any physical/offline notice was issued to or served on the petitioner before the impugned order came to be passed.

4. In view of peculiar facts noted above, no useful purpose may be served in keeping the petition pending or calling counter affidavit at this stage or to relegate the present petitioner to the forum of alternative remedy.

5. Since essential requirement of rules of natural justice has remained to be fulfilled, we set aside the order dated 20.6.2023. The petitioner may treat the said order itself to be the notice and submit its final reply thereto within a period of four weeks from today. Subject to such compliance by the petitioner, fresh order may be passed after affording opportunity of personal hearing, as expeditiously as possible, preferably within a period of three months therefrom. Disposed of.