M/S Inder Bhan Singh Thru. Proprietor Indra Bhan Singh vs. State Of U.P. Thru. Prin. Secy. Institutional Finance Lko. And Another

Held

The Court held that there was a violation of the principle of natural justice. The Court agreed with the principle enunciated by a coordinate Bench in M/s Katyal Industries v. State of U.P. and others. The reasoning was that once a taxpayer's registration is cancelled, they are not obligated to continuously check the GST portal for notices. The proper mode of service for any show cause notice must be through alternative means to the petitioner. Consequently, the impugned order dated 18.04.2024, passed by the Deputy Commissioner, was quashed and set aside. The Department was granted liberty to issue a proper notice to the petitioner and proceed in accordance with the law. The ratio decidendi is that notice must be served in a manner that ensures actual communication to the assessee, especially when their active participation in the GST system has ceased due to registration cancellation.

Facts

The petitioner, M/s Inder Bhan Singh Thru. Proprietor Indra Bhan Singh, filed a writ petition challenging an order dated 18.04.2024 passed by the Deputy Commissioner, Ayodhya Sector-5, Ayodhya-B, Ayodhya, Uttar Pradesh Sitapur, under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner's GST registration was cancelled on 17.12.2020, and thereafter, no business was conducted. A show cause notice was purportedly uploaded on the GST portal, leading to the impugned order. The petitioner contended that after registration cancellation, they were not obligated to check the GST portal, and any notice should have been served through alternative means.

Key Issues

1. Whether the service of a show cause notice uploaded on the GST portal is sufficient when the petitioner's GST registration has been cancelled and no business is being conducted, thereby violating the principles of natural justice, in light of Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017? Petitioner's Argument: The petitioner argued that once their GST registration was cancelled, they were no longer obligated to monitor the GST portal for notices. They contended that the mode of service for any show cause notice must be through alternative means directly to the petitioner, as uploading on the portal is insufficient and violates the principles of natural justice. The petitioner relied on the coordinate Bench's decision in M/s Katyal Industries v. State of U.P. and others, Neutral Citation No.2024:AHC:23697-DB. Revenue's Argument: The judgment does not record any specific arguments made by the revenue.