M/S Sahu Trading vs. State Of Uttar Pradesh And 2 Others

Facts

The petitioner, M/S Sahu Trading, filed a writ petition challenging an order dated 21.02.2025 passed by the Deputy Commissioner, State Tax, Sector-1, Maharajganj, under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner's GST registration was cancelled on 17.01.2023, and no business was conducted thereafter. A show cause notice was allegedly uploaded on the GST portal, leading to the impugned order. The petitioner contended that after registration cancellation, they were not obligated to check the portal, and service of any notice should have been through alternative means. The procedural history involves the issuance of the impugned order after the cancellation of registration and the subsequent filing of this writ petition.

Held

The Court held that there was a violation of the principle of natural justice. The Court agreed with the principle laid down 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 expected to regularly check the GST portal. Therefore, service of a show cause notice solely through the portal, without any alternative means of communication to the petitioner, is insufficient and violates the fundamental principles of natural justice. The impugned order dated 21.02.2025 passed by the Deputy Commissioner, State Tax, 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. No other issues were expressly left undecided.

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? 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. They relied on the principle enunciated in the case of 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 respondent revenue.