M/S Sadhan Sahakari Samiti Limited Mahuawa vs. State Of Uttar Pradesh And 2 Others

Facts

The petitioner, M/s Sadhan Sahakari Samiti Limited Mahuawa, filed a writ petition challenging an order dated 29.08.2024, passed by the Commercial Tax Officer, State Tax, Sector-2, Maharajganj under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner's GST registration was cancelled on 28.08.2019, and no business was conducted thereafter. A show cause notice was uploaded on the GST portal, followed by the impugned order. The petitioner contended that once registration is cancelled, they are not obligated to check the GST portal, and any notice must be served through alternative means.

Held

The Allahabad High Court held that the service of a show cause notice uploaded on the GST portal is not sufficient when the petitioner's GST registration has been cancelled and no business is being conducted. The Court found that once registration is cancelled, the petitioner is not obligated to check the GST portal, and the mode of service of any show cause notice must be through alternative means to the petitioner. This constitutes a violation of the principle of natural justice. Consequently, the impugned order dated 29.08.2024, passed by the Commercial Tax Officer, was quashed and set aside. The Court directed the department to issue a proper notice to the petitioner and proceed in accordance with law. The ratio decidendi is that a taxpayer whose GST registration has been cancelled and is not carrying on business must be served with notices through conventional or alternative means, not solely via the GST portal, to uphold natural justice.

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? (Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017). Petitioner's Arguments: The petitioner argued that after the cancellation of their GST registration, they were not obligated to monitor the GST portal. They contended that any show cause notice or communication from the revenue authority must be served through alternative means to ensure proper intimation. The petitioner 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 Arguments: The judgment does not record any specific arguments made by the revenue.