Sapna Gupta vs. State Of U.P. And Another

Facts

The petitioner is challenging an order dated 17.08.2024 passed by the Assistant Commissioner, Sector-1, State Tax, Kanpur, under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner's GST registration was cancelled on 16.04.2022, after which no business was conducted. A show cause notice was uploaded on the GST portal, and the petitioner filed a reply, leading to the impugned order. The petitioner only became aware of this order on 11.07.2025, when their banker informed them about a notice in Form GST DRC-13 dated 21.06.2025, issued to the banker. The petitioner contends that once registration is cancelled, they are not obligated to check the GST portal, and service of any order must be through alternative means.

Held

The Court held that there was a violation of the principle of natural justice. The Court agreed with the principle enunciated by the 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 communications. Proper service of any order or notice must be effected through alternative means. Since the petitioner's registration was cancelled prior to the issuance of the show cause notice and the impugned order, and they only came to know about the order much later through their banker, the service was deemed inadequate. Consequently, the impugned order dated 17.08.2024 passed by the Assistant 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.

Key Issues

1. Whether the service of the show cause notice and the impugned order under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017, was proper and in accordance with the principles of natural justice, considering the cancellation of the petitioner's GST registration prior to the issuance of the notice and order? Petitioner's argument: The petitioner argued that after the cancellation of their GST registration on 16.04.2022, they were not obligated to monitor the GST portal for any notices or orders. They contended that the mode of service of any order must be through alternative means, and the impugned order was not properly served, leading to a violation of natural justice. The petitioner relied on a coordinate bench's order 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 or state.