M/S R K Traders vs. State Of Uttar Pradesh And Another

Facts

The petitioner, M/s R K Traders, is challenging an order dated 03.05.2024 passed by the Assistant Commissioner, State Taxes, under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner's GST registration was cancelled on 21.10.2022, and thereafter, no business was conducted. A show cause notice was allegedly uploaded on the GST portal, leading to the impugned order. The petitioner contends that after registration cancellation, they are not obligated to check the GST portal, and any notice must be served through alternative means. The petitioner relies on a previous judgment from a coordinate bench of the High Court.

Held

The Court held that there was a violation of the principle of natural justice. The reasoning was that once a petitioner's GST registration is cancelled, they are not obligated to check the GST portal for notices. The Court agreed with the principle enunciated by a coordinate bench in M/s Katyal Industries v. State of U.P. and others. The Court found that the mode of service of any show cause notice must be by way of alternative means to the petitioner. Consequently, the impugned order dated 03.05.2024, passed by the Assistant Commissioner, State Taxes, was quashed and set aside. The department was granted liberty to issue a proper notice to the petitioner and proceed in accordance with law. The ratio decidendi is that proper service of notice, especially when registration is cancelled, is a prerequisite for passing a valid order under Section 74, and portal upload alone is insufficient.

Key Issues

1. Whether the service of a show cause notice uploaded on the GST portal is a valid mode of service on a petitioner whose GST registration has been cancelled, particularly when no business is being conducted, and whether this violates the principles of natural justice, as per Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017? Petitioner's Arguments: The petitioner argued that once their GST registration was cancelled, they were no longer obligated to monitor the GST portal. 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 decision in M/s Katyal Industries v. State of U.P. and others, Neutral Citation No.2024:AHC:23697-DB, for the principle that service via the portal is insufficient in such circumstances. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue or state.