M/S Loyal Security Services vs. State Of U.P. And Another

Facts

The petitioner, M/s Loyal Security Services, challenges an adjudication order dated 24.04.2024. The petitioner's GST registration under the UPGST Act, 2017, was cancelled on 03.02.2022, effective from 23.08.2021. The revenue has not contended that the registration was ever revived or that the petitioner sought its revival. The impugned adjudication order pertains to the period April 2018 - March 2019. The revenue has not claimed that any physical or offline notice was issued or served on the petitioner prior to the passing of the adjudication order. The petitioner was not obligated to visit the GST portal for e-mode notices preceding the adjudication order, given the cancellation of registration.

Held

The Court held that the principles of natural justice were not fulfilled. Given that the petitioner's GST registration was cancelled effective 23.08.2021, they were not obligated to visit the GST portal to receive show cause notices issued through e-mode for the period April 2018 - March 2019. Crucially, the revenue did not contend that any physical or offline notice was issued or served on the petitioner before the adjudication order was passed. Consequently, the Court found no useful purpose in keeping the petition pending or relegating the petitioner to an alternative remedy. The adjudication order dated 24.04.2024 was set aside. The petitioner was granted four weeks from the date of the order to submit a reply to the show cause notice. Following this, a fresh order is to be passed after affording an opportunity of personal hearing, expeditiously, preferably within three months.

Key Issues

1. Whether the adjudication order dated 24.04.2024, passed for the period April 2018 - March 2019, is vitiated due to non-compliance with the principles of natural justice, specifically the issuance of proper show cause notices, in light of the petitioner's GST registration being cancelled effective 23.08.2021? Petitioner's Contention: The petitioner argued that since their GST registration was cancelled, they were not obligated to check the GST portal for e-mode notices. Furthermore, the revenue did not issue any physical or offline notice to the petitioner before passing the impugned order. Therefore, the principles of natural justice were violated. Revenue's Contention: The revenue did not present any arguments regarding the issuance of notices or compliance with natural justice. The judgment notes that it is not the case of the revenue that the petitioner's registration was revived or that the petitioner sought revival.