M/S Alarbab Scrap Traders vs. State Of U.P. And Another

Facts

The petitioner, M/s Alarbab Scrap Traders, filed a writ petition challenging an order dated March 23, 2024, passed by the Assistant Commissioner, State Taxes, Sambhal, under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner's GST registration was cancelled on December 5, 2018, after which no business was conducted. 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 any notice should have been served through alternative means. The court noted that the petitioner's counsel relied on a previous order by a coordinate bench of the High Court.

Held

The 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 this mode of service violates the principles of natural justice, as the petitioner is not obligated to check the portal after registration cancellation and requires notice through alternative means. The Court agreed with the principle enunciated in the coordinate bench's order in M/s Katyal Industries v. State of U.P. and others. Consequently, the impugned order dated March 23, 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 the law. The ratio decidendi is that a taxpayer whose registration is cancelled must be served with notices through effective alternative means, not just by uploading on the GST portal, to ensure compliance with natural justice.

Key Issues

1. Whether the service of a show cause notice uploaded on the GST portal is sufficient notice to a petitioner whose GST registration has been cancelled, thereby satisfying the principles of natural justice, particularly under Section 73 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 for notices. They contended that the mode of service of any show cause notice should have been through alternative means to ensure actual receipt and compliance, thereby upholding the principles of natural justice. The petitioner relied on the decision in M/s Katyal Industries v. State of U.P. and others, Neutral Citation No.2024:AHC:23697-DB, to support their contention. Revenue's Arguments: The judgment does not record any specific arguments made by the respondents (State of U.P. and Another).