M/S Vijay Sharma Contractor vs. State Of Uttar Pradesh And 2 Others

Facts

The petitioner, M/s Vijay Sharma Contractor, filed a writ petition challenging an order dated 30.12.2023 passed by the Commercial Tax Officer, State Tax, Sector-2, Hasanpur, Moradabad, under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner's GST registration had been cancelled, and they claim no business was conducted thereafter. 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.

Held

The Court held that there was a violation of the principle of natural justice. The Court agreed with the principle enunciated by a coordinate Bench in M/s Katyal Industries v. State of U.P. and others. The reasoning was that once a petitioner's GST registration is cancelled, they are not obligated to check the GST portal. Therefore, service of a show cause notice solely through the GST portal, without resorting to alternative means of communication, is not a valid mode of service. This failure to provide proper notice before passing an order under Section 73 of the Act vitiates the proceedings. The ratio decidendi is that statutory authorities must ensure proper service of notices, especially when a taxpayer's registration has been cancelled, to uphold the principles of natural justice. The impugned order dated 30.12.2023 passed by the respondent No.3 was quashed and set aside. The department was granted liberty to issue a proper notice to the petitioner and proceed in accordance with law.

Key Issues

1. Whether the service of a show cause notice uploaded on the GST portal is a valid mode of service when the petitioner's GST registration has been cancelled, and if not, whether this violates the principles of natural justice, turning on 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 any notices. They contended that the mode of service for any show cause notice must be through alternative means directly communicated to the petitioner to ensure compliance with the principles of natural justice. The petitioner relied on the coordinate Bench's decision in M/s Katyal Industries v. State of U.P. and others. Revenue's Arguments: The judgment does not record any specific arguments made by the respondent State.