M/S Jaiprakash Thekedar vs. Commissioner, Commercial Taxes And Another

Held

The Court held that the show cause notice issued to the petitioner was not in the prescribed format as it conspicuously omitted the date and time for the personal hearing. The Court referred to Rule 22(1) of the U.P. Goods and Services Tax Rules, 2017, and the prescribed Form GST REG-17, both of which mandate that the noticee be informed of the date and time for personal hearing. Since this crucial information was absent, the petitioner was not afforded a proper opportunity of being heard, violating the principles of natural justice. Consequently, the proceedings held pursuant to such a defective notice were rendered illegal, void, and a nullity in the eyes of law. The impugned cancellation order was therefore quashed. The Court allowed the petition with liberty to the Revenue to proceed in accordance with law.

Facts

The petitioner, M/s Jaiprakash Thekedar, is aggrieved by the cancellation of its GST registration and subsequent coercive action. The Assistant Commissioner, Mahoba, issued a show cause notice on 31.08.2019, requiring a reply within seven working days and stating that the case would be decided ex parte if no reply or appearance was made. The petitioner claims the notice was not served by registered post and that the common portal upload was insufficient due to technical glitches. Crucially, the show cause notice, though in Form GST REG-17, did not specify a date and time for the personal hearing. The cancellation order dated 21.09.2019 was issued, determining zero tax, interest, and penalty payable, but requiring payment by 01.10.2019.

Key Issues

1. Whether the service of the show cause notice on the petitioner was sufficient in law, considering it was not sent by registered post and uploaded on the common portal, turning on Section 169 of the CGST Act and principles of natural justice. 2. Whether the show cause notice dated 31.08.2019 was in the prescribed format and complied with the principles of natural justice, specifically regarding the requirement to specify a date and time for personal hearing, as mandated by Rule 22(1) of the U.P. Goods and Services Tax Rules, 2017 and Form GST REG-17. Petitioner's arguments: The petitioner argued that service of the show cause notice was insufficient as it was not sent by registered post and portal uploads are unreliable due to technical issues. They relied on the Madras High Court judgment in Pushpam Reality and Others Vs. State Tax Officer & Others. Furthermore, the petitioner contended that the show cause notice violated principles of natural justice and statutory requirements by failing to specify a date and time for personal hearing, leaving them unaware of when to appear. Revenue's arguments: The revenue contended that service via the common portal is a recognized mode under Section 169 of the Act. However, the revenue's counsel could not dispute that the show cause notice did not mention the date and time for personal hearing.