Xithelia Nova Healthcare Private Limited vs. State Of Uttarakhand

Held

The Court held that the law laid down in the cited judgments would squarely apply to the facts of the present case. Specifically, it was held that the service of the Show Cause Notice solely through the GST portal, when the petitioner's registration stood cancelled prior to its issuance, did not constitute valid service under Section 169 of the CGST/UKGST Act. The Court found that the petitioner was not obliged to monitor the GST portal after cancellation of their registration, and therefore, the department failed to effect effective service. Consequently, the adjudication order passed under Section 73 of the CGST/UKGST Act for the financial year 2017-2018, demanding tax and penalty, was quashed. The Revenue was granted liberty to proceed from the stage of the Show Cause Notice. The Court also noted that if the petitioner seeks a personal hearing, it shall be provided in terms of Section 75(4) of the GST Act. No issue was expressly left undecided.

Facts

The petitioner, Xithelia Nova Healthcare Private Ltd., filed a writ petition challenging an adjudication order passed by Respondent No. 3 for the financial year 2017-18, which raised a demand of Rs. 4,14,185/-. The petitioner's GST registration was cancelled on 03.04.2021, effective from 24.03.2021. Subsequently, Respondent No. 3 issued a Show Cause Notice dated 17.02.2023, which was allegedly served only by uploading it on the GST portal. The petitioner argued that after registration cancellation, they were not obligated to monitor the portal and thus did not receive the notice or the adjudication order. The Revenue did not dispute the mode of service.

Key Issues

1. Whether the service of notices exclusively through the GST portal, in circumstances where the petitioner's registration stood cancelled, constitutes valid service under Section 169 of the CGST/UKGST Act? 2. Whether the impugned adjudication order suffers from a violation of Section 75(4) of the CGST/UKGST Act, mandating an opportunity of personal hearing? Petitioner's Arguments: The petitioner contended that service of the Show Cause Notice solely through the GST portal was invalid because their registration was cancelled, and they were not required to monitor the portal. They argued that this constituted a breach of Section 169 and the principles of natural justice. They relied on previous judgments of the Uttarakhand High Court and the Allahabad High Court (M/s Ahs Steels vs. Commissioner of State Taxes and M/s Katyal Industries vs. State of U.P. and others), which held that portal-based service alone is insufficient when registration is cancelled and that effective service is mandatory. They also cited the Supreme Court decision in Radha Krishan Industries v. State of Himachal Pradesh regarding the adherence to principles of natural justice. Revenue's Arguments: The Revenue, through its learned Standing Counsel, did not dispute the factual assertion that the Show Cause Notice was served only by uploading it on the GST portal and by no other mode.