A S Traders vs. The State Of Uttarakhand

Held

The Court held that the service of notices exclusively through the GST portal, when the petitioner's registration was cancelled, did not constitute valid service under Section 169 of the CGST Act. The Court reasoned that the department has a duty to ensure effective service, and imposing a duty to monitor the portal on a non-registered person is not contemplated by law. The Court also found that the impugned order violated Section 75(4) of the UKGST Act, 2017, by failing to provide an opportunity of personal hearing, which is a mandatory requirement under the principle of natural justice. The Court quashed the ex-parte assessment order and the consequent recovery citation. The petitioner was directed to reply to the show-cause notice within two weeks, after which the department could pass a fresh order, ensuring an opportunity of personal hearing as per Section 75(4). The Court relied on the Allahabad High Court's judgment in M/s Ahs Steels and its own prior order in M/s Jaipal Singh vs. Commissioner, State Goods and Services Tax Commissionerate.

Facts

The petitioner, A.S. Traders, a sole proprietorship engaged in iron scrap business, had its GST registration cancelled effective March 31, 2023, after its business was adversely affected by the Covid-19 pandemic. Subsequently, the respondent-department issued a show-cause notice dated January 11, 2024, alleging failure to pay tax for the financial year 2021-2022. The petitioner claims not to have received this notice or been aware of subsequent proceedings, including an ex-parte assessment order dated February 23, 2024, and a consequent recovery certificate dated February 23, 2024, due to the cancellation of its GST registration. The petitioner sought to quash these notices and orders and requested a remand for de novo assessment proceedings with an opportunity of hearing.

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 Act? 2. Whether the impugned assessment order suffers from a violation of the statutory mandate under Section 75(4) of the UKGST Act, 2017, requiring an opportunity of personal hearing? The petitioner argued that since their GST registration was cancelled, they were not obligated to monitor the GST portal, and therefore, portal-based service alone was not valid. They contended that the department failed to ensure effective service as per Section 169 of the CGST Act and that the principle of audi alteram partem under Section 75(4) was violated by not providing a personal hearing. The petitioner relied on judgments of the Allahabad High Court in M/s Ahs Steels vs. Commissioner of State Taxes and M/s Katyal Industries vs. State of U.P. and others, which discussed these issues. The respondents did not record any specific arguments.