Ms Nikko Auto Limited vs. Commissioner State Goods And Services Tax

Facts

The petitioner, M/s Nikko Auto Limited, is challenging two orders-in-original dated 06.04.2024 and 18.02.2025, passed by respondent no. 2 under Section 73 of the UKGST Act, 2017, for Financial Years 2018-19 and 2020-21 respectively. The petitioner ceased business in Uttarakhand in 2021, and its GST registration was cancelled effective 25.08.2021, with cancellation finalized on 10.09.2021. Subsequently, the respondents uploaded show cause notices on the GST portal on 20.12.2023 and 08.11.2024, which the petitioner claims it did not receive due to the cancellation of its registration and the absence of any other communication method. The petitioner argues these orders are ex parte and should be quashed.

Held

The Court held that the impugned orders dated 06.04.2024 and 18.02.2025 were liable to be quashed. The reasoning was based on the concession made by the learned Standing Counsel for the Revenue, acknowledging that the present case was squarely covered by the Court's prior judgment in "M/s Jaipal Singh v. Commissioner, State Goods and Services Tax Commissionerate, Dehradun, Uttarakhand and another". In that precedent, identical facts involving the issuance of show cause notices and subsequent orders after the cancellation of GST registration, without proper service, led to the quashing of the orders. The Court's ratio decidendi is that proceedings initiated without proper notice, especially when the assessee's registration is cancelled and no alternative service is effected, are unsustainable. Consequently, the Court quashed the impugned orders and granted the petitioner four weeks to file its reply to the show cause notices. The Revenue was granted liberty to pass a fresh order in accordance with law, ensuring the petitioner an opportunity for personal hearing if desired, as per Section 75(4) of the UKGST Act, 2017.

Key Issues

1. Whether the impugned orders-in-original, passed under Section 73 of the UKGST Act, 2017, are liable to be quashed as being ex parte and passed without proper notice to the petitioner, given that its GST registration stood cancelled prior to the issuance of the show cause notices and no alternative mode of service was employed. The petitioner contended that since its GST registration was cancelled, it had no reason to check the GST portal and therefore could not have been aware of the proceedings initiated against it. It argued that the show cause notices were not served through any other mode, making the subsequent orders ex parte and invalid. The petitioner relied on a previous judgment of the Uttarakhand High Court in "M/s Jaipal Singh v. Commissioner, State Goods and Services Tax Commissionerate, Dehradun, Uttarakhand and another" (WPMB No. 1065/2025), which dealt with identical facts, and further cited judgments from the Allahabad High Court in "M/s AHS Steels v. Commissioner of State Taxes" and "M/s Katyal Industries v. State of U.P. and others". The respondents, through the learned Standing Counsel, fairly conceded that the present case was covered by the aforementioned judgment in "M/s Jaipal Singh".