M/S Kanha Food Products vs. State Of U.P. And Another

Facts

The petitioner, M/s Kanha Food Products, had its GST registration under the UPGST Act, 2017 cancelled on May 20, 2023, effective from April 10, 2023. The revenue has not contended that this registration was ever revived or that the petitioner sought its revival. The petitioner was not obligated to check the GST portal for show cause notices issued for the period 2017-18 via e-mode, preceding the adjudication order dated December 23, 2023. The revenue has also not claimed that any physical or offline notice was issued or served on the petitioner before the impugned order was passed. Given these circumstances, the Court found no purpose in keeping the petition pending or relegating the petitioner to an alternative remedy.

Held

The Court held that the adjudication order dated December 23, 2023, was unsustainable due to a violation of the principles of natural justice. The Court reasoned that the petitioner's GST registration had been cancelled prior to the issuance of the show cause notices for the period 2017-18. Consequently, the petitioner was not obliged to check the GST portal for e-mode notices. Crucially, the revenue did not contend that any physical or offline notice was served on the petitioner before the impugned order was passed. Therefore, the essential requirement of affording the petitioner an opportunity of being heard was not fulfilled. The ratio decidendi is that an adjudication order passed without proper notice, especially when the assessee's registration is cancelled and no physical notice is served, is a nullity. The Court set aside the order dated December 23, 2023, and directed the petitioner to submit a reply to the show cause notice within four weeks. Upon compliance, a fresh order is to be passed after affording a personal hearing, expeditiously and preferably within three months.

Key Issues

1. Whether the adjudication order dated December 23, 2023, passed by the respondent authority is vitiated due to non-compliance with the principles of natural justice, specifically concerning the issuance and service of show cause notices, in light of the petitioner's cancelled GST registration. This issue turns on the interpretation and application of principles of natural justice and relevant procedural rules under the UPGST Act, 2017. Petitioner's Contention: The petitioner argued that since their GST registration was cancelled effective April 10, 2023, they were not obligated to monitor the GST portal for e-mode notices. Furthermore, no physical or offline notice was served before the adjudication order was passed on December 23, 2023, thus violating principles of natural justice. Respondent's Contention: The respondent (State of U.P. and another) did not dispute the cancellation of registration or the absence of physical notice. Their argument, if any, regarding the petitioner's obligation to check the portal or the validity of the e-mode notice was not explicitly recorded in the judgment.