M/S Pragati Enterprises vs. State Of Uttar Pradesh And Another

Facts

The petitioner, M/s Pragati Enterprises, had its GST registration cancelled on March 7, 2022, effective from February 7, 2022. The revenue has not contended that the registration was ever revived or that the petitioner sought its revival. The petitioner was therefore not obligated to check the GST portal for show cause notices issued for the period April 2019 to March 2020, which preceded an adjudication order dated August 22, 2024. The revenue also did not issue any physical or offline notice to the petitioner before passing the impugned order. The High Court found that the essential requirement of natural justice had not been fulfilled.

Held

The Court held that the adjudication order dated August 22, 2024, passed by the respondent authority, was liable to be set aside due to a violation of the principles of natural justice. The Court reasoned that the petitioner's GST registration had been cancelled, and it was not incumbent upon the petitioner to check the GST portal for e-mode notices. Crucially, the revenue had not issued any physical or offline notice to the petitioner before passing the impugned order. This failure to provide a proper opportunity to be heard rendered the adjudication order unsustainable. The ratio decidendi is that a taxpayer whose registration is cancelled cannot be expected to receive notices electronically through the GST portal, and the absence of physical notice before passing an adverse order violates natural justice. The Court set aside the order dated August 22, 2024, and directed the petitioner to submit its reply to the show cause notice within four weeks. Upon compliance, a fresh order was to be passed after affording an opportunity of personal hearing, expeditiously and preferably within three months.

Key Issues

1. Whether the adjudication order dated August 22, 2024, passed by the respondent authority, is liable to be set aside for non-compliance with the principles of natural justice, specifically concerning the issuance of show cause notices, in light of the petitioner's cancelled GST registration? Petitioner's Contention: The petitioner argued that since its GST registration was cancelled, it was not obliged to visit the GST portal to receive any show cause notices issued through e-mode for the period April 2019 to March 2020. Furthermore, the revenue did not issue any physical or offline notice to the petitioner before passing the impugned adjudication order. This failure to provide proper notice and an opportunity to be heard violates the principles of natural justice. Respondent's Contention: The respondent (State of Uttar Pradesh and Another) did not dispute the facts regarding the cancellation of registration or the absence of physical notice. Their argument, if any, was not recorded in the judgment.