M/S Ramakant vs. State Of U.P. And Another

Held

The Court held that the impugned adjudication order dated 23.02.2025 was set aside. The reasoning was based on the petitioner's argument that the show-cause notice was served only electronically on the Common Portal, and the petitioner remained unaware of the proceedings due to the cancellation of their registration. This was further supported by the Commissioner of Commercial Tax, U.P.'s Circular dated 07.05.2025, which mandated physical service of notice on assessees whose registration had been cancelled. The Court found merit in the petitioner's contention that such assessees might not be actively monitoring the Common Portal after cancellation. The Court directed that the petitioner may file its final reply to the show-cause notice within two weeks. If the petitioner sought to cross-examine witnesses or be supplied documents, such applications had to be made with the reply and would be decided before fixing a hearing date. The adjudicating authority was then to fix a personal hearing with at least 15 days' advance notice and pass a reasoned order within one month, concluding proceedings by 31.12.2026.

Facts

The petitioner challenged an adjudication order dated 23.02.2025, passed by the Deputy Commissioner, State Tax (SGST), Prayagraj for the Financial Year 2020-2021 under Section 73 of the UP GST Act, 2017. The petitioner's primary contention was that the show-cause notice was issued only electronically through the Common Portal on 27.11.2024, leading to an ex parte adjudication proceeding of which the petitioner remained unaware. The petitioner only gained knowledge of the adjudication order when recovery proceedings were initiated. A Circular dated 07.05.2025 issued by the Commissioner of Commercial Tax, U.P., mandated physical service of notice on assessees whose registration had been cancelled, recognizing that such assessees might not be actively monitoring the Common Portal.

Key Issues

1. Whether the electronic service of a show-cause notice on the Common Portal, after the cancellation of a taxpayer's registration, constitutes valid service, particularly in light of the subsequent Circular issued by the Commissioner of Commercial Tax, U.P., requiring physical service in such circumstances? (Question of law) The petitioner argued that electronic service alone was insufficient and invalid, especially after registration cancellation, as it prevented awareness of proceedings. They relied on the Commissioner's Circular dated 07.05.2025, which mandated physical service for assessees whose registrations were cancelled, deeming it founded on common sense. The petitioner contended that without physical notice, the proceedings remained ex parte and the adjudication order was consequently vitiated. The State, through the learned Standing Counsel, conceded that in the face of the Commissioner's Circular, there could be no dispute with the petitioner's proposition regarding the inadequacy of electronic service alone.