M/S Safe Roadlines vs. State Of U.P. And Another

Held

The Court held that the electronic issuance of the show-cause notice after the cancellation of the petitioner's registration was not proper service, as the petitioner was likely unaware of the proceedings. The Court found merit in the petitioner's argument that once registration is cancelled, a person may not be obligated to actively monitor the Common Portal and could remain unaware of subsequent proceedings. The Court acknowledged the binding instructions issued by the Commissioner of Commercial Tax, U.P., via its Circular dated 07.05.2025, which mandates physical service of notice on individuals whose registrations have been cancelled, when adjudication proceedings are initiated. The Court reasoned that this practice aligns with common sense and ensures fairness. Consequently, the impugned adjudication order dated 30.04.2024 was set aside. The petitioner was granted liberty to file its final reply to the show-cause notice within two weeks, with provisions for claiming cross-examination or document supply. The adjudicating authority was directed to provide at least 15 days' advance notice for a personal hearing and to pass a reasoned order within one month thereafter, concluding the proceedings by 31.12.2026.

Facts

The petitioner, M/S Safe Roadlines, challenged an adjudication order dated 30.04.2024 passed by the Commercial Tax Officer, Sector 16, Ghaziabad, Uttar Pradesh, under Section 73 of the UP GST Act, 2017. The petitioner's registration was cancelled on 30.11.2021. A show-cause notice was subsequently issued electronically on 24.12.2023, nearly three years after the registration cancellation. The petitioner claimed to be unaware of these proceedings, which proceeded ex parte. Knowledge of the adjudication order was gained only when recovery proceedings were initiated. A Circular dated 07.05.2025 from the Commissioner of Commercial Tax, U.P., mandated physical notice service for adjudication proceedings initiated after registration cancellation.

Key Issues

1. Whether the electronic issuance of a show-cause notice on 24.12.2023, after the petitioner's GST registration was cancelled on 30.11.2021, constitutes proper service of notice under Section 73 of the UP GST Act, 2017, given the petitioner's claimed unawareness of the proceedings? Petitioner's contention: The petitioner argued that after cancellation of registration, they were not obligated to monitor the Common Portal and therefore remained unaware of the adjudication proceedings initiated through electronic mode. They relied on the principle of natural justice and the subsequent Circular dated 07.05.2025 issued by the Commissioner of Commercial Tax, U.P., which mandates physical notice service in such circumstances. Revenue's contention: The learned Standing Counsel conceded that in light of the Commissioner's Circular dated 07.05.2025, there was no dispute with the petitioner's proposition regarding proper service of notice.