M/S Diamond Leguards Works vs. State Of U.P. And Another

Held

The Court held that the petitioner was not obligated to visit the GST portal to receive show cause notices for the period July 2017-March 2018, as its GST registration had been cancelled on 21.02.2023, and it was not revived. The revenue did not dispute this fact, nor did it claim to have issued any physical/offline notice to the petitioner before passing the adjudication order dated 08.12.2023. The Court found that the essential requirements of the rules of natural justice had not been fulfilled. Therefore, the adjudication order dated 08.12.2023 was set aside. The petitioner was directed to treat the said order as a notice and submit its final reply within four weeks. Following this, a fresh order was to be passed after affording an opportunity of personal hearing, expeditiously and preferably within three months. The ratio decidendi is that a taxpayer whose GST registration has been cancelled and not revived cannot be expected to receive notices via e-mode on the GST portal, and the absence of proper physical notice violates natural justice.

Facts

The petitioner, M/s Diamond Leguards Works, had its GST registration under the UPGST Act, 2017, cancelled on 21.02.2023. The revenue has not contended that this registration was ever revived or that the petitioner sought its revival. Consequently, the petitioner argues it was not obligated to check the GST portal for show cause notices issued for the period July 2017-March 2018, which preceded an adjudication order dated 08.12.2023. The revenue has also not claimed that any physical or offline notice was served on the petitioner before the impugned order was passed. The High Court considered these facts to be peculiar and sufficient to dispose of the petition without calling for a counter-affidavit or relegating the petitioner to an alternative remedy.

Key Issues

1. Whether the adjudication order dated 08.12.2023, passed pursuant to show cause notices for the period July 2017-March 2018, is vitiated by a violation of the principles of natural justice, specifically concerning the issuance and service of notices, given the cancellation of the petitioner's GST registration on 21.02.2023? Petitioner's Contention: The petitioner argued that since its GST registration was cancelled prior to the adjudication order, it was not obligated to monitor the GST portal for e-mode notices. Furthermore, no physical or offline notice was served. Therefore, the adjudication order, passed without proper notice, violates the principles of natural justice. Revenue's Contention: The revenue did not contend that the petitioner's registration was revived or that the petitioner sought revival. It also did not assert that any physical/offline notice was issued or served. The judgment does not record any specific argument from the revenue regarding the validity of the notice procedure in light of the registration cancellation.