M/S Jai Maa Durga Recycling Plant vs. State Of Uttar Pradesh And Another

Held

The Court held that the adjudication order dated 30.12.2025 was liable to be set aside. The reasoning was based on the principle that once a person's registration is cancelled, they may not be actively monitoring the common portal or be obligated to do so. Therefore, electronic service of a show-cause notice, issued years after registration cancellation, without ensuring actual knowledge of the proceedings, violates principles of natural justice. The Court specifically referred to the Commissioner's Circular dated 07.05.2025, which recognized this issue and directed physical service of notice. The Court found no useful purpose in keeping the petition pending and decided to dispose of it on terms. The impugned order was set aside, and the petitioner was granted a period of two weeks to file its final reply to the show-cause notice. The petitioner was also given the liberty to apply for cross-examination or supply of documents with its reply. The adjudicating authority was directed to fix a personal hearing with advance notice and pass a reasoned order within one month thereafter, concluding proceedings by 31.12.2026.

Facts

The petitioner, M/S Jai Maa Durga Recycling Plant, challenged an adjudication order dated 30.12.2025 passed by the Assistant Commissioner State Tax, Etawah, Uttar Pradesh, under Section 74 of the UP GST Act, 2017. The petitioner's registration was cancelled on 02.08.2019. A show-cause notice was issued electronically on 25.12.2023, nearly four years after the registration cancellation. The petitioner claimed to be unaware of the adjudication proceedings due to the cancellation of registration and only learned of the ex parte order when recovery proceedings were initiated. The Commissioner of Commercial Tax, U.P., had issued a Circular on 07.05.2025 directing subordinate authorities to ensure physical service of notice in such cases.

Key Issues

1. Whether the adjudication order passed ex parte is invalid due to improper service of notice on the petitioner, considering the cancellation of its GST registration prior to the issuance of the show-cause notice? (Question of law and fact, concerning principles of natural justice and procedural compliance under the UP GST Act, 2017). Petitioner's argument: The petitioner contended that since its registration was cancelled on 02.08.2019, it was not obligated to monitor the common portal and therefore remained unaware of the show-cause notice issued electronically on 25.12.2023. The ex parte adjudication order dated 30.12.2025 was thus passed without the petitioner's knowledge. Reliance was placed on the Commissioner's Circular dated 07.05.2025, which mandates physical service of notice when registration is cancelled. Revenue's argument: The learned Standing Counsel, confronted with the Commissioner's Circular, conceded that there could be no quarrel with the proposition that physical notice should have been served.