GST Notices Cannot be Deemed Served only by Portal Upload after Cancellation of Registration: Allahabad HC says its Natural Justice Violation [Read Order]

The High Court of Judicature at Allahabad, Lucknow Bench, quashed orders passed under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017 and held that once a petitioner's registration was cancelled, they are not obligated to check the GST portal.

Kiran Enterprises (petitioner) whose registration under the Act was cancelled on January 8, 2021. Following the cancellation, the petitioner ceased carrying out business. The department uploaded Show cause notice in the GST portal and passed an order under section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017.

Section 73 reads 1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or any wilful misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made there under.

(2) The proper officer shall issue the notice under sub-section (1) at least three months prior to the time limit specified in sub-section (10) for issuance of order.

(3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under subsection (1), on the person chargeable with tax.

The petitioner challenged the impugned orders dated April 23, 2022, November 23, 2022, April 24, 2022, and February 13, 2025.

The counsel for the petitioner relied on an order passed by the coordinate Bench of the Court in the case of M/s Katyal Industries v. State of U.P. and others.

The bench comprising Justice Shekhar B. Sarafand Justice Manjive Shukla, expressed agreement with the principle enunciated by the coordinate Bench.

The bench observed that once the registration has been cancelled, the petitioner was not obligated to check the GST portal. The court held that the mode of service of any show cause notice has to be by way of alternative means to the petitioner.

The court found that serving a show causenotice solely through a portal upload subsequent to the cancellation, and without alternative means of service, constituted a violation of the principle of natural justice.

The court held that the impugned orders are quashed and set aside. The court granted the department liberty to issue a proper notice to the petitioner and act in accordance with the law. The writ petition was disposed of with this direction. As a result, the petition was allowed.

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