Facts of the Case

The petitioner, M/S Inder Bhan Singh, through its proprietor Indra Bhan Singh, was aggrieved by an order dated 18.04.2024 passed by the Deputy Commissioner, Ayodhya Sector-5, Ayodhya, Uttar Pradesh under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner's GST registration had already been cancelled on 17.12.2020, and no business was carried out thereafter. A show cause notice was uploaded on the GST portal without any parallel mode of service, and the impugned order under Section 73 was subsequently passed on that basis. Aggrieved, the petitioner approached the High Court of Judicature at Allahabad, Lucknow Bench, by way of a writ petition under Article 226 of the Constitution of India.

Issues Involved

  1. Whether uploading a show cause notice on the GST portal alone constitutes valid and sufficient service on an assessee whose GST registration already stands cancelled.
  2. Whether an order passed under Section 73 on the basis of such notice, without any alternative mode of service, is vitiated for violation of the principles of natural justice.

Petitioner's Arguments

  • The petitioner's registration under the Act had been cancelled on 17.12.2020, and no business was thereafter carried out.
  • Since the registration stood cancelled, the petitioner could not reasonably be expected to keep monitoring the GST portal for notices.
  • Relied on a coordinate Bench decision of the Allahabad High Court in M/s Katyal Industries v. State of U.P. and others (Neutral Citation No. 2024:AHC:23697-DB), where an identical principle was laid down.
  • Contended that service of the show cause notice solely via portal upload, without any alternative mode of service, violated principles of natural justice.

Respondent's Arguments

  • The State, represented through its counsel, did not advance any specific factual justification defending the mode of service adopted; the order proceeded on the record as it stood, with the Court noting the absence of service through any alternative mode.

Court Order / Findings

  • The Division Bench agreed with the principle laid down in Katyal Industries that once GST registration has been cancelled, the assessee is not obligated to check the GST portal, and service of any show cause notice on such a person has to be effected through alternative means.
  • Held that there was a clear violation of the principles of natural justice in the manner the show cause notice was served on the petitioner.
  • Accordingly, the impugned order dated 18.04.2024 passed under Section 73 was quashed and set aside.
  • The Department was granted liberty to issue a proper notice to the petitioner and proceed in accordance with law.
  • The writ petition was disposed of with the above direction.

Important Clarification

  • Where a taxpayer's GST registration has already been cancelled, the tax department cannot rely solely on portal-based service of a show cause notice, since a person without an active registration cannot be presumed to be regularly checking the portal.
  • Service must be effected through an alternative mode reasonably capable of bringing the notice to the assessee's knowledge before proceedings under Section 73 can validly culminate in a demand order.
  • Failure to do so renders the resultant order liable to be quashed for breach of natural justice, without foreclosing the department's right to reinitiate proceedings with proper service.

Sections Involved

  • Section 73, Uttar Pradesh Goods and Services Tax Act, 2017 — determination of tax not paid or short paid, or input tax credit wrongly availed, for reasons other than fraud or wilful misstatement.
  • Article 226, Constitution of India — writ jurisdiction of the High Court invoked to challenge the demand order on grounds of violation of natural justice.

Decision – In Favour of

The writ petition is disposed of in favour of the Assessee, with the impugned Section 73 order quashed for breach of natural justice, while liberty is reserved to the Department to issue a fresh, properly served notice and proceed in accordance with law.

Case Details

Court: High Court of Judicature at Allahabad, Lucknow Bench
Case No.: Writ Tax No. 1420 of 2025
Coram: Hon'ble Shekhar B. Saraf, J. and Hon'ble Manjive Shukla, J.
Date of Order: 11 December 2025
Petitioner's Counsel: Satish Kumar Pandey
Respondent's Counsel: C.S.C.

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