Facts of the Case

The petitioner, M/s Jaiprakash Thekedar, challenged the cancellation of its GST registration under the Uttar Pradesh Goods and Services Tax Act, 2017. The GST authorities had issued a Show Cause Notice dated 31.08.2019 alleging that the petitioner had failed to file GST returns continuously for six months. Thereafter, an order dated 21.09.2019 cancelled the GST registration.

The petitioner contended that although the Show Cause Notice stated that an ex parte order could be passed if the petitioner failed to appear for personal hearing, the notice did not specify any date or time for such hearing. Consequently, the petitioner was deprived of a meaningful opportunity of being heard before cancellation of registration.

 

Issues Involved

  1. Whether a GST registration cancellation order is valid when the Show Cause Notice does not specify the date and time of personal hearing as required under Rule 22 of the UPGST Rules.
  2. Whether service of notice through the GST common portal alone satisfies the statutory requirements under Section 169 of the UPGST Act.
  3. Whether cancellation of GST registration without granting an effective opportunity of hearing violates the principles of natural justice.

 

Petitioner's Arguments

  • The petitioner argued that the Show Cause Notice was not properly served as it was not sent through registered post.
  • It was submitted that uploading the notice on the GST common portal alone was insufficient considering technical glitches frequently experienced on the portal.
  • The petitioner further contended that although the notice mentioned that failure to appear on the appointed date and time would result in an ex parte decision, it failed to specify any actual date or time for personal hearing.
  • Such omission deprived the petitioner of the statutory opportunity of hearing contemplated under Section 29(2) of the UPGST Act and Rule 22(1) of the Rules.
  • Reliance was also placed upon the judgment of the Madras High Court in Pushpam Reality and Others vs State Tax Officer & Others regarding procedural fairness.

 

Respondent's Arguments

  • The Revenue submitted that service of the Show Cause Notice through the GST common portal is a recognised mode of service under Section 169 of the UPGST Act.
  • However, the Revenue could not dispute that the impugned Show Cause Notice did not contain the date and time fixed for personal hearing.

 

Court Order / Findings

The Allahabad High Court observed that:

  • The first proviso to Section 29(2) of the UPGST Act mandates that a person must be afforded an opportunity of being heard before cancellation of registration.
  • Rule 22(1) read with Form GST REG-17 specifically requires that the Show Cause Notice must clearly mention the date and time for personal hearing.
  • The Show Cause Notice issued to the petitioner omitted this mandatory requirement.
  • The prescribed statutory format itself demonstrates that informing the taxpayer of the date and time of hearing is an essential procedural safeguard.
  • Since no date or time for hearing was mentioned, the petitioner was effectively denied the statutory opportunity of personal hearing.
  • Accordingly, the cancellation proceedings were held to be illegal, void, and a nullity in the eyes of law.
  • The cancellation order dated 21.09.2019 was therefore quashed.
  • The Revenue was granted liberty to initiate fresh proceedings strictly in accordance with law.

 

Important Clarification

The judgment reiterates that:

  • Mere issuance of a Show Cause Notice is not sufficient for cancellation of GST registration.
  • The notice must strictly comply with Rule 22 and Form GST REG-17.
  • Mentioning the specific date and time for personal hearing is mandatory.
  • Failure to provide such opportunity renders the entire cancellation proceedings invalid.
  • Even if service through the GST common portal is legally recognised under Section 169, compliance with the mandatory hearing requirement cannot be dispensed with.
  • Violation of statutory procedure amounts to violation of the principles of natural justice.

 

Sections Involved

  • Section 29(2), Uttar Pradesh Goods and Services Tax Act, 2017
  • Section 169, Uttar Pradesh Goods and Services Tax Act, 2017
  • Rule 22(1), Uttar Pradesh Goods and Services Tax Rules, 2017
  • Form GST REG-17
  • Principles of Natural Justice


Link to download the order -

https://www.mytaxexpert.co.in/uploads/1782968890_80compressed.pdf

 

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