Facts of the Case

M/s M.A. Traders challenged an order dated 09.04.2024, for Financial Year 2018-19, passed by the Deputy Commissioner, State Taxes, Sambhal, under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner's GST registration had already been cancelled on 14.09.2018, after which no business was carried out by the petitioner. Despite the cancellation, a show cause notice was uploaded only on the GST portal, and the impugned order under Section 73 was subsequently passed on that basis. The Division Bench of the High Court of Judicature at Allahabad heard the matter and decided it on 26.09.2025, relying on its coordinate Bench ruling in M/s Katyal Industries v. State of U.P.

Issues Involved

  1. Whether a taxpayer whose GST registration stands cancelled is obligated to continue monitoring the GST portal for notices.
  2. Whether service of a show cause notice solely through the GST portal, without any alternative mode of service, is valid once registration has been cancelled.
  3. Whether the resultant Section 73 order, passed on the strength of such a notice, violates principles of natural justice.

Petitioner's Arguments

  • Once the GST registration was cancelled in 2018, the petitioner ceased to carry on business and was not obligated to keep checking the GST portal for any notices thereafter.
  • The mode of service of a show cause notice, in such circumstances, ought to have been through an alternative means reasonably capable of reaching the petitioner, and not merely by upload on a portal the petitioner had no continuing reason to access.
  • Reliance was placed on the coordinate Bench decision in M/s Katyal Industries v. State of U.P., which the petitioner submitted enunciated the correct principle applicable to this class of cases.

Respondent's Arguments

  • The order does not record any specific rebuttal by the State to the contention that registration stood cancelled since 2018 or that portal-only service was inadequate; the Bench proceeds on the undisputed factual position.

Court Order / Findings

  • The Court agreed with the principle enunciated by the coordinate Bench in M/s Katyal Industries v. State of U.P., holding that once registration is cancelled, the assessee is not obligated to check the GST portal, and service of a show cause notice must be by alternative means.
  • Finding a violation of the principle of natural justice, the Court quashed and set aside the impugned order dated 09.04.2024 passed under Section 73 of the UPGST Act.
  • The Department was given liberty to issue a proper notice to the petitioner (through an appropriate mode of service) and to act in accordance with law thereafter.
  • The writ petition was disposed of with this direction.

Important Clarification

  • A taxpayer whose GST registration has already been cancelled is not expected to continue monitoring the GST portal, and the department cannot treat mere portal upload as sufficient service of a show cause notice on such a person.
  • Where the sole mode of communication used is portal upload despite cancellation of registration, the resulting adjudication order is vitiated for breach of natural justice, irrespective of the merits of the underlying tax demand.
  • The correct course for the department in such cases is to serve notices on cancelled-registration taxpayers through an alternative mode reasonably likely to reach them, such as post or email, rather than portal upload alone.

Sections Involved

  • Section 73, UPGST/CGST Act, 2017 - determination of tax not paid or short paid for reasons other than fraud or suppression of facts.
  • Section 169, UPGST/CGST Act, 2017 - prescribes the modes of service of notices, orders and other communications, including alternative modes beyond the GST portal.

Decision - In Favour of

Decided in favour of the assessee. The Section 73 order was quashed for improper service on a taxpayer with cancelled registration, with liberty to the department to issue a proper notice and re-adjudicate.

Case Details

Court: High Court of Judicature at Allahabad
Case No.: Writ Tax No. 5027 of 2025
Coram: Hon'ble Mr. Justice Shekhar B. Saraf and Hon'ble Mr. Justice Arun Kumar
Date of Decision: 26.09.2025

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