Facts of the Case

The petitioner, M/s Jai Maa Gayatri Traders through its proprietor Jyoti Nishad, had its GST registration cancelled on 01.06.2023. After cancellation, the petitioner carried on no further business. Subsequently, a show cause notice was uploaded only on the GST portal, and on the basis of non-response, an order dated 06.06.2025 was passed against the petitioner under Section 74 of the U.P. GST Act, 2017. The petitioner challenged this order before the Allahabad High Court, contending that once its registration stood cancelled, it could not reasonably be expected to continue monitoring the GST portal for further notices.

Issues Involved

  1. Whether service of a show cause notice solely by uploading it on the GST portal is valid and sufficient once the taxpayer's registration has already been cancelled.
  2. Whether the resulting Section 74 order, passed without effective service, violated the principles of natural justice.

Petitioner's Arguments

  • Once registration under the Act was cancelled, the petitioner was not obligated to continue checking the GST portal for notices, since there was no ongoing business relationship with the portal thereafter.
  • The mode of service of any show cause notice, in such circumstances, ought to have been by alternative means directly to the petitioner.
  • Reliance was placed on the coordinate bench ruling in M/s Katyal Industries vs. State of U.P. (Neutral Citation No. 2024:AHC:23697-DB), which enunciated the same principle.

Respondent's Arguments

  • The State's counsel did not specifically dispute the applicability of the Katyal Industries principle to the facts; the record confirmed the SCN had been uploaded on the portal without any alternative mode of service being attempted.

Court Order / Findings

  • The Division Bench agreed with the principle enunciated in M/s Katyal Industries vs. State of U.P., holding that once registration under the Act has been cancelled, the assessee is not obligated to check the GST portal, and service of any show cause notice must be by alternative means.
  • The Court found a clear violation of the principle of natural justice in the manner of service.
  • The impugned order dated 06.06.2025 was quashed and set aside, with the Department left at liberty to issue a proper notice to the petitioner and act in accordance with law.

Important Clarification

  • Portal-only service of a show cause notice is not adequate where the recipient's GST registration already stands cancelled — such an assessee has no continuing obligation to monitor the portal.
  • In such situations, the Department must resort to alternative modes of service (e.g., registered post, email, or personal service) to satisfy natural justice before proceeding under Section 74.
  • An order passed without proper service is liable to be quashed for violation of natural justice, regardless of the merits of the underlying tax demand, which remain open for fresh adjudication after valid notice.

Sections Involved

  • Section 74, U.P. GST Act, 2017 — determination of tax involving fraud, wilful misstatement, or suppression, under which the impugned order was passed.
  • Section 169, CGST Act, 2017 — modes of service of notice, relevant to the adequacy of portal-only communication after cancellation.

Decision – In Favour of

Assessee. The Section 74 order was quashed for improper service, with liberty to the Department to issue a fresh, properly served notice.

Case Details

Court: High Court of Judicature at Allahabad, Lucknow Bench
Case No.: Writ Tax No. 1164 of 2025
Coram: Hon'ble Shekhar B. Saraf, J. and Hon'ble Prashant Kumar, J.
Date of Order: 03.11.2025

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