Registration Cancellation Invalidated as Show-Cause Notice Was Not Properly Served Beforehand.
Issue
Is a GST registration cancellation order legally valid if the show-cause notice (SCN) was allegedly issued only electronically after the registration had already been cancelled, and no physical notice was served, thereby denying the taxpayer an opportunity to be heard?
Facts
- The assessee’s GST registration was cancelled for the period covering July 2017 to March 2018.
- The tax authority claimed to have issued a show-cause notice electronically.
- However, this electronic notice was allegedly uploaded to the GST portal only after the assessee’s registration had already been cancelled.
- Crucially, no physical or offline notice was ever served on the assessee before the final adjudication order was passed.
Decision
- The High Court set aside the impugned adjudication and cancellation order.
- It ruled that an assessee whose registration is already cancelled is not obligated to regularly visit the GST portal to check for notices that might have been uploaded.
- The court found that the essential requirement of the rules of natural justice—specifically, the right to a fair hearing—was not fulfilled.
Key Takeaways
- Natural Justice is Non-Negotiable: A fundamental principle of law is that no one should be condemned unheard. An order passed without a proper show-cause notice and a fair opportunity to respond is invalid.
- Proper Service of Notice is Mandatory: The burden is on the tax department to ensure that a notice is properly served on the taxpayer before passing an adverse order. Simply uploading it to the portal, especially after cancellation, does not constitute valid service.
- Cancelled Taxpayers’ Obligations: Once a registration is cancelled, the taxpayer cannot be expected to maintain the same level of engagement with the GST portal as an active registrant. This practical consideration was key to the court’s decision.
HIGH COURT OF ALLAHABAD
K M R International
v.
State of U.P.
Shekhar B. Saraf and Praveen Kumar Giri, JJ.
WRIT TAX No. 4570 of 2025
SEPTEMBER 12, 2025
Vishwjit for the Petitioner. Ankur Agarwal, Learned Standing Counsel for the Respondent.
ORDER
1. Having heard Sri Vishwjit, learned counsel for the petitioner and Sri Ankur Agarwal, learned Standing Counsel for the respondents, it remains undisputed that the petitioner’s registration under the UPGST Act, 2017 was cancelled on 23.04.2021 w.e.f. 31.03.2021. It is not the case of the revenue that the said registration has ever been revived or that the petitioner ever sought revival of that registration.
2. In view of the above, it does merit acceptance that the petitioner was not obligated to visit the GST portal to receive the show cause notices that may have been issued to the petitioner for July, 2017 – March, 2018 through e-mode, preceding the adjudication order dated 01.12.2022 passed under Section 74 of GST Act in pursuance thereto.
3. It is also not the case of the revenue that any physical/offline notice was issued to or served on the petitioner before the impugned order came to be passed.
4. In view of peculiar facts noted above, no useful purpose may be served in keeping the petition pending or calling counter affidavit at this stage or to relegate the present petitioner to the forum of alternative remedy.
5. Since essential requirement of rules of natural justice has remained to be fulfilled, we set aside the order dated 01.12.2022. The petitioner may submit its reply to the show cause notice within a period of four weeks from today. Subject to such compliance by the petitioner, fresh order may be passed after affording opportunity of personal hearing, as expeditiously as possible, preferably within a period of three months therefrom.
6. Writ petition is, accordingly, disposed of.