Cancellation of GST Registration Without Physical Notice and Personal Hearing Set Aside

Issue: Whether the cancellation of GST registration, based on a show cause notice issued only through the GST portal without physical or offline service and without affording a personal hearing, violates the principles of natural justice.

Facts:

The assessee’s registration was canceled with effect from March 31, 2019, for the period 2018-19.
A show cause notice relating to FY 2018-19 was issued via the GST portal preceding the adjudication order dated April 24, 2024.
Crucially, no physical or offline notice was served to the assessee before the impugned order was passed.

Decision: The impugned adjudication order was set aside because the essential requirements of the rules of natural justice had not been fulfilled. A fresh order was to be passed after affording the assessee an opportunity of personal hearing. The matter was remanded back for fresh consideration.

Key Takeaways:

Principles of Natural Justice: The judgment emphasizes the critical importance of adhering to the principles of natural justice, specifically the right to be heard ( $a u d i$ $a lt er am$ $p a r t e m$ ), before passing an order with significant consequences like cancellation of GST registration.
Effective Service of Notice: Issuing a show cause notice solely through the GST portal may not be sufficient if it does not ensure that the assessee has actual knowledge of the proceedings, especially when physical or offline notice is not also served.
Opportunity of Personal Hearing: A personal hearing is a fundamental component of natural justice, allowing the assessee to present their case directly and clarify any ambiguities. Its absence renders the order vulnerable to challenge.
Consequences of Non-Compliance: Failure to observe natural justice principles can lead to the setting aside of an order and a remand of the matter for fresh adjudication, causing delays and additional administrative burden.

HIGH COURT OF ALLAHABAD

Nitco Coating Agency

State of U.P.

Arun Bhansali, CJ.
and Kshitij Shailendra, J.

WRIT TAX No. – 2027 of 2025

MAY 6, 2025

Vedika Nath and Yashonidhi Shuklafor the Petitioner. Manoj Kumar Kushwaha, S.C. for the Respondent.

ORDER

1. Having heard Ms. Yashonidhi Shukla, learned counsel for the petitioner and Shri Manoj Kumar Kushwaha, learned Standing Counsel for the respondents, it remains undisputed that the petitioner’s registration under the UPGST Act, 2017 was cancelled on 24.04.2019 w.e.f. 31.03.2019. 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 2018-19 through e-mode, preceding the adjudication order dated 24.04.2024 passed 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 24.04.2024. 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.