Demand Order Void As SCN Service Solely On Portal Post Registration Cancellation Violates Natural Justice

By | August 19, 2026
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Demand Order Void As SCN Service Solely On Portal Post Registration Cancellation Violates Natural Justice

Issue

Whether uploading a Show Cause Notice (SCN) under Section 73 solely on the GST portal constitutes valid service under Section 169 when the taxpayer’s registration has already been cancelled and no business operations are ongoing.

Facts

  • Registration Cancellation: The petitioner, a taxable entity registered under the Uttar Pradesh GST framework, had its registration cancelled.
  • Cessation of Business: Following the cancellation of registration, the petitioner ceased all business activities and carried on no further operations.
  • Portal-Only Service: The Commercial Tax Officer issued an SCN under Section 73 by uploading it exclusively on the GST portal.
  • Impugned Order: No alternative mode of service was attempted, and the officer subsequently passed a demand order against the petitioner.
  • Writ Challenge: The petitioner challenged the demand order via a writ petition, alleging a violation of the principles of natural justice due to lack of notice.

Decision

  • Invalidity of Portal-Only Notice: In favor of Assessee. The court held that once a GST registration is cancelled, the taxpayer is no longer obligated to regularly access or monitor the GST portal.
  • Breach of Natural Justice: In favor of Assessee. Relying solely on portal uploads post-cancellation without employing alternative statutory service modes under Section 169 does not constitute valid service and amounts to a complete breach of natural justice.
  • Quashing with Liberty: In favor of Assessee. The impugned demand order was quashed and set aside, with liberty granted to the department to issue a proper notice through physical or alternative valid modes and proceed in accordance with law.

Key Takeaways

  • No Obligation to Check Portal Post-Cancellation: Cancellation of GST registration terminates the ongoing duty of a taxpayer to monitor their online portal dashboard for official communications.
  • Mandatory Alternative Modes of Service: For cancelled entities, tax authorities must effect service of notices under Section 169 through physical delivery, registered post, or email rather than relying exclusively on portal uploads.
  • Violation Vitiates Assessment: Demand orders passed without proper service of SCN violate the fundamental principles of natural justice (audi alteram partem) and are legally unsustainable.
HIGH COURT OF ALLAHABAD
Amita Singh
v.
State of U.P.
Shekhar B. Saraf and ABDHESH KUMAR CHAUDHARY, JJ.
WRIT TAX No.1059 of 2026
AUGUST  6, 2026
Priyam Mishra and Abhay Pratap Singh for the Petitioner.
ORDER
1. Heard learned counsel for the parties and perused the record.
2. This is a writ petition under Article 226 of the Constitution of India wherein the petitioner is aggrieved by the order passed by the respondent No.3, Commercial Tax Officer, Ayodhya, Sector-1, Ayodhya (A) under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as “the Act”).
3. Factual matrix in the matter is that the petitioner’s registration under the Act was cancelled on 30.09.2022. Subsequent to the same, no business was carried out by the petitioner. It appears that a show cause notice was uploaded on the GST portal and subsequent to the same, the order impugned was passed under Section 73 of the Act.
4. Once the registration has been cancelled, the petitioner is not obligated to check GST portal. The mode of service of any show cause notice has to be by way of alternative means to the petitioner.
5. Counsel appearing on behalf of the petitioner relies upon an order passed by the coordinate Bench of this Court in Katyal Industries v. State of U.P. 2024:AHC:23697-DB. We are essentially in agreement with the said principle enunciated by the coordinate Bench in the said order.
6. We find that there has been violation of the principle of natural justice, and accordingly, the impugned order dated 16.08.2024 passed by the respondent No.3 is quashed and set aside. The Department shall be at liberty to issue a proper notice to the petitioner and act in accordance with law.
7. With the above direction, the writ petition is disposed of.