Portal-only upload of notice after GST registration cancellation is invalid, quashing the tax order
Issue
Whether the State Tax Department can legally sustain a tax assessment order passed under Section 73 when the underlying show cause notice was served solely by uploading it to the GST portal after the taxpayer’s registration had already been cancelled.
Facts
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The petitioner was a registered person under the GST Act whose tax registration was formally cancelled.
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Following the cancellation of the registration, the petitioner completely ceased operations and did not carry out any further business activities.
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Subsequently, the Deputy Commissioner (State Tax) initiated tax proceedings for an alleged liability and issued a show cause notice to the petitioner.
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The department served this show cause notice exclusively by uploading it to the official GST portal, without utilizing any alternative direct communication methods.
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Relying on this portal-only service, the Deputy Commissioner proceeded to pass an ex-parte assessment order against the petitioner under Section 73.
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Aggrieved by the order passed without their knowledge, the petitioner filed a writ petition challenging the validity of the assessment on the grounds of lack of proper service.
Decision
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Held, yes: Once a taxpayer’s GST registration stands formally cancelled, they are no longer under a statutory or practical obligation to routinely log in and check the GST portal for communications.
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Held, yes: For any show cause notice issued after the cancellation of a registration, the department must effect service through an alternative, dependable mode (such as physical mail or direct email) to guarantee actual communication.
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Held, yes: Because the service of the notice rested solely on a portal upload after business closure, the principles of natural justice were fundamentally violated as the petitioner was denied a fair opportunity to be heard.
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Held, yes: Consequently, the impugned assessment order passed under Section 73 is legally unsustainable and is ordered to be quashed, leaving it open for the Revenue to issue a fresh notice in accordance with the law.
Key Takeaways
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No Portal Duty Post-Cancellation: The legal expectation to regularly monitor the electronic GST dashboard ends once the registration is dissolved. The department cannot treat the portal as a valid mailbox for individuals who are no longer active taxpayers.
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Mandate for Alternative Service Modes: To satisfy the requirements of Section 169 and natural justice, the Revenue must proactively use direct communication channels—like registered post or verified personal email addresses—when targeting ex-taxpayers.
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Quashing Does Not Erase Liability: When an order is set aside due to faulty service of notice, it constitutes a procedural victory for the assessee. The court will typically grant the tax authorities the liberty to restart the proceedings correctly using proper methods of service.