High Court Quashes Order Under Section 73 of UPGST Act for Lack of Proper Service

The registration of the petitioner under the Uttar Pradesh Goods and Services Tax Act, 2017, was cancelled on 17/12/2020. After the date of cancellation of the registration, the petitioner has not conducted any business activities. Thereafter, a show cause notice was placed on the GST website, and then the order was given under Section 73 of the Act on 18/04/2024.

The petitioner questioned the order in a writ petition filed under Article 226 of the Constitution, arguing that there was no obligation to check the GST website once the registration was cancelled, and that the service of a show cause notice had to be done by alternative service. The petitioner relied on a coordinate bench decision to support the service of notice.

Issue Before Court: Whether the order passed under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017, can be sustained, where the show cause notice was only uploaded on the GST portal after cancellation of registration, resulting in a violation of the principle of natural justice.

Court’s Ruling: The High Court set aside the challenged order and held new proceedings. The Court held that there was a breach of the principle of natural justice on the basis that there was improper service of the show cause notice. After the cancellation of the petitioner’s registration, he had no need to keep a check on the GST portal for the notices. A show-cause notice uploaded on the GST portal could not be held to have been properly served.

Therefore, in light of the above discussion, the High Court quashed and set aside the Order dated 18/04/2024, passed under Section 73 of UPGST Act. The Court also gave liberty to the department to issue a notice to the petitioner properly and then act in accordance with the law.

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