No GST Portal Check After Cancellation: HC Quashes GST Order Citing Violation of Principles of Natural Justice

The Meghalaya High Court, in a recent significant case, has ruled that once GST registration is cancelled, a taxpayer is no longer obliged to check the GST portal. In such a case, tax authorities should physically contact the taxpayer through an offline notice or order instead of merely issuing notices/orders online on the portal.

The Meghalaya High Court has delivered its judgement in a writ petition filed by Smti Jayshree Jhunjhunwala (petitioner) against the GST authorities, challenging an ex parte order dated December 22, 2023, passed by the Superintendent of Taxes, Circle II, Meghalaya, under Section 73 of the Meghalaya Goods and Services Tax Act, 2022, asking for the reversal of Input Tax Credit (ITC) along with interest and penalties.

The petitioner claimed that she was the owner of a company under the name and style of ‘Hanumanbux Umadutt’ bearing GST Registration No. 17ABYPJ1862E2ZC. She claimed that her company was sold in September 2021. Subsequently, her GST registration was cancelled, with effect from November 09, 2022. Once GST registration is cancelled, a taxpayer is not obliged to check the GST portal. Therefore, she was unaware of the show-cause notice (SCN) dated September 30, 2023, and the impugned order of December 22, 2023.

She only came to know about the same when the recovery officer physically contacted her son. She claimed that issuing any notice or order only through e-mode without physical service after GST cancellation indicates an explicit violation of the principles of natural justice. Therefore, the impugned order is invalid as per the law.

When the court heard the case, it found all the claims made by the petitioner genuine. Circumstances in the present case clearly reflect a violation of the principles of natural justice. It was not the case of the tax authorities, since they could have physically contacted the petitioner through an offline notice before issuing the final impugned order dated December 22, 2023. However, they did not. The final order was issued without hearing the petitioner’s view.

Hence, considering the same, the court quashed the impugned decision of December 22, 2023. Additionally, the petitioner has been given a time limit of three weeks (from the day of receiving the order) to furnish a reply to the initial SCN dated September 30, 2023. Thereafter, the tax authorities must pass a fresh order considering the petitioner’s reply.