Allahabad High Court on Invalidity of GST Portal Notices After Cancellation of Registration

Introduction

The Allahabad High Court, in A.K. Traders Vs State of U.P., examined the legality of a demand order issued under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017, in circumstances where the assessee’s GST registration had already been cancelled. The judgment reiterates and applies the principle that once registration stands cancelled, the assessee cannot be expected to regularly access the GST portal, and any subsequent show cause notice must be served through some other appropriate mode.

This decision aligns with the earlier ruling of a coordinate Bench in M/s Katyal Industries v. State of U.P. and others, Neutral Citation No.2024:AHC:23697-DB, and emphasizes adherence to the principles of natural justice in GST adjudication proceedings.

Background and Procedural History

Nature of the petition

  • The proceeding was instituted as a writ petition under Article 226 of the Constitution of India.
  • The assessee challenged an order passed by Assistant Commissioner, Sitapur, Sector-1, State Tax.
  • The impugned order was issued under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017 (referred to as “the Act”).

Key factual timeline

  1. The assessee’s GST registration under the Act was cancelled on 02.01.2025.
  2. After cancellation of registration, the assessee ceased its business activities.
  3. Subsequently, the Department uploaded a show cause notice on the GST portal.
  4. Based on this electronically uploaded notice, an order under Section 73 was passed on 20.12.2025, which became the subject matter of challenge before the High Court.

The core grievance was that the assessee had not been properly served with the show cause notice post-cancellation of registration, and thus was denied an effective opportunity of hearing before the demand was finalized.

Issues Before the Court

The High Court considered, in substance, the following issues:

  • Whether an assessee whose GST registration has been cancelled can be expected to continue monitoring the GST portal for departmental communications.
  • Whether uploading of a show cause notice on the GST portal, after cancellation of registration, constitutes valid service for the purposes of proceedings under Section 73 of the Act.
  • Whether passing an order under Section 73 solely on the basis of such portal-uploaded notice violates the principles of natural justice.
  • If so, what consequential relief the assessee is entitled to, and what liberty should be reserved for the Department.

Court’s Reasoning

No obligation to check GST portal after cancellation

The High Court held that once the GST registration of an assessee has been cancelled, there is no continuing obligation on that assessee to log in and verify updates on the GST portal. The electronic communication framework under GST assumes the existence of an active registration and regular compliance activities.