Physical GST Notices Compulsory After Registration Cancellation: Analysis of Allahabad High Court’s View

1. Background and Context

The Allahabad High Court in Steps Care India Vs Commissioner of State Tax And Another has once again underlined an important procedural safeguard under the GST regime: when a GST registration stands cancelled, mere uploading of a show cause notice on the GST common portal is not enough. Physical service of notice becomes mandatory to uphold principles of natural justice.

This decision fits within a broader judicial trend where courts are insisting that technical or electronic modes of service cannot override substantive rights of the assessee, especially the right to be heard under Section 75(4) of the **CGST/UPGST Act, 2017`.

The core dispute in the present matter turned on whether an adjudication order, founded entirely on an electronically served notice (uploaded on the portal) after cancellation of registration, can withstand judicial scrutiny. The Court answered in the negative and set aside the order.

2. Brief Facts of the Case

2.1 Cancellation and Subsequent Proceedings

  • Assessee: M/s. Steps Care India
  • Event 1 – Cancellation: GST registration was cancelled through an order dated 13 November 2019.
  • Event 2 – Show Cause Notice: A show cause notice dated 27 May 2024 was issued, but only by uploading it on the common GST portal. No physical service was attempted.
  • Event 3 – Adjudication Order: Based on this electronically uploaded notice, the Commissioner of State Tax and Another proceeded to pass an adjudication order dated 28 August 2024.

2.2 Assessee’s Grievance

The assessee asserted that:

  • Once its registration was cancelled in 2019, it could not be reasonably expected to access or monitor the common GST portal.
  • The show cause notice of 27 May 2024 was never served through any physical mode as contemplated by Section 169(1)(a) or Section 169(1)(b) of the UPGST Act.
  • As a result, it was completely deprived of the opportunity to:
    • Submit objections or a written reply, and
    • Avail a personal hearing, which is a statutory right under Section 75(4).

On this basis, the assessee challenged the adjudication order before the Allahabad High Court by way of a writ petition, seeking quashing of the order on the ground of patent illegality and breach of natural justice.

2.3 Stand of the Department

The State authorities argued that:

  • The show cause notice had been duly issued and “served” by uploading it on the GST common portal.
  • Service through the electronic portal is one of the recognised modes under Section 169(1)(d).
  • Hence, in their view, the initiation of adjudication and the subsequent order dated 28 August 2024 were valid and enforceable.

3.1 Core Question

The specific legal issue considered was:

Whether an adjudication order passed on the basis of a show cause notice that has been served only by uploading it on the GST common portal, in a situation where the registration already stands cancelled, is valid in law?

The answer depended on:

  • Interpretation of Section 169 (service of notice) of the CGST/UPGST Act,
  • The effect of cancellation of registration on the assessee’s ability/obligation to access the portal, and
  • The mandate of Section 75(4) regarding the right to a hearing.

4. Relevant Statutory Framework

4.1 Section 107 – Appeals to Appellate Authority

Section 107 of the CGST/UPGST Act, 2017 prescribes:

  • Right of any person aggrieved by a decision or order to appeal within three months from the date on which the decision or order is communicated.
  • Power of the Commissioner to direct filing of an appeal within six months from the date of communication of such decision or order.
  • Limited extension of time (one month) where sufficient cause is shown.

The emphasis on the “date on which the decision or order is communicated” makes the manner and timing of communication legally significant, particularly for limitation purposes.