The Allahabad High Court in the case of M/s. LALARAM THEKEDAR VERSUS UNION OF INDIA AND 2 OTHERS vide Writ Tax No. – 2786 of 2025 dated 04.07.2025, has held that sole reliance on portal-based service of the notice without serving it through other valid means, amounts to a violation of the principles of natural justice. The Court agreed with the principle laid down in M/s Katyal Industries.

Facts of the case: In this case, the petitioner’s registration was cancelled on October 5, 2019. After such cancellation, the petitioner ceased to carry on any business. Subsequently, a show cause notice was uploaded on the GST portal, and based on the same, an assessment order dated August 31, 2024, was passed under Section 73 of the Act, raising a tax demand against the petitioner.

The petitioner challenged the assessment order primarily on the ground that the notice was never served through any alternate means, and since the registration had already been cancelled, the petitioner was not under an obligation to regularly check the GST portal for any updates or notices. Relied placed upon the judgment of the Allahabad High Court in M/s Katyal Industries v. State of U.P., which laid down that when registration is cancelled, mere uploading of the show cause notice on the GST portal without alternative service violates the principles of natural justice.

Issue: Whether the assessment order passed under Section 73 of the UP GST Act is valid when the show cause notice was not served through alternative modes of communication despite the petitioner’s registration having been cancelled.

Held that: The Court held that once the GST registration is cancelled, the taxpayer is not expected to monitor the GST portal regularly. Service of notice only through uploading on the portal is not sufficient in such a situation.

There is a clear violation of the principles of natural justice, as the petitioner was not afforded an effective opportunity of being heard before passing the adverse order. Also, the coordinate Bench in M/s Katyal Industries had correctly held that alternative service is required post-cancellation of registration, and this principle equally applied to the present case.

The Court quashed the assessment order passed under Section 73 of the Act. It directed the department to issue a proper show cause notice through appropriate alternate means and thereafter proceed in accordance with law.

The writ petition was accordingly disposed of, restoring the petitioner’s right to respond to a properly served notice and defend the assessment proceedings.

To read the complete judgment 2025 Taxo.online 1429