Cancellation of registration and ex parte tax adjudication remanded for fresh adjudication after natural justice breach

Violation of the principles of natural justice arose where registration cancellation was treated retrospectively and adjudication proceeded ex parte without personal service of a show-cause notice; the writ challenge succeeded and the impugned order was set aside, resulting in remand to the assessing authority for fresh adjudication. The summary focus is on procedural fairness in tax-period adjudication, the invalidity of ex parte action taken without proper service, and the practical consequence of reopening the matter for reconsideration by the assessing authority.

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Issues: Whether the ex parte order passed under Section 73 of the UPGST Act, 2017 for the tax period April 2018-March 2019 is sustainable where the petitioner had earlier applied for cancellation of registration and the registration was cancelled with retrospective effect and no personal service of the show cause notice was shown to have been effected.

Analysis: The Court examined the record showing that the petitioner had applied for cancellation of registration prior to the impugned action and that the registration had been cancelled with retrospective effect, which indicated that the petitioner had ceased business and had no occasion to check the Department's portal. The Court relied on precedents in which similar facts resulted in finding violation of principles of natural justice where notices were uploaded on the portal and ex parte orders were passed without personal service or opportunity to be heard. In those circumstances the Court concluded that the impugned ex parte order could not stand and that the assessing authority must provide opportunity to the petitioner to respond to the show cause notice and thereafter pass a fresh order.

Conclusion: The writ petition is allowed; the impugned order is set aside and the matter is remanded to the assessing authority for fresh consideration after giving the petitioner an opportunity to submit its response to the show cause notice within fifteen days and to be heard.

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