2018 (11) TMI 556 - HC - GST

Principles of Natural Justice - non-service of SCN - Cancellation of registration of dealer - UPGST Act - Held that - In the present case, the Assistant Commissioner could not come to any conclusion that all previous modes as prescribed under Section 169 are not practicable for the service of notice and has directly resorted to service by affixation. In such a situation, service if any by affixation cannot be regarded as a proper service. Moreover, nothing on record has been brought to establish the time, date and place and the manner in which service by affixation was resorted to. Similarly, there is no averment as to through whom the notice was sent for service - it has been stated that the show-cause notice was sent at the e-mail address of the petitioner on 18.01.2018 but again there is no material to support the said contention and the sending and receiving of any such email has been categorically denied by the petitioner. Thus, petitioner was not served any SCN - the impugned order dated 27.01.2018 is not at all sustainable - Petition allowed.

Summary

Issues:
Challenge to cancellation of dealer registration under U.P. G.S.T. Act based on violation of principles of natural justice and lack of proper service of show-cause notice.

Analysis:
The petitioner invoked writ jurisdiction under Article 226 to challenge the order cancelling registration. The main argument was the violation of natural justice due to improper service of the show-cause notice. The notice was allegedly sent to the petitioner's email address, but no evidence supported this claim. The Assistant Commissioner canceled registration based on prima facie satisfaction without conclusive evidence of the business closure.

The Act requires notice service as per Section 169, through direct delivery, registered post, email, or affixation as a last resort. The Assistant Commissioner directly resorted to affixation without proving the impracticability of other methods. Lack of details on the affixation process and the messenger's identity further weakened the service claim. The petitioner denied receiving any email notice, supported by email inbox evidence.

The judgment found the cancellation order solely based on prima facie opinion, lacking disclosed supporting material. The Assistant Commissioner needed a definite opinion on business closure before such action. The Special Counsel's argument for appeal as a remedy was rejected, considering the petition's merit hearing stage and the severe violation of natural justice.

Despite the appeal remedy, the Court quashed the cancellation order due to clear violations of natural justice norms. The order was deemed illegal, justifying the Court's intervention despite the availability of an alternate remedy. The judgment allowed the writ petition without costs, granting the respondent the opportunity to issue a fresh order complying with legal requirements.