Tag: GST

Digital-Only Service of Tax Notices Fails Natural Justice Where Registration Stands Cancelled, Rules Allahabad HC

A publisher whose GST registration was cancelled nearly five years before the Revenue chose to initiate adjudication proceedings against it has secured relief from the Allahabad High Court, which has struck down the resulting assessment order on the ground that uploading a show cause notice on the GST common portal — a portal the taxpayer could no longer access — amounted to no service at all. The Division Bench of Justice Saumitra Dayal Singh and Justice Vivek Saran, deciding Shri Dewan Publications v. Assistant Commissioner, State Tax and Another (Writ Tax No. 1580 of 2026), held that where a taxpayer’s registration has been cancelled, the statutory machinery must revert to physical modes of service prescribed under Section 169(1)(a) and (b) of the U.P.G.S.T. Act, 2017, failing which the proceedings stand vitiated for breach of natural justice.

The factual matrix was stark in its simplicity, and that simplicity is precisely what gave the legal question its force. Shri Dewan Publications had its GST registration cancelled prospectively with effect from 20 September 2019. The firm subsequently obtained a fresh registration under a new GSTIN to continue its trade. Nearly five years later, on 30 May 2024, the Revenue issued a show cause notice pertaining to the financial year 2019-20 — but uploaded it against the old, cancelled GSTIN on the common portal. An adjudication order followed on 29 August 2024. The petitioner, represented by Advocates Sumeet Mishra and Suyash Agarwal, contended that it had received no actual notice whatsoever — neither of the show cause notice nor of the adjudication proceedings — because it had no access to the portal linked to the defunct registration and was under no obligation to monitor it.

The Court’s reasoning rested on an elementary proposition that the GST administration’s digital architecture had obscured: a cancelled registration severs the taxpayer’s connection to the common portal. The Bench observed that the registration underpinning the adjudication proceedings had been cancelled approximately five years before the show cause notice was even issued, and that the entire proceeding appeared to have advanced solely on the basis of portal-based service against a registration that no longer existed in any functional sense. The Court further drew upon the Revenue’s own concession in Bambino Agro Industries Ltd. v. State of Uttar Pradesh & Anr., where the respondents had admitted that adjudication against persons with cancelled registrations may proceed only upon physical service of notice.

On this footing, the Bench set aside the adjudication order and the underlying proceedings in their entirety, granting liberty to the Revenue to recommence the process by issuing a fresh notice through physical mode, accompanied by all documents intended to be relied upon.

The decision exposes a structural vulnerability in the GST regime’s near-total dependence on digital communication infrastructure. Section 169 of the CGST Act and its state counterparts enumerate multiple modes of service — personal delivery, registered post, speed post, courier, and electronic means including the common portal. The legislative design contemplates these as alternatives, not a hierarchy, and certainly not a regime in which portal-based service operates as a fiction of deemed knowledge even after the taxpayer has been locked out of the system. As the Revenue increasingly pursues legacy tax periods against entities whose registrations have since lapsed or been cancelled — a category that runs into the hundreds of thousands — this ruling establishes a practical safeguard: the digital portal cannot substitute for actual notice where the precondition for digital access, namely an active registration, no longer exists. The principle is unremarkable as a matter of natural justice doctrine, but its articulation in the GST context fills a gap that the administration’s enforcement practices had quietly created.

Allahabad High Court, GST, Cancellation of Registration, Show Cause Notice, Physical Service, Section 169 UPGST Act, Natural Justice, Common Portal, Adjudication Notice, Writ Petition, Shri Dewan Publications, Bambino Agro Industries

Insurers Win Breathing Room as Bombay HC Questions Revenue’s Authority to Tax Pre-Amendment SEZ Supplies

The jurisdictional limits of retrospective taxation in the GST regime have come under sharp judicial scrutiny, with the Bombay High Court granting a blanket stay on tax demands raised against several of India’s largest general insurers over insurance policies sold to Special Economic Zone units between 2017-18 and 30 September 2023. The Division Bench of Justice G.S. Kulkarni and Justice Farhan P. Dubash, hearing a batch of writ petitions led by ICICI Lombard General Insurance Co. Ltd. (W.P. No. 7806/2025 & Batch), found prima facie merit in the insurers’ central contention — that the designated officer simply had no jurisdiction to reach back in time and impose GST on transactions that the law had, at the relevant time, classified as zero-rated.

The dispute traces its origin to a legislative amendment that took effect on 1 October 2023. Prior to that date, Section 16 of the IGST Act treated all supplies made to SEZ units as zero-rated without qualification. The Finance Act, through Notification No. 27/2023-Central Tax dated 31 July 2023, introduced the limiting phrase “for authorised operations” into Section 16, effective from 1 October 2023 onwards. The Revenue’s position, as articulated through the impugned show cause notices and assessment orders, was that this amendment was merely clarificatory in nature — a legislative exposition of what the law had always meant — and that insurance policies purchased by SEZ units for the benefit of their employees had never truly qualified as supplies for authorised operations. On this reasoning, the department sought to recover GST for the entire period stretching back to the inception of the GST regime in 2017-18.

The insurers — a consortium that included ICICI Lombard, HDFC Ergo, Bajaj Allianz, IFFCO Tokio, SBI General Insurance, and others — mounted a frontal challenge to this characterisation. Their argument, advanced by Senior Advocates Vikram Nankani (instructed by Pythogoras Legal, with Advocates Prithwiraj Choudhari and Aansh Desai) and Rohan P. Shah (with Harish Bindumadhavan, Mahir Chablani, Prathamesh Gargate, and Dimpal Jangaid), alongside Advocate Sriram Sridharan (with Shanmuga Dev and Aditi Jain), was straightforward: until the amendment came into force, the statute drew no distinction between types of supplies to SEZ units, and the entire category enjoyed zero-rated status as a matter of law, not administrative concession. To reclassify those supplies retrospectively, the insurers contended, would amount to imposing a tax liability that did not exist at the time the transactions occurred — a fundamental jurisdictional impossibility.

The Bench found considerable force in this submission. In its prima facie assessment, the Court observed that the designated officer would lack jurisdiction to retrospectively levy tax on the supply in question, namely the sale of insurance policies to SEZ units, for the period preceding the amendment. Having determined that the petitions raised arguable issues warranting full adjudication, the Court directed that all impugned orders arising from the challenged show cause notices shall remain stayed pending the hearing and final disposal of the petitions. The Revenue, represented by Advocates Yogendraprasad Ramdin Mishra, Siddharth Chandrashekhar, Ram Ochani, Jitendra B. Mishra, Karan Adik, and their respective teams, was directed to file reply affidavits within four weeks, with liberty to all parties to move for final hearing thereafter.

The interim order carries significance well beyond the immediate tax demands at stake. At its core, the case tests a principle that sits at the intersection of fiscal law and constitutional governance — whether Parliament’s power to amend a taxing statute carries within it the power to recharacterise past transactions through the device of calling an amendment “clarificatory.” The Revenue’s attempt to treat the October 2023 amendment as declaratory rather than substantive, if sustained, would have permitted the department to effectively nullify the zero-rated treatment that SEZ units and their suppliers had legitimately relied upon for over six years. The Bombay High Court’s willingness to intervene at the interim stage signals a judicial reluctance to endorse that approach, and the final outcome of these petitions could establish an important marker on the boundaries of retrospective fiscal action under the GST architecture — particularly for industries such as insurance, banking, and professional services that supply to SEZ units in ways that do not always map neatly onto the “authorised operations” framework the 2023 amendment introduced.