The Gauhati High Court has held that the order passed under Section 73 of the Central Goods and Service (CGST), Act, 2017 must mandatorily be signed by the proper officer.The Court believes that the impugned order challenged in the instant writ petition is contrary to the provisions of Section 73 as well as Rule 142 (1) (a) of the Rules as the said impugned Orders were passed with issuance of a proper Show Cause Notice.
Shri Shambhu Prasad, the petitioner was issued a Summary of the Show Cause Notice dated 29.09.2023 in the GST DRC-01. In the said Summary of the Show Cause Notice, it was mentioned that the Show Cause Notice was attached. Along with the said Summary of the Show Cause Notice, there was an attachment to the determination of tax dated 29.09.2023. The petitioner did not reply to the Show Cause Notice since there was no Show Cause Notice attached to the Summary of the Show Cause Notice. Pursuant thereto, the Order dated 29.12.2023 was issued in GST DRC-07.
To the said Order uploaded in GST DRC- 07, there was an attachment stating the manner in which the determination was made. The reason assigned for passing of the said order was that the taxpayer had not replied or contested the notice, and as such, had been agreed with the terms of the notice. It is relevant to mention that the attachments to both the GST DRC-01 as well as the GST DRC-07 did not contain any signature of the Proper Officer. It is the grievance of the petitioner that the petitioner was not provided with the opportunity of hearing as provided under Section 75 (4) of the CGST/AGST Act, 2017 before passing of the order dated 29.12.2023 and being aggrieved, the writ petition has been filed.
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It was submitted that it is the requirement in terms of Rule 142 of the Central Goods and Services Tax Rules, 2017 ( ‘the Rules of 2017’) that the notice under Section 73 has to be issued and a summary thereof is to be additionally issued electronically in Form GST DRC-01. The counsel for the petitioner further submits that under no circumstances the attachment to the GST DRC-01 can be said to be a Show
Cause Notice in as much as in the said attachment, there is no mention that the petitioner is required to show cause and that the said attachment to the DRC-01 does not contain the signature of the Proper Officer and it is the mandate of Rule 26 of the Rules of 2017 that the Show Cause Notice had to be authenticated with digital signature or through E-signature as specified under the provisions of the Information Technology Act, 2000 or verified by any other mode of signature or verification as notified by the Board in that behalf.
Per contra, the standing counsel for the Finance and Taxation Department of the Government of Assam submits that the respondent authorities have issued the Summary of the Show Cause Notice in Form DRC-01 which was accompanied by the determination of tax which as per the respondents would have provided all the details so that the petitioners could have submitted the reply. The learned counsel, however, fairly submits that there is no separate Show Cause Notice apart from the determination of tax enclosed to the Summary of the Show Cause Notice.
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On the question of lack of signatures in the attachments to the GST DRC-01 as well as the GST DRC-07, the learned counsel fairly submitted that the materials on record do not show that there is/are any signature(s) in the attachment to the Summary to the Show Cause Notice as well as Summary to the Order issued in Forms GST DRC01 and GST DRC-07 respectively. He however submitted that in the attachments it is mentioned as ‘Sd- Proper Officer’. The counsel further submitted that when the Summary of the Show Cause Notice as well as the Summary of the Order are uploaded in GST DRC-01 and GST DRC-07, the same are duly authenticated in the portal with digital signatures and without such authentication, the portal cannot be operated.
Justice Soumitra Saikia observed, that it is only the Proper Officer who has the authority to issue Show Cause Notice and the Statement and pass the order, the authentication in the Show Cause Notice, Statement as well as the Order by the Proper Officer is a must and failure to do so, makes the Show Cause Notice, Statement and Order ineffective and redundant.
It was viewed that the Summary of the Show Cause Notice along with the attachment containing the determination of tax cannot be said to be a valid initiation of proceedings under Section 73 without issuance of a proper Show Cause Notice. The Summary of the Show Cause Notice is in addition to the issuance of a proper Show Cause Notice.
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Under such circumstances, the Court believes that the impugned order challenged in the instant writ petition is contrary to the provisions of Section 73 as well as Rule 142 (1) (a) of the Rules as the said impugned Orders were passed with issuance of a proper Show Cause Notice. The court set aside the impugned order.
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