The Telangana High Court ruled that orders under the GST and Show Cause Notices (SCN) that are not signed by the appropriate officer cannot withstand judicial review.
While the contested show-cause notices and final orders were posted on the portal, the petitioners/assessees, Bigleap Technologies and Solutions Pvt. Ltd., have contested their legality, validity, and appropriateness, pointing out that they lack the Proper Officer’s digital or physical signatures.
The department said that neither digital nor physical signatures are present on the show-cause notices and orders. Nevertheless, if the Central Goods and Services Act, 2017 (GST Act) and the Central/Telangana State Goods and Services Rules, 2017 (GST Rules) are analyzed, the show-cause notices or orders will remain intact notwithstanding the lack of a signature.
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The agency said that Form GST REG contains the statutory forms issued under Chapter III. The GST Rules’ Chapter XVIII addresses “Demands and Recovery,” and the forms used in this chapter are found in FORM GST DRC. The process of issuing demand notices and passing demand orders is covered in Rule 142 of Chapter XVIII of the GST Rules. Serving a summary of notice in Form GST DRC-01 is covered by Rule 142 (1) (a), and electronically uploading a summary or order in Form GST DRC-07 is covered by Rule 142 (5). The requirement for a digital signature on a notification or order summary is not stated in any of the rules.
In its advice dated 25.09.2024, the Goods and Services Tax Network (GSTN) made it clear that officers use their digital signature to access the common site, where show-cause notices and orders are created. Since the officers can only issue these papers by logging into the portal and providing their digital signatures, they do not need a digital signature because they are computer-generated at their direction. Therefore, without the officers’ digital or physical signatures, neither the orders nor the show-cause notifications can be marked as invalid.
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The petitioner argued that it is a well-established legal requirement that show-cause notices and orders bear the officer’s signature. The document is not authenticated if it is not signed.
The bench of Acting Chief Justice Sujoy Paul and Justice Renuka Yara has observed that various High Courts including Delhi, Andhra Pradesh, Kerala, Gauhati and this Court have taken the view that notice/order must contain the signature, and in absence thereof, they are invalid.
The court determined that the notification or order is vulnerable since the Rule and the prescribed forms require the Proper Officer’s signature. If the court takes a different stance regarding DRC-07 not being signed without taking into account the aforementioned norm and the necessary form, it must be held incuriam. The notices and orders were all revoked by the court.
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