Gauhati High Court: SCN, Statement and GST Order U/S 73 Must Be Signed by Proper Officer

It was carried by the Gauhati High Court that the Show cause notice issued before the taxpayer under section 73 of the Central Goods and Services Tax Act, 2017, the Statement issued with the SCN as well as an Order passed u/s 73(9) must mandatorily be signed via the authorised Officer.

Justice Soumitra Saikia noted that “As it is the statutory mandate 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.”

The observation arrived in a petition warranted via the taxpayer arguing that he was not provided with the SCN but just a summary of SCN in DRC-01. Therefore against him, an order came to be passed in GST DRC-07, including an attachment citing how the decision was incurred.

No signature of the proper officer is present in the attachments to both the GST DRC-01 and the GST DRC-07.

It was argued by the applicant that it is the obligation of Rule 26 of the Central Goods and Services Tax Rules, 2017 that the show cause notice needs to be verified with the digital signature or through E-signature as cited under the provisions of the Information Technology Act, 2000 or validated via any additional mode of signature or verification as reported by the Board in that behalf.

On M/s Silver Oak Villas LLP vs. the Assistant Commissioner ST (2024) reliance was placed where a Division Bench of the Telangana High Court opined that since the impugned order therein was an unsigned document, it lost its effectiveness under Rule 26 (3) of the CGST Rules as well as the Telangana GST Act.

Also, the reference was made before AV Bhanoji Row vs. Assistant Commissioner (ST) & Others (2024) where a Division Bench of the Andhra Pradesh High Court noted that the notice was void and inoperative as there was no signature of the proper officer.

It was revealed by the department that no separate Show cause notice apart from the summary was issued. It revealed that on-record materials do not show that there is/are any signatures in the attachments.

It claimed that the attachments were cited as ‘Sd- Proper Officer’. It was additionally furnished that when the GST Show Cause Notice (SCN) summary along with the summary of the order was uploaded in the GST DRC-01 and GST DRC-07 then it was authenticated duly in the portal with the digital signatures and without these authentications the portal is inoperative.

Upon the non-issuance of the SCN but merely its summary the HC noted.

“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 the issuance of a proper Show Cause Notice.”

The High Court for the concern of the signature of the proper officer mentioned that “Statement as well as the Order are all required to be authenticated in the manner stipulated in Rule 26 (3) of the Rules of 2017.”

Read Also: Delhi HC Quashes GST Cancellation Order Due to Lack of Specifics in Show Cause Notice

On Railsyls Engineers Private Limited vs. Additional Commissioner of Central Goods and Services Tax (Appeals-11) and Anr. (2023) reliance was placed where the Delhi High Court ruled that there was a need to at least place signatures on the SCN and the order in original.

Consequently, the impugned order was set aside.