S.73 CGST Act | SCN, Order Issued Without Signature Of Proper Officer Is 'Ineffective': Gauhati High Court

The Gauhati HIgh Court has held that the Show Cause Notice issued to an assessee under Section 73 of the Central Goods and Services Tax Act, 2017, the Statement issued along with the SCN as well as an Order passed under Section 73(9) must mandatorily be signed by the Proper Officer.Justice Soumitra Saikia observed, “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 comes in a petition preferred by an assessee, contending that he was not issued the SCN but merely a Summary of SCN in DRC-01. Subsequently, an order against him came to be passed in GST DRC-07, along with an attachment stating the manner in which the determination was made. However, attachments to both the GST DRC-01 as well as the GST DRC-07 did not contain any signature of the Proper Officer.Petitioner contended that it is the mandate of Rule 26 of the Central Goods and Services Tax Rules, 2017 that the SCN 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.Reliance was placed on M/s Silver Oak Villas LLP vs. the Assistant Commissioner ST (2024) where a Division Bench of the Telangana High Court opined that since the impugned order therein was an unsigned document, it lost its efficacy in the light of Rule 26 (3) of the CGST Rules as well as the Telangana GST Act.Reference was also made to AV Bhanoji Row vs. Assistant Commissioner (ST) & Others (2024) where a Division Bench of the Andhra Pradesh High Court had observed that as there was no signature of the Proper Officer, the notice was void and inoperative.The Department conceded that no separate SCN apart from the Summary was issued. It also conceded that materials on record do not show that there is/are any signature(s) in the attachments. However, it contended that the attachments were mentioned as 'Sd- Proper Officer'. It was further submitted that when the Summary of SCN 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.On the aspect of non-issuance of a SCN but only its Summary, the High Court observed.“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.”Also Read: [Tax Not Paid/ Short Tax] 'Summary Of Show Cause Notice' In GST DRC-01 Not A Substitute For SCN U/S 73(1) CGST Act: Gauhati HCSo far as the signature of the proper officer is concerned, the High Court said, “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.”Reliance was placed on Railsyls Engineers Private Limited vs. Additional Commissioner of Central Goods and Services Tax (Appeals-11) and Anr. (2023) where the Delhi High Court held that there was a requirement of at least putting the digital signatures on the Show Cause Notice and Order in Original.Accordingly, the impugned order was set aside.Appearance: Advocate for the Petitioner : Mr. R S Mishra, Ms. N Parasar,Mr. A K Gupta; Advocate for the Respondent : SC, Finance And TaxationCase title: Shri Shambhu Prasad v. The State Of Assam And OrsCase no.: WP(C)/6807/2024Click here to read order

S.73 CGST Act | SCN, Order Issued Without Signature Of Proper Officer Is 'Ineffective': Gauhati High Court

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