OCTOBER 01, 2024

By Ashwarya Sharma, Co-Founder, RB Law Corp

GSTN has come out with an advisory on the issue of signing of documents (notices/orders) by the tax officers. As per the advisory, any notice or order issued through the Common Portal does not require signature by the officer as the same is issued only after login from the back-end officer interface which is done through Digital Signature Certificate [DSC] of the officer. Thus, the advisory justifies and concludes that physical signing of documents issued through the common portal is not required.

On the face of it, advisory appears to be almost virtuous, but devil lies in detail, and it raises important legal questions which needs to be answered.

Let us delve into the statutory provisions to find out the basis of requirement of signatures. As per rule 26(3) of the CGST Rules, all notices and orders issued under the chapter of registration (chapter-III) must be issued electronically through the portal through DSC or e-sign or verified through such other method as may be notified by the Board. The relevant text thus.

26. Method of authentication.-

…

(3) All notices, certificates and orders under the provisions of this Chapter shall be issued electronically by the proper officer or any other officer authorised to issue such notices or certificates or orders, through digital signature certificate or through e-signature as specified under the provisions of the Information Technology Act, 2000 (21 of 2000) or verified by any other mode of signature or verification as notified by the Board in this behalf.

Apart from the above, the CGST Act and/or the CGST Rules does not contain any specific provision for manner of effecting signatures on official documents and even though the above provision is limited to the chapter of registration it provides two duties on the proper officer, first being that the notice or order must be issued through the common portal and second, the same must contain DSC and/or other prescribed modes. Thus, there is nothing in the language of the said provision which states that notice and orders issued through the common portal must not be signed.

The Andhra Pradesh High Court in the matter of S.R.K. Enterprises Versus Assistant Commissioner (St), Visakhapatnam-I (Writ Petition No. 29397 of 2023, decided on 10-11-2023 or 2024-TIOL-396-HC-AP-GST) has held that a notice or order issued without signatures is invalid in the eyes of law even though it might be issued online through the common portal. The relevant para thus:

“Unsigned order is no order in the eyes of law. Merely uploading of the unsigned order, may be by the Authority competent to pass the order, would, in our view, not cure the defect which goes to the very root of the matter i.e. validity of the order."

The above view has been followed in Silver Oak Villas LLP Versus Assistant Commissioner (St), Begumpet Division, Hyderabad reported in (Writ Petition No. 6671 of 2024, decided on 14-3-2024) by the Telangana High Court. Same view was also adopted by the Bombay High Court in Ramani Suchit Malushte v. Union of India and Ors. (W.P. (C) 9331/2022, decided on 21-9-2022) [2023-TIOL-81-HC-MUM-GST] as well as the Delhi High Court in Marg ERP Ltd. v. Commissioner (W.P.(C) 872/2023) .

Thus, the Constitutional Courtshave consistently given authoritative pronouncement on the subject and following judicial discipline, the same should bind all lower authorities across India unless there is a contrary judgement of some other High Court in a particular State in terms of the decision of the Supreme Court in Union of India Vs. Kamlakshi Finance Corporation (2002-TIOL-484-SC-CX-LB) and Kusum Ingots v Union of India reported in (2004-TIOL-117-SC-CX-LB) and the position of law can be summed up as non-signing of a notice or order makes it nonest and no consequence can follow from such a notice or order.

Viewed from this angle,the recent advisory by GSTN conflicts with the settled legal position as it has justified such notice and orders as valid even though the same are invalid in terms of the High Court decisions.

Before parting, it would be useful to understand the status of GSTN and common portalin GST universe.The answer lies in section 2(26) and section 146 of the CGST Act read with Notification No. 4/2017-Central Tax dated 19th June, 2017 which states that:

(26). "common portal" means the common goods and services tax electronic portal referred to in section 146;

146. Common Portal. The Government may, on the recommendations of the Council, notify the Common Goods and Services Tax Electronic Portal for facilitating registration, payment of tax, furnishing of returns, computation and settlement of integrated tax, electronic way bill and for carrying out such other functions and for such purposes as may be prescribed.

Notification No.4/2017 - Central Tax F. No. 349/72/2017-GST Dated 19th June, 2017 

In exercise of the powers conferred by section 146 of the Central Goods and Services Tax Act, 2017 (12 of 2017) read with section 20 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government hereby notifies www.gst.gov.in as the Common Goods and Services Tax Electronic Portal for facilitating registration, payment of tax, furnishing of returns, computation and settlement of integrated tax and electronic way bill. 

Explanation.- For the purposes of this notification, "www.gst.gov.in" means the website managed by the Goods and Services Tax Network, a company incorporated under the provisions of section 8 of the Companies Act, 2013 (18 of 2013). 

Thus, GSTN is nothing but a company which manages the online website created to implement the GST laws virtually and its functions are limited to giving the software support for implementation of GST. It is neither an authority nor the delegate of some authority such as the Central Government who can issue notifications under section 2(80) or the Board which can issue Circulars to clarify any contentious legal position under the GST laws by virtue of section 2(16) and section 168 of the CGST Act. The relevant provisions read thus:

(16). "Board" means the Central Board of Indirect Taxes and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963.);

(80). "notification" means a notification published in the Official Gazette and the expressions "notify" and "notified" shall be construed accordingly;

168. Power to issue instructions or directions.

(1) The Board may, if it considers it necessary or expedient so to do for the purpose of uniformity in the implementation of this Act, issue such orders, instructions or directions to the central tax officers as it may deem fit, and thereupon all such officers and all other persons employed in the implementation of this Act shall observe and follow such orders, instructions or directions.

Thus, GSTN has not been given any authority under the law to clarify any provision or legal position. It is trite law that software must be in compliance with the law and not the other way around. Reliance is placed on the decision of the Delhi High Court in Vision Distribution Pvt Ltd reported in (2019-TIOL-2918-HC-DEL-GST).

Lastly, even the Circulars issued by the Board cannot bind the Court or quasi-judicial authority as the same is merely the understanding of the government. Reliance is placed on Supreme Court Constitution Bench decision in CCE v. Ratan Melting and Wire Industries 2008-TIOL-194-SC-CX-CB .

To conclude, taxpayers would be free to challenge any unsigned notice or order on account of the jurisprudence on the subject and any such GSTN advisory would not impact the right of the taxpayers.

[The views expressed are strictly personal.]