Vishwa Enterprise Vs State of Gujarat (Gujarat High Court)
Summary: The Gujarat High Court considered a writ petition challenging cancellation of the GST registration of M/s Vishwa Enterprise. The petitioner had regularly filed monthly returns up to 31 March 2022 but thereafter failed to file returns for more than six months due to inability to pay the dues. A show-cause notice dated 9 November 2022 was issued and the registration was ultimately cancelled with effect from 31 March 2022. The petitioner subsequently filed an appeal with a delay of 305 days along with payment of tax dues of ₹71,613, but the Appellate Authority dismissed the appeal since it had no power under Section 107(4) of the GST Act to condone such delay.
The petitioner principally contended that the show-cause notice and cancellation order were unsigned and therefore invalid. Reliance was placed on several High Court decisions requiring notices and orders to bear physical or digital signatures. The State opposed the contention by relying upon Rule 26 of the GST Rules and the advisory dated 25 September 2024 concerning notices/orders generated through the common portal. It submitted that the documents carried valid reference numbers and were generated only after the proper officer logged into the GST portal using a digital signature.
The High Court rejected the petitioner’s contention that the notice and cancellation order were invalid merely because signatures were not visible on the downloaded documents. The Court noted that the documents had been uploaded on the GSTN portal, which could be done only after verification by the concerned State Tax Officer through the portal after logging in using the digital signature. The advisory further explained that such computer-generated documents may not require the officer’s physical signature because the underlying order details and issuing officer’s particulars are stored in the GST system with the issuing officer’s digital signature. Accordingly, the plea that the notice and order were unsigned was held untenable.
The Court also rejected the petitioner’s contention that financial difficulties justified the delayed appeal. It noticed, however, that the petitioner had filed the revocation application and affidavit before the Appellate Authority instead of the State Tax Officer. Considering that the petitioner was a proprietor and a lady, the Court considered it appropriate in the interest of justice to grant one more opportunity to apply for revocation of the cancelled GST registration.
Accordingly, the petitioner was permitted to file an application for revocation before the State Tax Officer within two weeks, together with all requisite documents, returns required from 1 April 2022 till date and proof of payment of tax, interest and penalty. The State Tax Officer was directed to decide the application in accordance with law within four weeks of its receipt. With these directions and without entering into the merits, the petition was disposed of with no order as to costs.
Cases Discussed
1. Railsys Engineers Pvt Ltd Vs Additional Commissioner of CGST — 2022 (65) G.S.T.L. 159 (Delhi) — Relied upon by the petitioner for the contention that show-cause notices and orders are required to be signed by the issuing authority.
2. Marg ERP Ltd Vs Commissioner of Delhi Goods and Services Tax — (2023) 7 Centax 174 (Delhi) — Relied upon by the petitioner on the requirement of signature on GST orders.
3. Ramani Suchit Malushte Vs Union of India — 2023-TIOL-81-HC-MUM-GST — Relied upon in support of the challenge to an unsigned order.
4. Prakash Krishnavtar Bhardwaj Vs ITO — 2023 SCC OnLine Bom 59 — Relied upon by the petitioner concerning the requirement of authentication/signature.
5. SRK Enterprises Vs Assistant Commissioner (ST) — (2023) 13 Centax 60 (A.P.) — Relied upon by the petitioner in support of the challenge to unsigned notices/orders.
6. M/s Fortune Service Vs Union of India and Others — Writ Petition No.20656 of 2024 and allied matters (Kerala High Court) — Relied upon for the proposition that an order is required to be signed before uploading or service upon the taxpayer.
7. Silver Oak Villas LLP Vs Assistant Commissioner (ST), Begunpet Division, Hyderabad — (2024) 17 Centax 442 (Telangana) — Referred to through the Kerala High Court decision concerning orders not signed by the State Tax Officer.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Heard learned advocate Mr.Jeevan R. Vasave for the petitioner and learned Assistant Government Pleader Ms.Shrunjal Shah for the respondent.
2. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs :
“a) Your Lordship may be pleased to admit this Petition.
b) Your Lordship may be pleased to quash and set aside the impugned order of the Appeal, at Annexure “A”, Unsigned Order of Cancellation of the Registration Certificate, at Annexure “B”, the Unsigned Show Cause Notice, at Annexure “D”, and restore the Certificate of Registration at Annexure “C”” As the order of the Appeal is based on the illegal, null and void ab initio show cause notice and order of cancellation. Hence the order of the Appeal becomes illegal, null and void ab-initio liable to be set aside ab-initio.
c) Your Lordship may be pleased to pass any other appropriate order, directions as may be deemed fit and proper.”
3. The brief facts of the case are as under :
3.1. The petitioner is having the registration under the provisions of the Central/State Goods and Services Tax Act, 2017 (for short ‘the GST Act’). The petitioner filed monthly returns regularly up to 31st March, 2022 and have paid the taxes in time. It is the case of the petitioner that from 1st April, 2022, the petitioner could not file the periodical returns for more than six months and hence, show-cause notice for filing the returns and payment of tax, penalty and interest was issued on 09.11.2022. It is the case of the petitioner that the petitioner was not in a position to pay the dues arising as per the returns and therefore, the returns were not filed as required under the provisions of the GST Act as well as in response to the show-cause notice dated 09.11.2022. The respondent-State Tax Officer therefore cancelled the Registration Certificate of the petitioner with effect from 31st March, 2022. It is the case of the petitioner that the petitioner thereafter filed an Appeal before the Deputy Commissioner of State Tax on 03.01.2024 with an application to condone the delay of 305 days along with the payment of tax dues of Rs.71,613/-.
3.2. However, the Appellate Authority dismissed the Appeal on ground of delay as the Appellate Authority does not have any power to condone the delay as stipulated in Section 107(4) of the GST Act. Being aggrieved, the petitioner has preferred this petition.
4.1. Learned advocate Mr.Jeevan R. Vasave for the petitioner submitted that the respondent-Authority has issued the show-cause notice only on the ground that there was a failure on the part of the petitioner to file the returns for continuous six months. It was also pointed out that the petitioner had preferred a Revocation Application along with the payment of interest and penalty and filed the returns also with late fees up to month of December, 2023 along with the application made before the respondent-Authority. The petitioner has also filed an affidavit dated 18th January, 2024 along with the requisite details and assurance to make the payment and file the returns in time in future.
4.2. It was therefore submitted that the petitioner may be given an opportunity to continue her business. In support of his submissions, reliance was placed on the following decisions raising the contention that SCNs and the Orders are to be signed by the Authority and that even if the SCNs and Orders were uploaded on the portal, the digital signature is required to be affixed:
(i) Railsys Engineers Pvt Ltd vs Additional Commissioner of CGST reported in 2022 (65) G.S.T.L. 159 (Del.);
(ii) Marg ERP Ltd vs Commissioner of Delhi Goods and Services Tax reported in (2023) 7 Centax 174 (Del.);
(iii) Ramani Suchit Malushte vs Unionof India reported in 2023-TIOL-81-HC-MUM-GST;
(iv) Prakash Krishnavtar Bhardwaj vs ITO reported in 2023 SCC OnLine Bom 59;
(v) SRK Enterprises vs Assistant Commissioner (ST) reported in (2023) 13 Centax 60 (A.P.).
4.3. Learned advocate Mr.Jeevan Vasave also referred to and relied upon the decision of the Hon’ble Kerala High Court in case of M/s. Fortune Service versus Union of India and Others in Writ Petition No.20656 of 2024 and other allied matters to submit that in the facts of the said case the Hon’ble Kerala High Court held that the copy of the order is required to be signed by the respondent before uploading or serving upon the petitioner. It was submitted that Hon’ble the Kerala High Court has relied upon the decision of the Hon’ble Talangana High Court in case of Silver Oak Villas LLP Versus Assistant Commissioner (ST), Begunpet Division Hyderabad reported in (2024) 17 Centax 442 (Telangana) to quash and set aside the orders which were not signed by the State Tax Officer.
4.4. It was therefore submitted that the impugned order cancelling the registration is liable to be quashed and set aside.
5.1. On the other hand, learned Assistant Government Pleader Ms.Shrunjal Shah for the respondent submitted that the show-cause notice dated 09.11.2022 was duly served upon the petitioner under Rule 21A of the GST Act for suspension and cancellation of the GST registration, however, the petitioner did not file any reply till 21.12.2022 and therefore, the order of cancellation was passed on the same date wherein, tax liability was determined on the basis of the outward tax liability declared in Form GSTR-1 amounting to Rs.64,340/-.
5.2. It was further pointed out that the petitioner has not filed any revocation application under Section 30 of the GST Act nor availed any benefit of the Notification No.3 of 2023 dated 31st March, 2023 where extension was granted till 30th June, 2023 to file an application for revocation upon payment of tax in terms of the returns along with interest, penalty and late fees.
5.3. It was further pointed out that the petitioner has failed to prefer an Appeal within stipulated time of three months from the date of the communication of the order under Section 107 of the GST Act and the Appeal was filed after delay of ten months without there being any sufficient cause to condone the delay in addition to the fact that the Appellate Authority has no power to condone the delay beyond the prescribed time limit.
5.4. It was further submitted that with regard to the contention raised on behalf of the petitioner about the unsigned order is concerned, reliance was placed on Rule 26 of the GST Rules which provides for method of authentication and Sub-rule (3) of Rule 26 of the GST Rules provides that Certificates and Orders under provision of the chapter shall be issued electronically by proper Officer or any other Officer authorised to issue such notices or certificates or orders. It was submitted that in the facts of the case, both the show-cause notice and the order of cancellation have valid reference number. Reliance was placed on the advisory dated 25.09.2024 issued on notices/orders without digital signatures of the issuing authorities to contend that such documents being computer generated on the command of the Officer, the same would not require physical signature of the Officer as such documents can be issued by the Officer only after logging into common portal using digital signature. It was therefore submitted that the impugned notice and the order cannot be said to be unsigned as contended by the petitioner.
5.5. It was further submitted that unique reference number which is generated itself symbolises that the document is verified on the GSTN portal. Reference was made to the screen shot of both the show-cause notice and the order of cancellation to demonstrate the unique reference number which was generated while uploading the same on the portal.
5.6. It was further submitted that both the impugned notice and the order were digitally signed by DS Goods and Service Tax Network along with the date and time and therefore, the same is a valid document.
5.7. Learned Assistant Government Pleader Ms.Shrunjal Shah further submitted that when the uploaded document is opened in the updated Adobe Reader, instead of “?” and stating “Signature Not Verified”, there is a “green tick mark” which further says “Validity Unknown Signature Valid” and therefore, it cannot be said that the notice and the order were not signed. It was therefore submitted that merely because there is a technical issue when the date and time of the digital signature is mentioned and when it is clarified by the CBDT that reference number can be verified, the impugned notice and order are legal and valid and the contention of the petitioner is liable to be rejected.
6. Having heard the learned advocates for the respective parties and considering the facts of the case, it appears that the contention raised on behalf of the petitioner that the impugned notice and the order are unsigned does not merit any acceptance in view of the fact that the same were uploaded on the GSTN Portal which can be done only after the verification by the concerned State Tax Officer through its portal after logging into the portal using the digital signature.
7. Advisory dated 25th September, 2024 issued by the CBDT in this connection which is relied upon by the respondent reads as under :
“Doubts have been created regarding the validity of documents issued by the tax officers on the common portal viz. Show cause Notices, Order of Assessment, Refund Orders etc. which are not containing the Digital signatures on the pdf. document downloaded from the common portal. In this context, it is to be mentioned that such documents (i.e. SCN/Orders) are generated on the common portal from the login of the officer, who logs in through Digital Signatures. Further, these documents being computer generated on the command of the officer, may not require physical signatures of the officer as these documents can be issued by the officer only after logging into the common portal using Digital Signature. Thus, all these documents in JSON format containing the order details along with the issuing officer details are stored in the GST system with the digital signature of the issuing officer. The validity of the document in question vis-a-vis who and for what purpose these documents have been issued can also be verified by the taxpayer pre-login as well as after login from the GST common portal by navigating to the following path:
Post-login:www.gst.gov.in–>Dashboard–>Services->User Services–> Verify RFN”
8. Considering the above advisory as well as the details submitted by the learned Assistant Government Pleader, the contention of the petitioner that the notice and the order are unsigned is not tenable.
9. With regard to the contention of the petitioner that due to the financial difficulty, the Appeal could not be filed within the time period by the petitioner is also not acceptable.
10. It appears that the petitioner has filed this application for revocation of the order of cancellation of registration along with the affidavit before the Appellate Authority instead of before the State Tax Officer.
11. Considering the fact that the petitioner is a proprietor and being a lady, if one more chance is given to the petitioner to file appropriate application for revocation of registration, the interest of justice would be met.
12. In that view of the matter, the petitioner is permitted to make an application for revocation of the cancellation of registration before the respondent-State Tax Officer within a period of two weeks from today along with all the requisite documents including the returns which were required to be filed from 01.04.2022 till date and the proof of amount of tax, interest and penalty deposited by the petitioner. The respondent-State Tax Officer, upon receipt of such application, shall decide the same to revoke the cancellation the registration in accordance with law within a period of four weeks from the date of receipt of such application.
13. With the aforesaid directions, without entering into the merits of the matter, the petition is disposed of with no orders as to cost.
