Demand Order containing details of official and Department is valid, even in absence of signature
The Delhi High Court in Future Consumer Ltd. v. Union of India held that a demand order is valid even without the adjudicating officer’s signature if it is accompanied by Form GST DRC-07 containing the officer’s name, designation, ward, and other identifying details. The petitioner had challenged an unsigned Order-in-Original and the rejection of its rectification application, which had been decided without a personal hearing. The Court observed that the GST portal mechanism requires officers to upload orders with signatures and credentials, making irregularities unlikely. It ruled that objections based solely on the missing signature are untenable when Form GST DRC-07 provides complete officer details. However, the Court found that personal hearing is mandatory under the third proviso to Section 161 of the CGST Act before rejecting a rectification application, relying on its earlier ruling in HVR Solar. As the rectification order violated natural justice, the petitioner was permitted to file an appeal against the OIO, which must be decided on merits and not dismissed as time-barred.
Facts:
M/s Future Consumer Ltd. (“the Petitioner”) received the Order-in-Original (“OIO”) dated August 24, 2024, by which a demand was raised. Since, this OIO did not contain the signature of the official passing it, the petitioner filed a rectification application against the said OIO, which was also rejected by the Adjudicating Authority through the Rectification Order that too without providing any opportunity for a personal hearing to the petitioner.
Aggrieved, the petitioner approached the Hon’ble Delhi High Court through this writ petition and sought to set aside the OIO. The petitioner submitted that the OIO does not contain the signature of the official passing the OIO.
Whereas, the Respondent pointed out that the OIO was accompanied by the Form GST DRC-07 which contains the name and designation of the concerned officer. The Respondent additionally submitted that the mechanism that has been set up in the Goods and Services Tax (“GST”) portal is that every Officer who is uploading an order has to upload their signature along with their credentials, thus there was no possibility of any irregularities.
Issues:
- Whether the demand order containing the name, designation and other details of the adjudicating officer, but not the signature of the officer, is valid?
- Whether any rectification order can be passed without an opportunity of personal hearing?
Held:
The Hon’ble Delhi High Court in W.P.(C) No. 15611 OF 2025 held as under:
- Noted that, once an OIO is accompanied by a Form GST DRC-07 which duly contains the name, the designation, the ward, and other details of the official; the objection by the petitioner is not be tenable. Hence, the contention of the Petitioner was rejected.
- Observed that, the personal hearing is mandatory in terms of the third proviso of Section 161 of the Central Goods and Service Tax Act, 2017 (“the CGST Act”), before passing rectification order.
- Relied on, the Hon’ble Delhi High Court judgment in the case of HVR Solar Private Limited v. Sales Tax Officer Class-II AVATO Ward 67 & Anr. [W.P. (C) 4506/2025 dated April 8, 2025] wherein it was held that “the principles of natural justice had been inbuilt by way of the 3rd Proviso to Section 161 of the CGST Act. If pursuant to a Rectification Application, if a rectification is made and if it adversely affects the assessee, Proviso 3 contemplates an opportunity of hearing to be given. However, when an Rectification Application is made at the instance of assessee and the rectification is being sought to be rejected without considering the reasons for rectification or by giving reasons as to why such rectification could not be entertained. It is also imperative that the assessee to be put on notice.”
- Noted that, since the OIO is an appealable Order, hence, in view of the infraction of the principles of natural justice in deciding the rectification order, the petitioner is permitted to appeal against the OIO along with the requisite pre-deposit.
- Held that, if the petitioner files the appeal within the stipulated time period, the same shall be decided on merits and shall not be dismissed on ground of limitation.
Our Comments:
In a distinguishing judgment, the Hon’ble Telangana High Court in [Silver Oak Villas LLP v. Asstt. Commissioner WP (C) No.6671/2024 dated March 14, 2024] held that since the SCN and the demand order were unsigned, it lost its efficacy in the light of Rule 26 (3) of the Central Goods and Services Tax Rules 2017 (“the CGST Rules”) read with the Telangana Goods and Services Tax Act, 2017 and the Rules framed therein. Hence, the Hon’ble Telangana High Court quashed the demand order.
Also, the Hon’ble Guwahati High Court in [Naser Ali Mondal vs. State of Assam, WP(C) No. 4157 of 2025 dated July 31, 2025] held that an SCN in form GST DRC-01 passed without affixing the digital signature and without providing details of a personal hearing is void under Rule 26(3) of the CGST Rules and Section 73(3) of the CGST Act and hence, liable to be set aside.
Relevant provisions:
Section 161 of the CGST Act: Rectification of errors apparent on the face of record-
Provided that no such rectification shall be done after a period of six months from the date of issue of such decision or order or notice or certificate or any other document:
Provided further that the said period of six months shall not apply in such cases where the rectification is purely in the nature of correction of a clerical or arithmetical error, arising from any accidental slip or omission:
Provided also that where such rectification adversely affects any person, the principles of natural justice shall be followed by the authority carrying out such rectification.
*****
(Author can be reached at info@a2ztaxcorp.com)
Author Bio
