I have come across many instances wherein SCNs and adjudication orders under Section 73 or Section 74 are not signed by the adjudicating authorities. The place for signature is either kept blank or merely Sd/- is written. This article tries to collate ratios set by courts in respect of the validity of unsigned orders.
It is a fairly settled position of law that unsigned orders are a nullity and are non-est. Reference can be had to the following ratios
- Railsys Engineers Pvt Ltd vs Additional Commissioner of CGST 2022 (65) G.S.T.L. 159 (Del.) – It was held that SCN and orders are to be signed by the authority. It was also held that even if the SCN and orders were uploaded on the portal, DSC was required to be affixed.
- Marg ERP Ltd vs Commissioner of Delhi Goods and Services Tax (2023) 7 Centax 174 (Del.) – the High Court has held that an unsigned notice or order cannot be considered as an order.
- Ramani Suchit Malushte vs Union of India 2023-TIOL-81-HC-MUM-GST – Honourable High Court by referring to Rule 26(3) categorically held that without signature (DSC) the order will not have any effect in the eyes of law.
- Prakash Krishnavtar Bhardwaj vs ITO 2023 SCC OnLine Bom 59 – The High Court has held that notice without signature affixed on it (digitally or manually) is invalid and it would not vest the Assessing Officer with any further jurisdiction to proceed to reassess. While arriving at the this conclusion the Bombay High Court has referred to Madhya Pradesh High Court judgement in the case of Umashankar Mishra v. Commissioner of Income-tax (1982) 11 Taxman 75 wherein it was held that not affixing signature on a notice is not a mistake but a non-curable defect. The high court has also held such notice to be arbitrary and contrary to Article 14 of the Constitution of India.
- Sandur Manganese & Iron Ores Ltd vs Commissioner of Customs, Bangalore 2001 (133) ELT 635 (Tri. Bang) – Tribunal has held that notice issued without signatures but only with word SD/- cannot be considered as valid.
Given that the notices and orders are being served through portal, one can argue that DSC has been affixed while uploading the SCN or Order on the portal. However, in this regard, reference to Rule 142 can give a different insight. Relevant portions of which read as under
“Rule 142. Notice and order for demand of amounts payable under the Act. –
(1) The proper officer shall serve, along with the
(a) Notice issued under section 52 or section 73 or section 74 or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130, a summary thereof electronically in FORM GST DRC-01”
“(5) A summary of the order issued under section 52 or section 62 or section 63 or section 64 or section 73 or section 74 or section 75 or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130 shall be uploaded electronically in FORM GST DRC-07, specifying therein the amount of 6[tax, interest and penalty, as the case may be, payable by the person concerned.”
As can be seen, what is uploaded online using DSC is just a summary of SCN or summary of order. SCN and OIO are attached to those summaries. Honourable Jharkhand High Court in the case of Juhi Industries Pvt Ltd vs State of Jharkhand 2022 (64) G.S.T.L. 406 (Jhar.) has categorically held that DRC-01 is not a substitute for SCN. As such, the summary uploaded on portal using DSC are not substitutes for SCN or Order. SCN and Order have different existence than that of summary uploaded online. That being the case, merely using DSC while uploading the summary online will not validate the SCN or OIO as signing the summary cannot be equated with signing the SCN or Order.
In the case of SRK Enterprises vs Assistant Commissioner (ST) (2023) 13 Centax 60 (A.P.) honourable High Court of Andhra Pradesh considered the validity of unsigned order uploaded on GST Portal and it has held as below
“7. On consideration of the submissions advanced and the legal provisions, we are of the view that Section 160 of CGST Act 2017 is not attracted. An unsigned order cannot be covered under “any mistake, defect or omission therein” as used in Section 160. The said expression refers to any mistake, defect or omission in an order with respect to assessment, re-assessment; adjudication etc and which shall not be invalid or deemed to be invalid by such reason, if in substance and effect the assessment, re-assessment etc is in conformity with the requirements of the Act or any existing law. These would not cover omission to sign the order. 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.”
“9. In the case of A.V. Bhanoji Row v. Assistant Commissioner (ST) in W.P.No. 2830 of 2023 decided on 14-2-2023, upon which reliance has been placed by learned counsel for the petitioner (Ex.P6), a Co-ordinate Bench of this Court has held that the signatures cannot be dispensed with and the provisions of sections 160 and 169 of CGST Act would not come to the rescue.”
As can be seen, even when the order was uploaded on the portal (which could not have been done without DSC) the High Court has come to the conclusion that the order is not tenable and is not an order at all in the eyes of law. Even in the case of Railsys Engineers Pvt Ltd (supra) the court had come to a conclusion that the SCN and Order were not tenable even when uploaded on portal. Honourable High Court has gone ahead and held even Section 160 and Section 169 would not rescue such orders or SCNs.
One can wonder what is the prejudice caused to assessee if the demand is otherwise tenable. However, not signing the order or SCN goes to very core of the adjudication which must be done with utmost care since any adverse actions of adjudicating authorities have ill financial effects to assessee. If the adjudicating authorities are not even careful enough to sign an order or SCN, it can cast a strong doubt about the ‘care’ exercised in conducting the adjudication. This doubt can go against the very grains of principles of natural justice wherein adjudicating process cannot be conducted merely as an empty formality.
Given the above ratios by Courts of Law, assessee can contest the very validity of SCN or Order if the same is not signed.
Any contrary views or healthy discussions are welcome.
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