HC Holds GST Demand Notices Without Signatures Valid
The court held that notices issued through the digitally authenticated system in accordance with the GST law and the prescribed technology were valid.
Hyderabad:The Telangana High Court on Wednesday held that GST demand notices generated through the authorised GST portal cannot be invalidated merely because they do not bear the signatures of the authorities concerned.
A full bench comprising Chief Justice Aparesh Kumar Singh, Justice N. Tukaramji and Justice G.M. Mohiuddin pronounced the verdict on a batch of more than 500 petitions challenging the validity of GST notices and demand orders on the ground that they did not bear the signatures of the issuing officers.
The court held that notices issued through the digitally authenticated system in accordance with the GST law and the prescribed technology were valid. The ruling has financial implications, with pending GST demands involved in the batch estimated at more than Rs 1,500 crore, according to official estimates.
The court directed the petitioners concerned to comply with the outstanding demands within the stipulated period. It, however, made it clear that assessees having objections to the notices or assessment orders could pursue statutory appellate and other legal remedies available under the GST law.
The full bench was constituted after earlier petitions on the issue had resulted in directions for issuance of fresh notices bearing signatures. With similar challenges continuing to be filed, the Bench headed by the Chief Justice considered the larger question of the validity of GST communications generated through the portal.
During the proceedings, GST officials appeared before the High Court on September 18 last year and gave a live demonstration, lasting more than one-and-a-half hours, on the functioning of the GST portal. They demonstrated how authorised officers accessed the system and issued notices and orders through computers using digital keys.
The state government contended that every jurisdictional officer was required to log into the GST portal using a digital key containing the officer's digital signature. It submitted that the Telangana technical service department provided the digital keys embedded with the digital signature of the officer concerned.
The state government argued that the absence of a visible signature on a downloaded notice did not mean that it had been issued without authentication. It said technical issues or non-upgradation of software on the computer or device used by a taxpayer could result in the digital signature not being displayed, though the officer's name and designation would continue to appear on the notice.
The government also relied on clarifications from the Goods and Services Tax Network (GSTN), which had confirmed that show-cause notices and orders were generated on the common portal only after the officer logged in using a digital signature. The state government contended that, as the documents were computer-generated through the authenticated login of the officer, a separate physical signature was not necessary for their validity.
The petitioners, however, argued that the GST provisions and prescribed DRC forms required notices and orders to carry the signature of the authorised officer. They contended that the absence of a signature rendered the proceedings invalid. The Full Bench rejected the challenge based on the absence of signatures and upheld the validity of notices generated through the digitally authenticated GST portal.