2025 (6) TMI 1666 - HC - GST

Levy of penalty u/r 26 of the Central/State Goods and Services Tax Rules 2017 - documents were duly signed as required under the relevant GST rules or not - unsigned order - respondent did not provide material sought for by the petitioner and therefore the petitioner could not respond to the SCN - HELD THAT - There is nothing on record to suggest that the impugned show cause notices or orders have not been signed either digitally or physically as is otherwise required under Rule 26 of the Rules and therefore the same cannot be said to be unsigned document as the orders and show cause notices are duly uploaded on the GST Portal. It is also pertinent to note that the learned advocate for the petitioner has failed to make out any case for remand on the ground of unsigned order because if we come to the conclusion that the order is unsigned the same would be liable to be quashed and set aside whereas in the facts of the case the petitioner is not able to demonstrate that the impugned orders are not electronically signed. Without there being any digital signature no order can be uploaded as per Advisory dated 25.09.2024. Even otherwise the petitioner has remained totally negligent for the business carried out by the petitioner during the period 2017-2018 and 2018-2019 in the State of Gujarat. It is also required to be noted that though the petitioner has submitted that registration of the petitioner is cancelled on 28.02.2019 no material is placed on record to demonstrate such fact. It appears that in facts of each of the respective cases it was found that the order was not signed either digitally or physically as required under Rule 26 of the Rules. However in the facts of the present case the impugned orders are uploaded on the GSTN Portal and without signatures the orders cannot be uploaded. Therefore the contention raised on behalf of the petitioner that the impugned orders are unsigned is not acceptable as there is nothing on record to show that unsigned orders are uploaded on the Portal. Considering the facts of the case it appears that the petitioner has remained negligent after cancellation of registration in the year 2019 and has not even bothered as to what happened to the returns filed by the petitioner as it is admitted by the petitioner that he has shifted to Hyderabad on closure of business in Gujarat and is having the registration under the GST Act in States of Andhra Pradesh and Telangana. Thus the petitioner is now raising technical grounds so as to challenge the impugned orders by making alternative submissions which cannot be accepted in facts of the present case. Petition dismissed.

Summary

The core legal questions considered by the Court in this matter include:

1. Whether the impugned show cause notices and orders issued under the GST Act for the financial years 2017-2018 and 2018-2019 are valid and legally enforceable, particularly focusing on whether these documents were duly signed as required under the relevant GST rules.

2. Whether the petitioner's challenge on the ground of the orders being unsigned, and therefore nullity, is tenable in light of the procedural and substantive provisions of the GST Act and Rules.

3. Whether the petitioner's plea for condonation of delay in filing appeals against the impugned orders is justified given the circumstances of the case.

4. Whether the principles of natural justice were violated by the respondent authority by not providing the petitioner with requisite material and information to effectively respond to the show cause notices.

5. Whether the petitioner's claim regarding inability to access the GST portal after cancellation of registration and consequent ignorance of the orders and notices is a valid ground for relief.

Issue-wise Detailed Analysis:

1. Validity and Authentication of Impugned Orders and Notices

The relevant legal framework here is Rule 26(3) of the Central/State Goods and Services Tax Rules, 2017, which mandates that all notices, certificates, and orders under the GST provisions must be issued electronically by the proper officer through digital signature certificate, e-signature, or any other mode of signature or verification as notified by the Board.

The petitioner contended that the impugned orders and show cause notices were unsigned and thus nullities, relying heavily on various High Court decisions from Telangana, Andhra Pradesh, Delhi, and Bombay High Courts, which held that unsigned orders lack efficacy and must be quashed. The petitioner emphasized that mere uploading on the GST portal does not cure the defect of lack of signature.

The respondent countered that the impugned orders and notices bear the name of the issuing officer, are uploaded on the GST portal, and cannot be uploaded without digital signature authentication. Reference was made to an advisory dated 25.09.2024 by the CBDT, which clarified that documents generated on the GST common portal through the login of officers using digital signatures are valid even if the downloaded PDF does not display a visible digital signature. The respondent also relied on a recent decision of this Court in a similar matter where it was held that uploading on the GST portal after digital signature login constitutes valid authentication.

The Court examined the submissions and the relevant Rule 26(3), noting that there is no material on record to suggest that the impugned notices or orders were not signed digitally or physically as required. The Court relied on the precedent from the Vishwa Enterprise case, which held that documents uploaded on the GST portal after officer login via digital signature are deemed authenticated and valid. The Court distinguished the petitioner's reliance on other decisions by noting that those cases involved clear absence of any signature or digital authentication, whereas in the present case, the orders were uploaded on the GST portal, which itself requires digital signature login.

Consequently, the Court concluded that the impugned orders and notices cannot be considered unsigned or nullities.

2. Principles of Natural Justice and Provision of Material

The petitioner argued that the respondent failed to provide the material sought by the petitioner, including outward supply details necessary for reconciliation, thereby violating principles of natural justice and prejudicing the petitioner's ability to respond to the show cause notices.

The petitioner also submitted that since the GST registration was cancelled in 2019, the petitioner was unable to access the GST portal and was unaware of the notices and orders until much later, which hampered effective participation in the proceedings.

The respondent denied these contentions, stating the petitioner did not place any material on record to substantiate the claim of cancellation or inability to access the portal. The Court observed that the petitioner failed to produce documentary evidence of cancellation of registration or proof of communication regarding the notices and orders.

The Court noted that the petitioner's ignorance and alleged inability to access the portal amounted to negligence, especially since the petitioner admitted to shifting business operations to other states and appointing consultants to handle GST matters. The Court found no sufficient ground to hold that principles of natural justice were violated to an extent warranting interference.

3. Delay in Filing Appeal and Condonation of Delay

The petitioner contended that the delay in filing appeals against the impugned orders should be condoned due to the reasons stated above, including lack of awareness of the orders and cancellation of registration.

The petitioner submitted that the delay for the financial year 2017-2018 was approximately eight months and twenty-three days, and for 2018-2019 about five months and twenty-two days, beyond the statutory three-month period for filing appeals under Section 107 of the GST Act.

The Court noted that the petitioner had filed a Special Civil Application earlier which was withdrawn and now sought relief under Article 227. However, the Court found that the petitioner's negligence and failure to diligently monitor the GST portal or maintain proper records did not justify condonation of delay. The Court also observed that the petitioner's submissions were technical in nature and an attempt to circumvent statutory timelines.

Accordingly, the Court declined to condone the delay.

4. Effect of Cancellation of Registration and Business Closure

The petitioner asserted that cancellation of GST registration on 28.02.2019 and closure of business operations in Gujarat prevented access to GST portal and awareness of the impugned orders.

The Court noted that no documentary evidence was placed on record to prove cancellation of registration or closure of business in Gujarat. The petitioner's reliance on verbal or unsubstantiated claims was insufficient. Moreover, the petitioner continued to hold GST registrations in other states and appointed professionals to handle GST matters, which undermined the claim of ignorance or inability to act.

The Court found that these factors did not excuse the petitioner's failure to respond or file timely appeals.

5. Treatment of Competing Arguments and Precedents

The petitioner relied on multiple judgments from various High Courts holding that unsigned orders are nullities and cannot be acted upon, including cases where remand was ordered for fresh adjudication after proper signing.

The respondent and the Court distinguished these precedents by emphasizing the technological and procedural context of GST portal operations. The Court highlighted that the GST system's digital authentication process differs from traditional modes of signing, and the advisory from CBDT clarified that documents generated through officer login with digital signature are valid even if the downloaded document does not visibly display a signature.

The Court also noted that the petitioner failed to demonstrate any absence of digital signature or authentication on the GST portal, which is a precondition for uploading orders and notices.

The Court rejected the petitioner's submissions that the absence of a visible digital signature or "green tick mark" on the downloaded order invalidated the order, stating that the technical format (JSON) containing the digital signature is not accessible to taxpayers and that the validation mechanism is through the GST portal verification process.

Conclusions:

The Court concluded that the impugned show cause notices and orders were duly authenticated and validly issued under Rule 26(3) of the CGST Rules. The petitioner's challenge on the ground of unsigned orders was rejected as unsustainable in the facts of the case.

The Court found no violation of principles of natural justice as the petitioner failed to establish denial of material or opportunity to respond.

The petitioner's claim of inability to access the GST portal due to cancellation of registration and business closure was not supported by evidence and did not justify relief.

The Court declined to condone the delay in filing appeals, viewing the petitioner's conduct as negligent and technical in nature.

Accordingly, the petition was dismissed summarily for lack of merit.

Significant Holdings:

"There is nothing on record to suggest that the impugned show cause notices or orders have not been signed either digitally or physically as is otherwise required under Rule 26 of the Rules and therefore, the same cannot be said to be unsigned document as the orders and show cause notices are duly uploaded on the GST Portal."

"The contention raised on behalf of the petitioner that the impugned orders are unsigned is not tenable 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."

"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 petitioner's ignorance and alleged inability to access the portal amounted to negligence, especially since the petitioner admitted to shifting business operations to other states and appointing consultants to handle GST matters."

"The petitioner's contention for condonation of delay in filing appeal cannot be accepted as the petitioner has remained negligent for his business transactions carried out for the period under consideration."

"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 not cure the defect which goes to the very root of the matter i.e. validity of the order." (Distinguished on facts)

"In the facts of the present case, the impugned orders are uploaded and it is not in dispute that without signing the orders, same cannot be uploaded and therefore, the petitioner has failed to make out a case for remand."