M/S. Anuhar Homes PVT. LTD vs. Assistant Commissioner (GST)

Facts

The petitioners, M/s Bigleap Technologies and Solutions Pvt Ltd. and Mr. Aravinda Kumar Koturu, challenged various notices and orders issued by tax authorities under the GST regime. The primary contention was that these documents, including summary notices of show cause (DRC-01) and summary of orders (DRC-07), were not physically or digitally signed by the issuing officers. The petitioner in WP No. 21101 of 2024 sought to declare notices and orders totaling approximately Rs. 73.79 Crores as void ab initio. The petitioner in WP No. 5763 of 2024 challenged an order levying tax, interest, and penalty totaling Rs. 72,48,066/- for the tax period 2017-18, alleging it was passed without proper notice, hearing, and was barred by limitation. Both petitions sought interim relief to stay recovery proceedings.

Held

The High Court held that the summary notices of show cause (DRC-01) and summary of orders (DRC-07), which were neither physically nor digitally signed by the concerned officers, are void ab initio and lack legal sanctity. The Court reasoned that the mandate of the law, as reflected in the relevant provisions of the CGST/SGST Acts and Rules, requires such statutory notices and orders to be signed to establish their authenticity and the authority of the issuing officer. The Court found that the non-compliance with this mandatory requirement renders the entire proceedings initiated based on these unsigned documents invalid. Furthermore, the Court observed that the principles of natural justice were violated as the petitioners were not afforded a proper opportunity to be heard, and in some cases, notices were not served as per the Act. The Court found that the revenue's contention of substantial compliance or portal-based communication was insufficient to overcome the statutory requirement of a signature. Consequently, the Court quashed the impugned notices and orders, directing the respondents to initiate fresh proceedings in accordance with the law, if permissible.

Key Issues

1. Whether summary notices of show cause (DRC-01) and summary of orders (DRC-07) issued under the GST Act, which are neither physically nor digitally signed, are legally valid and binding on the petitioner? (Section 73, Section 74 of CGST/SGST Act, 2017). 2. Whether proceedings initiated and orders passed without proper service of notice and without providing an opportunity of being heard to the petitioner are arbitrary, illegal, and violative of principles of natural justice? (Section 73, Section 74 of CGST/SGST Act, 2017). Petitioner's arguments: The petitioners argued that the non-signing of the notices and orders renders them invalid and void ab initio, as it violates mandatory procedural requirements under the GST laws. They contended that the authorities failed to follow the prescribed procedures, including proper service of notices and providing an adequate opportunity to be heard, leading to arbitrary and illegal demands. They relied on the principle that statutory provisions must be strictly followed. Revenue's arguments: The respondents (State of Telangana and its tax authorities) argued that the issuance of DRC-01 and DRC-07 through the GST portal, even if not physically or digitally signed, constitutes valid communication. They contended that the portal itself serves as a platform for official communication and that the petitioners had knowledge of the proceedings. They may have argued that substantial compliance was achieved, and the lack of signature was a technical defect not affecting the merits of the case.