System-generated GST Cancellation SCN without Officer's Name/Office held invalid

System-generated GST Cancellation SCN without Officer’s Name/Office held invalid

Issue

Whether a Show Cause Notice (SCN) for cancellation of GST registration is valid if it is purely “system generated” and fails to mention the name, designation, or office of the issuing authority, and whether a cancellation order based on such a defective notice can be sustained.

Facts

The Notice: The petitioner received a Show Cause Notice proposing the cancellation of GST registration due to non-filing of returns for six continuous months. The registration was suspended from the date of the notice.
The Defect: The SCN stated it was “system generated” and advised the taxpayer to “contact jurisdiction office,” but it did not bear the name, digital signature, or office address of the issuing authority.
The Defense: The Revenue (Respondents) argued, based on GSTN instructions, that digital signatures are not necessary because the authority logs into the system securely to issue the notice.
The Challenge: The petitioner filed a writ petition arguing that an anonymous notice is invalid as the power to cancel lies with a specific officer, not a computer system.

Decision

Jurisdiction requires Identification: The High Court held that while digital signatures might be dispensed with if the officer is identified, a notice that lacks the name and office of the issuing authority is fundamentally defective.
Power resides in Officer, not System: The Court emphasized that the power to initiate cancellation proceedings under Section 29 is vested in the “Proper Officer,” not in the automated system itself. A “system-generated” notice without an identifiable human authority acts dehors (outside) the Act and Rules.
Invalid Foundation: Since the SCN itself was invalid due to total anonymity, the subsequent cancellation order based on that SCN could not stand.
Ruling: Both the Show Cause Notice and the Cancellation Order were quashed. The writ petition was allowed in favour of the assessee.

Key Takeaways

Anonymity is Fatal: A legal notice must identify who is issuing it. If you receive a GST notice (Form GST REG-17 or DRC-01) that looks purely automated and doesn’t mention which officer (e.g., “ACIT Circle 4” or “STO Ward 1”) issued it, it can be challenged in court as being without jurisdiction.

Section 160 Limit: While Section 160 saves proceedings from “technical defects,” the total absence of the issuing authority’s identity is a substantive jurisdictional defect that cannot be cured.

HIGH COURT OF ALLAHABAD

M Y Ent Bhatta

State of U.P.^*

Arun Bhansali, CJ.
and Kshitij Shailendra, J.

WRIT TAX No. 546 of 2025

MAY 13, 2025

Aditya Pandey for the Petitioner. S.C. Ankur Agarwal for the Respondent.

ORDER

1. This petition has been filed aggrieved of the order dated 05.01.2024 (Annexure-1) whereby the GST registration of the petitioner has been cancelled.

2. Submissions have been made that the petitioner was issued a show cause notice dated 14.11.2023 for cancellation of registration on account of failure to furnish return for a continuous period of six months and the registration of the petitioner was suspended w.e.f. 14.11.2023.

3. It is submitted that the notice issued inter alia indicates ‘Jurisdictional Officer System Generated Notice, Contact Jurisdiction Office for further process’.

4. It is emphasized that issuance of the notice itself was contrary to law as the authority vests in officers and not in the system and, therefore, the consequential order cancelling the registration of the petitioner deserves to be quashed and set aside.

5. By order dated 08.04.2025, respondents were directed to obtain instructions in the matter. Instructions have been obtained along with the explanation given by GSTN inter alia indicating ‘Advisory on issuance of Notices/Orders without digital signatures of the issuing authorities’. The indications made therein are that as the authority logs in by way of digital signature, it is not necessary that the orders which are passed should bear the digital signatures.

6. The advisory sought to be relied on by the respondents in the present case is misplaced, the same may be a valid explanation in case where the name and office of the issuing authority is indicated, however, the same does not bear the digital signatures.

7. In the present case, the notice, as quoted herein before, does not bear either the name or the office of the issuing authority and what has been indicated is that the same is system generated. As the power lies with the officers and not with the system, the issuance of notice which is system generated and does not bear the name/office, cannot be justified based on the explanation sought to be produced.

8. Consequently, as the notice issued itself is dehors the Act and the Rules, the same cannot be sustained. The writ petition is allowed. The notice dated 14.11.2023 and order dated 05.01.2024, Annexures-2 &1 respectively, are quashed and set aside.

9. Respondents would be free to issue a fresh notice in case the occasion arises, in accordance with law.