An Unsigned GST Assessment Order is Legally Invalid and Must Be Set Aside.

An Unsigned GST Assessment Order is Legally Invalid and Must Be Set Aside.

Issue

Is a GST adjudication order legally valid if the summary of the order in FORM GST DRC-07 is not signed by the assessing authority, and can such a defect be treated as a curable irregularity?

Facts

• The petitioner, a registered dealer, was served with an adjudication order imposing a penalty for the period spanning July 2017 to December 2021.
• The petitioner challenged the order, pointing out a fundamental defect: the summary of the order in FORM GST DRC-07 lacked the signature of the assessing authority.
• The appellate authority confirmed the order, but the petitioner filed a writ petition in the High Court.

Decision

• The High Court set aside both the assessment order and the appellate order.
• It held that the orders were legally unsustainable because the requirement of a signature is mandatory.
• The court relied on a binding Division Bench precedent (A V Bhanoji Row v. Assistant Commissioner), which had established that the absence of a signature is a fatal defect that cannot be cured by general saving provisions like Section 160 (which deals with minor procedural defects).
• The matter was remanded to the assessing authority to pass a fresh, duly signed order after following the proper procedure.

Key Takeaways

• Signature is a Non-Negotiable Requirement: A signature (digital or physical) is essential for the authentication and legal validity of a GST order. Its absence renders the order void.
• Fundamental Defect, Not a Clerical Error: The lack of a signature is not considered a minor, curable irregularity under Section 160. It is a fundamental flaw that goes to the root of the order’s validity.
• Procedural Adherence is Mandatory: Tax authorities are bound to follow the procedures laid down in the Act and Rules. A failure to adhere to a basic requirement like signing an order makes the entire proceeding invalid.

GST Order Invalidated for Failure to Issue Mandatory Pre-Notice Intimation.

Issue

Is a GST assessment order valid for a period prior to October 2020 if the authorities failed to issue the mandatory pre-Show Cause Notice (SCN) intimation as required under the unamended Rule 142(1A) of the CGST Rules?

Facts

• The petitioner was subjected to a penalty order for a period that included time before and after October 2020.
• For the portion of the demand pertaining to the period before October 2020, the petitioner argued that the entire proceeding was invalid because the department had admittedly not issued a pre-tax intimation notice before the main SCN.
• The appellate authority had confirmed the order.

Decision

• The High Court quashed both the assessment and the appellate orders.
• It relied on a previous judgment (New Morning Star Travels) which had held that the issuance of a pre-SCN intimation was a mandatory procedural requirement for the period before Rule 142(1A) was amended in October 2020.
• Since the department had breached this mandatory statutory procedure, the entire proceeding was held to be vitiated.
• The matter was remanded for a fresh order to be passed after issuing the necessary pre-intimation notice.

Key Takeaways

• Pre-SCN Intimation Was Mandatory: For proceedings pertaining to the period before October 15, 2020, the issuance of a pre-SCN intimation was not optional but a mandatory step.
• Violation Leads to Invalidity: The failure to follow this mandatory procedural step is not a curable defect and renders the entire assessment order invalid.
• Purpose of the Rule: The pre-intimation was designed to give the taxpayer an early opportunity to pay the tax and interest without the imposition of a penalty, a right that is lost if this step is skipped.