Calcutta HC upholds validity of GST adjudication order digitally signed within limitation, despite subsequent portal upload

 This Tax Alert summarizes a recent ruling of the Calcutta High Court (HC) ^[1] on whether an adjudication order under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act), which was digitally signed within the prescribed limitation period but uploaded on the common portal thereafter, can be treated as validly issued order, enforceable in law.

The key observations of the HC are:

• An order under Section 73 of the CGST Act involves three distinct stages viz., making, issuance and communication of the order; each serving a separate legal function.
• While issuance of an order marks completion of the adjudicatory function within the prescribed limitation period, service relates to communication of the order in the manner prescribed under Section 169.
• The CGST Act consciously uses the expression “issue” in sub-sections (2), (9) and (10) of Section 73, whereas the word “service” is used in relation to service of show cause notice (SCN) under sub-section (1). Accordingly, issuance and service cannot be treated as interchangeable for the purpose of limitation.
• Since the CGST Act does not prescribe any limitation period for service of an adjudication order, an order issued within the prescribed limitation period cannot be held invalid merely because it was served or uploaded thereafter.

Accordingly, HC held that an order digitally signed within the prescribed limitation period cannot be treated as time barred merely because the same was uploaded on the common portal thereafter.

Comments:

• This ruling is significant as it draws a distinction between issuance and service of an adjudication order under GST. It may have a wider impact in cases where adjudication orders are digitally signed close to the limitation deadline but are uploaded or communicated to taxpayers thereafter.
• While the HC has held that actual service or communication need not occur within the limitation period where the statute requires only issuance, it remains debatable whether mere digital signing is sufficient for fulfilling the criteria of issuance.
• It is also relevant to note that the limitation period for filing an appeal under Section 107 of the CGST Act is reckoned from the date of communication of the order, and not from the date of issuance of such order.