Facts of the Case: In this case, the petitioner challenged the impugned order was unsigned, rendering it invalid. The department, however, contended that the order was duly authenticated through the DRC-07 summary, which contained the name, designation, and credentials of the adjudicating officer. It was further submitted that since June 2024, the GST portal system mandates that every uploaded order carries electronic authentication, ruling out any irregularity.
The petitioner had also filed a rectification application under Section 161 of the CGST Act, which was rejected on 26 December 2024 without granting a personal hearing. The petitioner additionally submitted that it was under insolvency proceedings and operating under lender surveillance through a trust and retention account, leaving it administratively constrained to comply with GST procedures during the relevant period.
Issue: Whether an unsigned order-in-original is invalid when accompanied by a DRC-07 form bearing the adjudicating officer’s credentials. Whether a rectification order passed without granting a personal hearing violates the third proviso to Section 161 of the CGST Act, 2017, embodying the principles of natural justice.
Held that: The Court observed that the order-in-original, though not manually signed, was accompanied by the DRC-07 summary containing the name, designation, and credentials of the adjudicating officer. Such electronic authentication, as per the GSTN mechanism, constitutes valid authentication. Therefore, the argument that the order was invalid due to absence of a signature was rejected.
However, the Court found merit in the petitioner’s contention regarding the rectification order. The Court noted that the rectification order dated 26 December 2024 had been passed without granting any personal hearing to the petitioner.
The Court referred to the third proviso to Section 161 of the CGST Act, 2017, which explicitly provides that “no rectification which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the taxpayer shall be made unless the taxpayer has been given a reasonable opportunity of being heard.”
Reliance placed upon its own earlier judgment in HVR Solar Pvt. Ltd. v. Sales Tax Officer, which held that even in rectification proceedings, a personal hearing is mandatory before passing an adverse order.
Accordingly, the Court set aside the rectification order passed by the department for violation of the principles of natural justice.
Case Name: Future Consumer Limited Versus Union Of India And Ors. dated 10.10.2025
