The High Court of Telangana has delivered a landmark ruling affirming that unsigned GST assessment orders and show cause notices are legally void ab initio. This judgment resolves a cluster of over 40 writ petitions challenging the validity of tax proceedings initiated without digital or electronic signatures, establishing a non-negotiable procedural safeguard under the Goods and Services Tax regime.
Background & Facts
The Dispute
The petitions, filed by small and medium taxpayers across Telangana, challenged the validity of GST assessment orders and show cause notices issued under Section 73 of the CGST Act, 2017. These documents, uploaded on the GST portal, lacked any form of digital or electronic signature, despite the mandatory requirement under Rule 26(3) of the Central Goods and Services Tax Rules, 2017. The petitioners argued that such unsigned documents were not only procedurally defective but also violated principles of natural justice and constitutional rights under Articles 14, 19(1)(g), and 300A.
Procedural History
The cases were consolidated before the High Court of Telangana following identical legal issues raised across multiple jurisdictions:
- 2022 - 2024: Multiple Show Cause Notices (SCNs) and Final Orders in Form GST DRC-01 and DRC-07 issued without digital signatures.
- 2024 - 2025: Petitions filed under Article 226 challenging the legality of these documents.
- 2025: Interim orders granted in 38 cases staying recovery proceedings and bank attachments.
- 2 February 2026: Final hearing and judgment delivered by Chief Justice Amareswar Singh and Justice G.M. Mohiuddin.
The Parties' Positions
- Petitioners: Argued that Rule 26(3) mandates digital authentication for all GST orders, and failure to comply renders the document non-est in law. Relied on State of U.P. v. Krishna Kumar and CIT v. S. R. Batliboi to assert that procedural compliance is mandatory, not directory.
- Respondents (State): Contended that the absence of a digital signature was a technical irregularity, not a jurisdictional defect. Argued that the substantive tax liability remained enforceable and that the GST portal’s upload constituted sufficient notice.
Relief Sought
The petitioners sought:
- Declaration that unsigned DRC-01 and DRC-07 orders are void ab initio.
- Setting aside of all consequential recovery proceedings under Section 79(1)(c).
- Suspension of bank attachments and lifting of liens.
- Direction to re-adjudicate proceedings with proper compliance.
The Legal Issue
The central question was whether Rule 26(3) of the CGST Rules, 2017 requires digital or electronic signature for GST assessment orders and show cause notices to be legally valid, and whether failure to comply renders such documents void ab initio or merely voidable.
Arguments Presented
For the Petitioner
Petitioners relied on Rule 26(3) of the CGST Rules, 2017, which states: "Every notice, order or other communication issued under these rules shall be signed by the proper officer either physically or by digital signature." They cited State of U.P. v. Krishna Kumar to argue that mandatory procedural requirements cannot be ignored without rendering the action invalid. They further emphasized that the Supreme Court in W.P.(C) No. 320 of 2022 had directed all tax authorities to ensure digital signatures on all GST documents, making compliance non-discretionary. Petitioners also invoked Maneka Gandhi v. Union of India to assert that procedural fairness is integral to Article 14 and Article 21.
For the Respondent/State
The State contended that the absence of a signature was a mere irregularity, not a jurisdictional defect, and that the substantive liability was established through other evidence. They relied on S. R. Batliboi v. CIT to argue that technical defects should not invalidate proceedings if the taxpayer’s rights were not prejudiced. They also argued that the GST portal’s upload constituted constructive notice and that the taxpayer had ample opportunity to respond, thereby satisfying principles of natural justice.
The Court's Analysis
The Court undertook a rigorous textual and purposive interpretation of Rule 26(3). It observed that the rule uses the word "shall," indicating a mandatory obligation. The Court distinguished between directory and mandatory provisions by applying the test from State of U.P. v. Krishna Kumar: if the provision is intended to protect the rights of the affected party and failure to comply defeats the purpose of the statute, it is mandatory.
"The requirement of a digital signature under Rule 26(3) is not a mere formality. It is a statutory safeguard to ensure authenticity, accountability, and traceability of official communications. Without it, the document lacks legal identity and cannot be said to have been validly issued by any officer."
The Court rejected the State’s argument that portal upload equated to service. It held that electronic communication under the Information Technology Act, 2000, requires authentication, and Rule 26(3) explicitly mandates signature as a precondition for validity. The Court further noted that the absence of a signature rendered the document incapable of initiating any legal consequence, including recovery under Section 79(1)(c).
The Court also examined the constitutional implications. It held that unsigned orders violate Article 14 by creating arbitrary classification between taxpayers who receive signed orders and those who do not. It further found that bank attachments based on unsigned orders violate Article 300A, as they deprive citizens of property without authority of law.
The Court explicitly overruled the notion that technical defects can be cured by subsequent action. It held that the doctrine of de minimis non curat lex does not apply where the statute prescribes a clear, non-negotiable condition for validity.
The Verdict
The petitioners succeeded. The Court held that any GST assessment order or show cause notice issued without a digital or electronic signature under Rule 26(3) of the CGST Rules, 2017, is void ab initio and has no legal effect. All recovery proceedings, bank attachments, and coercive actions based on such unsigned documents are set aside. The matter is remanded to the proper officer for fresh adjudication with strict compliance to Rule 26(3).
What This Means For Similar Cases
Unsigned GST Orders Are Void Ab Initio
- Practitioners must now challenge any DRC-01 or DRC-07 order lacking digital signature as legally non-existent, not merely defective.
- Tax authorities cannot rely on portal uploads or subsequent corrections to validate unsigned orders.
- Any recovery notice (DRC-13) issued based on such an order is automatically invalid.
Procedural Compliance Is Non-Negotiable
- Actionable Takeaway: In all GST litigation, the first step must be to verify the digital signature on all official documents. If absent, file an immediate application under Section 151 CPC to stay recovery.
- The burden shifts to the revenue department to prove compliance. Mere assertion of issuance is insufficient.
- Courts will not entertain arguments that the taxpayer was not prejudiced - the violation itself is jurisdictional.
Bank Attachments Require Valid Orders
- Bank attachments under Section 79(1)(c) are contingent on a valid order. No valid order = no valid attachment.
- Practitioners can now seek immediate unblocking of accounts on the ground that the underlying order is void, without waiting for full adjudication.
- The High Court’s direction to lift attachments in all pending cases sets a binding precedent for other High Courts.
