Tax Vista

Your weekly tax recap

Edn. 291 - 24th August 2026

Kasi Viswanathan V

RFN is No Substitute for Signature

The validity of GST notices and orders lacking physical or digital signature has been a recurring area of litigation. While on the strength of the advisory, the Revenue has been contending that presence of a system-generated Reference Number (RFN) is sufficient indication that a document is digitally signed, questions have continued to arise regarding the scope of Rule 26(3) of the CGST Rules. The Rajasthan High Court recently had occasion to examine whether an RFN by itself can satisfy the requirement of Rule 26(3).

The Court held that "issuance" and "authentication" under Rule 26(3) are two distinct requirements. Mere generation of a document on the GST portal satisfies only the requirement of issuance, whereas authentication requires a digital signature, e-signature or other prescribed mode of verification. According to the Court, authentication serves three purposes: establishing authenticity of the document (and assures that it is not the product of a mechanical process untouched by human agency), fixing accountability and acting as a safeguard against arbitrariness.

Rejecting the Revenue's contention that the RFN itself confers authenticity, the Court observed that an RFN merely tracks and catalogues a document within the system and cannot substitute the statutory requirement of authentication. The Court further held that the absence of signature is a defect going to the root of the proceedings and not a curable irregularity. It also found that upload of documents under the "Additional Notices and Orders" tab and the resulting miscommunication regarding personal hearing led to violation of Section 75(4). Accordingly, the show cause notice and the consequent order was set aside with liberty to the department to proceed afresh.

The decision may have to be examined in the light of the GSTN advisory dated 25.09.2024 which states that notices and orders can be issued by officers only after logging into the common portal using a Digital Signature Certificate (DSC). The advisory further states that such documents, along with issuing officer details and digital signatures, are stored in the GST system in JSON format. Accordingly, the advisory appears to an extent address some of the concerns identified by the Court.

However, the controversy may not be finally settled. The Gujarat High Court in Radhe Enterprises [2025-VIL-623-GUJ] and the Andhra Pradesh High Court in Sahiti Agencies [2025-VIL-1008-AP] proceeded on the footing that the presence of an RFN is sufficient indication that the document is digitally signed. These decisions do not appear to have been brought to the notice of the Rajasthan High Court and were therefore not examined. Similarly, the GSTN advisory also does not find reference in the judgment. As discussed in Tax Vista Edition No. 256 while covering the aforesaid decisions, the real issue is whether login through DSC on the common portal automatically results in authentication of the documents generated by the system or requires a separate act of authentication. It may also be noted that the aspect relating to consolidated notices considered by the Andhra Pradesh High Court is presently under challenge before the Supreme Court.

The Rajasthan High Court has interpreted the expression that notices and orders shall be issued electronically by the proper officer through digital signature as indicating separate requirements of issuance and authentication. Given the number of disputes arising on this issue, greater clarity may be required on the distinct stages involved in making, generation, authentication, issuance and communication (service) of notices and orders, each of which has independently become the subject matter of litigation in different contexts. A clarification from the Board on these stages and guidelines on the same to both trade and field formation could help avoid further litigation.

While the controversy relating to documents uploaded under the "Additional Notices and Orders" tab has been addressed through changes made in the common portal, another issue continues to remain open. As discussed in Tax Vista Edition No. 287 while analysing 2026-VIL-732-P&H, questions continue to be raised as to whether the common portal has been properly notified for the purpose of communication and service of notices and orders under the GST law. The present decision does not deal with that aspect and the issue may continue to engage courts in future cases. [Re: 2026-VIL-899-RAJ]

Section 74: Not at the Drop of a Hat

The decision arises from an interesting procedural backdrop. The adjudicating authority had dropped the demand proposed under Section 74 on the ground that requisite elements for invocation of the same were not established. It was the department which carried the matter in appeal and succeeded before the first appellate authority. The Tribunal was therefore examining whether the appellate authority was justified in reversing the findings recorded by the adjudicating authority.

The Tribunal notes that the dispute arose from statutory return data, GSTR-2A figures and GSTR-9C reconciliation records. More importantly, invoice-wise reconciliation explaining the alleged difference had already been uploaded as part of the GSTR-9C filings and was available on the GST portal. The adjudicating authority had also recorded an in principle finding that ineligible / blocked credits stood reversed on self-assessment basis. Tribunal found that these findings of adjudication authority had not been displaced by the appellate authority. It further held that the new ground raised at the appellate stage, namely that failure to respond to audit enquiries and the final audit report amounted to suppression, could not sustain invocation of Section 74. In a rare occasion, Tribunal expressly appreciated the approach adopted adjudicating authority and set aside the appellate order.

While the proposition that mere availment of ineligible ITC, without anything more, cannot amount to suppression of facts for invoking Section 74 is certainly welcome, the factual context in which the Tribunal arrived at this conclusion deserves equal attention. It is important to note that the Tribunal was dealing with a case where the underlying data stood disclosed through statutory filings and where the adjudicating authority had already recorded findings that fraud, wilful misstatement and suppression were absent. Once these factual bridges were crossed, the Tribunal was able to hold that mere availment of ineligible self-assessed credit would not amount to suppression. If the decision is to be relied upon as a precedent, the first step would be demonstrating a similar factual foundation regarding disclosure before seeking the benefit of the ratio laid down therein.

Another aspect which may merit attention is the adjudicating authority's finding that once the notice issued under Section 74 fails, the demand itself could not survive since the notice did not leave open any option for determination under Section 73. The approach adopted by the adjudicating authority is aligned with the view that where the foundation for invoking Section 74 itself fails, the proceedings cannot thereafter be sustained by converting the same into one under Section 73. [Re: 2026-VIL-61-GSTAT-TVP]

[Read previous edition dated 24.08.2026]

(The views expressed are personal. The author can be reached for feedback or queries on v.k.vishwa@gmail.com)