2019 (12) TMI 1049 - HC - GST

High Court allows Official Liquidator to use digital signatures & purchase mobile phones for GST compliance

The High Court of Gujarat, in a judgment delivered by Honourable Mr. Justice A. J. Desai, granted permission to the Official Liquidator to obtain digital ... GST registration - Digital signature for GST registration - Use of office-owned mobile numbers for official digital records - Authority of the Official Liquidator to incur expenses from the account of the company in liquidation - Obligation of purchaser to pay statutory dues including GSTDigital signature for GST registration - Authority of the Official Liquidator to incur expenses from the account of the company in liquidation - Permission to obtain digital signatures of officers of the Official Liquidator and to meet the expenses from the company-in-liquidation's account. - HELD THAT: - The Court accepted the Official Liquidator's report that furnishing digital signatures of authorised persons is mandatory for obtaining a GST registration and that the Office of the Official Liquidator requires such digital signatures to comply with statutory requirements under the Goods and Services Tax regime. The Court noted that the Official Liquidator is a Central Government office whose officers are periodically transferred, and that obtaining digital signatures in the name of authorised officers is necessary to complete GST formalities for the company in liquidation and for other companies in liquidation administered by the office. Having considered the report and the practical necessity of digital signatures for statutory compliance and for safeguarding the exchequer's interests, the Court permitted the Official Liquidator to obtain the required digital signatures and to incur the expenses for the same from the account of the company in liquidation maintained by the Office of the Official Liquidator. [Paras 6, 7]Report accepted; Official Liquidator permitted to obtain digital signatures and to incur related expenses from the company's liquidation account.Use of office-owned mobile numbers for official digital records - Authority of the Official Liquidator to incur expenses from the account of the company in liquidation - Permission to purchase three mobile phones with SIM cards in the name of the Office of the Official Liquidator and to meet the expenses from the company-in-liquidation's account. - HELD THAT: - The Court accepted the Official Liquidator's rationale that, to ensure transparency and preservation of digital records, it is preferable for the Office to have mobile numbers and devices registered in its name rather than use personal numbers of officers who may be transferred. The Court observed that mobile numbers and devices will assist in obtaining GST registration and in filing other statutory returns for companies in liquidation. On this basis, and in view of the need to maintain transparent and tamper-proof digital records, the Court authorised the purchase of three mobile phones with SIM cards in the name of the Office of the Official Liquidator and permitted payment from the company's liquidation account. [Paras 6, 7]Report accepted; Official Liquidator authorised to purchase three office mobile phones with SIM cards and to incur the necessary expenses from the company's liquidation account.Final Conclusion: The Official Liquidator's report is accepted; the Court permits the Official Liquidator to (a) obtain digital signatures of authorised officers and (b) purchase three mobile phones with SIM cards in the name of the Office of the Official Liquidator, with the costs to be met from the account of the company in liquidation. Issues:1. Permission to obtain digital signatures for acquiring GST No. of the company in liquidation.2. Permission to purchase mobile phones and SIM cards for maintaining transparency and digital records.Analysis:Issue 1: Permission for Digital Signatures and GST No.:The Official Liquidator sought permission to obtain digital signatures to complete the procedures of acquiring GST No. for the company in liquidation. The Court noted that the assets of the company had been confirmed for sale, with the purchaser liable to pay GST on the assets. Upon receiving a demand for GST No. from the purchaser, the Official Liquidator engaged an empaneled Chartered Accountant to address the matter. The Chartered Accountant confirmed the requirement for a separate GST Registration No. for the company in liquidation. It was established that obtaining digital signatures and providing necessary details for GST registration were essential under the CGST Act, 2017. The Court accepted the Official Liquidator's request, emphasizing the importance of compliance with statutory provisions and the need for digital signatures for authorized personnel.Issue 2: Purchase of Mobile Phones and SIM Cards:Additionally, the Official Liquidator requested permission to purchase three mobile phones with SIM cards in the office's name to maintain transparency and digital records effectively. The advocate highlighted that the office's personnel might be transferred, necessitating separate mobile phones for official use. It was argued that maintaining separate mobile numbers and devices under the office's name would prevent manipulation of digital records related to the company in liquidation. The Court, considering the necessity of digital records maintenance and transparency, approved the request for purchasing mobile phones and SIM cards for official use. This decision aimed to ensure the integrity of records and facilitate statutory compliance for companies in liquidation.In conclusion, the High Court of Gujarat, in a judgment delivered by Honourable Mr. Justice A. J. Desai, granted permission to the Official Liquidator to obtain digital signatures for GST registration and purchase mobile phones with SIM cards for official use. The judgment emphasized the importance of statutory compliance, digital record maintenance, and transparency in handling the affairs of companies in liquidation.