2025 (11) TMI 349 - HC - GST

Missing DIN in assessment orders not automatically void; Section 168 issues binding instructions, CBIC circulars are administrative guidance

Veera Mohana Krishna Engineering Works Versus Assistant Commissioner and Others

HC dismissed the writ petitions challenging assessment orders for absence of a Document Identification Number, holding that Section 168 only issues ... Challenge to assessment order - lack of a Document Identification Number on the orders passed by the assessing officers - HELD THAT:- The language in Section 168 of the CGST Act makes it abundantly clear that the power granted under this provision is only the power to issue instructions to the taxation authorities. Such instructions would be binding on the taxation authorities. Violation of such instructions may invalidate the orders passed by the taxation authorities. Such violation would not result in the orders becoming void. Once the orders are only invalid, they would remain in force until they are declared to be invalid by an appropriate Court or authority of appropriate jurisdiction. Therefore, the orders under challenge, would continue to be effective unless set aside by this Court. Once such a declaration is required from this Court, it would also be necessary for this Court to consider the question of laches in approaching this Court. The contention that the registered persons/dealers were unaware of the service of the impugned orders in the portal cannot be accepted as a ground for condoning delay - Once such a method of service has been included in the Act and Rules, the contention that such service is not sufficient service and did not give actual notice of service to the registered persons cannot be accepted. The contention that service of an order without a Document Identification Number would amount to no service, would be acceptable if there was such a stipulation or provision either in the Act or in the Rules. This stipulation is said to be available in the circulars issued by the CBIC. However, such circulars, are at best instructions to the taxation authorities and the petitioners, having received the orders in the portal cannot claim ignorance of these orders. The inordinate delay, in approaching this court, has not been satisfactorily explained and these petitions cannot be entertained at this length of time. It is declined to interfere with the impugned orders - Accordingly, all the Writ Petitions are dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether an assessment order under the GST regime that does not bear an electronically generated Document Identification Number (DIN) is a nullity/void ab initio or merely invalid and therefore remains effective until set aside by a competent court or authority. 2. The legal effect and binding nature of Circulars issued by the Central Board of Indirect Taxes and Customs (CBIC) under Section 168 of the CGST Act-specifically Circular Nos. 122/41/2019 and 128/47/2019-requiring DIN on all communications, and whether non-compliance with those Circulars automatically vitiates orders beyond judicial adjudication. 3. Whether delay/laches bars relief in writ petitions challenging assessment orders lacking DIN where challenges are instituted after a significant lapse of time, and whether service by upload on the GST portal amounts to effective service for limitation and laches purposes. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Void vs. Invalid: Legal framework Legal framework: Section 168(1) CGST Act empowers the Board to issue orders, instructions or directions for uniformity and mandates that such instructions be observed by tax officers. The CGST Act and Rules prescribe modes of service including upload on the GST portal. Appellate limitation under Section 107 (appeals) and general writ jurisdiction considerations govern promptness in seeking judicial relief. Issue 1 - Precedent Treatment Followed/considered: The Court considered prior High Court decisions (including a prior decision of this Court) holding absence of DIN invalidated assessment orders, and the Supreme Court's reference to CBIC Circulars in Pradeep Goyal (2022) which noted the Circulars' requirements. However, the present Court re-examined the legal consequence of non-compliance with instructions issued under Section 168. Issue 1 - Interpretation and reasoning The power conferred by Section 168 is to issue instructions binding on tax authorities; non-observance may render actions/decisions invalid for want of compliance. The Court reasons that an instruction's breach renders an order invalid (vitiated for non-compliance) but does not ipso facto convert it into a void order extinguished for all purposes. Invalidity is a judicial determination; until a court so declares, the order remains effective and enforceable. Therefore non-inclusion of DIN renders the order infirm and susceptible to challenge, but does not prevent the order from operating until set aside. Issue 1 - Ratio vs. Obiter Ratio: Non-compliance with CBIC instructions under Section 168 may render an assessment order invalid but does not make it void ab initio; such orders remain operative until set aside by competent adjudication. This principle is essential to the Court's disposal and is treated as binding ratio in these matters. Issue 1 - Conclusion The absence of a DIN produces invalidity but not automatic nullity; consequently, such orders continue to be effective unless and until declared invalid by the appropriate Court or authority. Issue 2 - Binding nature and legal effect of CBIC Circulars under Section 168 Legal framework: Section 168 empowers the Board to issue binding instructions to officers for uniform implementation; circulars are issued pursuant to that statutory power. Issue 2 - Precedent Treatment Considered: The Court acknowledged the CBIC Circulars' purpose (transparency and accountability) and their treatment by higher courts (notably the Supreme Court's reference to the Circulars). Prior High Court rulings which set aside orders lacking DIN were reviewed. Issue 2 - Interpretation and reasoning The Court holds that Circulars issued under Section 168 are binding on the taxation authorities and non-compliance can invalidate the administrative action taken. However, circulars do not themselves amend statutory provisions or rules and cannot convert administrative invalidity into a legal extinction of the order without judicial pronouncement. Petitioners cannot rely on the Circulars alone to assert that service never occurred or that statutory limitation periods are inapplicable. Issue 2 - Ratio vs. Obiter Ratio: Circulars under Section 168 bind authorities and breach may invalidate orders; but circulars do not obviate the judicial role in declaring invalidity and do not automatically negate statutory mechanisms such as service rules or limitation periods. This is a binding conclusion for the matters adjudicated. Issue 2 - Conclusion CBIC Circulars mandating DIN are binding instructions; non-compliance renders the relevant order vulnerable to challenge, but does not by itself annul the order's legal effect absent judicial setting aside. Issue 3 - Laches, delay and adequacy of portal service Legal framework: Principles of laches and prompt judicial challenge apply where administrative orders continue to operate until invalidated. The statutory/regulatory regime includes electronic service (portal upload) as an authorized method of communication and service. Issue 3 - Precedent Treatment Considered: The Court reviewed prior instances where absence of DIN led to orders being set aside. It distinguished those circumstances from the present factual matrix where petitioners delayed and advanced explanations such as illiteracy, reliance on accountants, or non-receipt of physical notices despite portal upload. Issue 3 - Interpretation and reasoning The Court rejected generalized claims of non-receipt based on portal upload, observing that statutory/regulatory provisions expressly provide for service by the portal; acceptance of such pleas would permit challenges to long-standing orders and undermine the statutory service regime. The Court further held that the alleged lack of DIN does not make portal service legally ineffective absent statutory or rule provision to that effect; circulars cannot be used by recipients to avoid the consequence of delay. Given the inordinate delays and unsatisfactory explanations, the Court found laches applicable and exercised its discretion to refuse relief. Issue 3 - Ratio vs. Obiter Ratio: Delay in seeking relief against orders that remain effective until set aside will attract judicial scrutiny for laches; service effected by prescribed portal mechanisms is sufficient for limitation and laches considerations unless statute/rule provides otherwise. This is necessary to the Court's decision and forms part of the ratio. Issue 3 - Conclusion Petitions filed after significant unexplained delay are barred by laches; reliance on portal-based service as non-service is rejected where the statutory/regulatory scheme contemplates electronic service. Consequently, relief is refused in the present petitions for delay. Outcome The Court dismissed the writ petitions, holding that absence of DIN renders assessment orders invalid but not void ab initio; such orders remain effective until judicially set aside, and the petitioners' inordinate and inadequately explained delay in seeking relief justified refusal of interference on the ground of laches. No costs were awarded and miscellaneous petitions, if any, were closed.