Fact of the Case: M/s. Shree Vinayak Industries received a show cause notice in Form GST DRC-01 dated 08.01.2021 demanding tax, interest and penalty. The notice was uploaded on the GST portal under the “Additional Notice and Orders” tab without separate intimation to the taxpayer. Consequently, the petitioner claimed that it remained unaware of the notice and could not submit a reply. Subsequently, an adjudication order dated 10.02.2021 was passed against the petitioner. The petitioner became aware of the order only after changing its accountant.

Aggrieved by the adjudication order, the petitioner filed an appeal under Section 107 of the GST Act. However, the appellate authority dismissed the appeal solely on limitation without examining the merits. The petitioner approached the Calcutta High Court challenging the show cause notice, adjudication order and appellate order, contending that the proceedings violated the principles of natural justice and the prescribed statutory procedure.

Considering the peculiar facts and circumstances, the Court quashed the show cause notice dated 08.01.2021, adjudication order dated 10.02.2021 and appellate order. The adjudicating authority was directed to issue a fresh show cause notice within two weeks. The petitioner was granted two weeks thereafter to respond. The authority must provide an opportunity of hearing and pass a fresh reasoned order within twelve weeks from the judgment.

Fact of the Case: M/s Aparna Collection, a registered proprietorship concern, faced two proceedings under Section 74 of the CGST Act involving alleged wrongful availment of Input Tax Credit from non-existent suppliers without actual receipt of goods. The disputed ITC amounted to ₹23,06,264 and ₹2,68,320 respectively. The substantive Show Cause Notices were dated 11.07.2024 and 09.07.2024, whereas Forms GST DRC-01 were dated 23.08.2024 and 28.08.2024.

The petitioner approached the Delhi High Court contending that both notices were time-barred because DRC-01 was issued after the alleged limitation deadline of 04.08.2024. Additionally, DRC-07 dated 21.02.2025 was challenged because it was issued after the alleged adjudication deadline of 04.02.2025, although the substantive orders were dated 27.01.2025 and 29.01.2025. The petitioner also disputed the invocation of Section 74, arguing that fraud, wilful misstatement, suppression of facts and knowledge of suppliers’ alleged fraudulent activities had not been established. 

Held by court :.The Delhi High Court held that the substantive Show Cause Notice and Form GST DRC-01 are distinct documents under Rule 142 of the CGST Rules. Section 74(2) prescribes limitation for issuance of the substantive notice, not its electronic summary. Since both substantive notices were dated before 04.08.2024, the subsequent dates appearing on DRC-01 did not render the proceedings time-barred. Similarly, Section 74(10) applies to the substantive adjudication order, while DRC-07 merely represents its electronic summary. Therefore, the subsequent DRC-07 date did not invalidate the earlier adjudication orders.

The Court further held that allegations concerning fraud, wrongful ITC availment, supplier non-existence and absence of collusion required examination of evidence by the statutory Appellate Authority. Accordingly, both writ petitions were disposed of, with liberty to pursue appeals under Section 107. All substantive contentions were kept open, including any request for exclusion of time spent pursuing the writ proceedings.