Later DRC-01 Date Alone Cannot Make GST SCN Time-Barred: Delhi High Court

The Delhi High Court has held that a delay in generating Form GST DRC-01, an electronic summary of a GST show-cause notice, does not by itself make the underlying notice time-barred if the substantive notice was issued within the prescribed period.

The Division Bench of Justices Anil Khetarpal and Bharat Parashar was dealing with two petitions filed by a proprietorship concern challenging proceedings under Section 74 of the Central Goods and Services Tax (CGST) Act, 2017.

The principal issue before the Court was whether the dates appearing on Forms GST DRC-01 and DRC-07 would determine limitation under Sections 74(2) and 74(10) of the Act.

In the first case, the substantive SCN was dated July 11, 2024, while Form GST DRC-01 bore the date August 23, 2024. In the second case, the substantive SCN was dated July 9, 2024, whereas DRC-01 was dated August 28, 2024.

Petitioner argued that the DRC-01 forms, having been issued after August 4, 2024, rendered the proceedings time-barred under Section 74(2).

Rejecting this contention however, the Court observed that Section 74(2) requires the proper officer to issue the notice under Section 74(1) within the prescribed period. The requirement, therefore, relates to the substantive SCN and not the electronic summary in Form DRC-01.

"The electronic summary in Form GST DRC-01 is consequential to the substantive SCN and cannot be treated as substituting the substantive SCN itself," the Court held.

It also referred to Rule 142 of the CGST Rules, which provides for electronic service of a summary of the notice in Form GST DRC-01.

The Court similarly rejected Petitioner's challenge based on the date of Form GST DRC-07.

In the second petition, the substantive order was dated January 29, 2025, while DRC-07 was dated February 21, 2025. Petitioner claimed that the adjudication order was beyond the limitation period under Section 74(10), which it asserted expired on February 4, 2025.

The Court noted that the substantive orders in the two proceedings were dated January 27 and January 29, 2025, both before the asserted limitation date.

Relying on its earlier decisions in Rishi Enterprises v. Additional Commissioner, Central Tax, Delhi North and Suresh Kumar v. Commissioner, CGST Delhi North, the Court held that DRC-07 is merely a summary of the adjudication order.

"The statutory limitation under Section 74(10) attaches to the substantive adjudication order contemplated under Section 74(9). Form GST DRC-07 is the electronic summary of such order," it said.

For Petitioner: Advocates Akhil Krishan Maggu, Vikas Sareen, Oshin Maggu, Aryan Nagpal, Harish Pal & Palak Sarna

For Respondents: Kushagra Kumar, SPC with Anmol Ghai,for R-1 UOI Ruchesh Sinha, Sr. Standing Counsel with Upasna Vashistha, Advs.Anurag Ojha, SSC alongwith  Dipak Raj & Aditya Chaudhary,