The Delhi High Court ruled on the case between M/s Aparna Collection and the Union of India concerning GST proceedings. M/s Aparna Collection was accused of wrongly availing Input Tax Credit (ITC) through non-existent suppliers. The petitioner argued that the proceedings were time-barred due to the dates on Forms GST DRC-01 and DRC-07, claiming these were issued after the statutory deadlines. They also challenged the invocation of Section 74 due to a lack of evidence of fraud or misstatement.
Read more: Delhi High Court - Issue of fake ITC - Court declined to entertain the writ petition against the GST demand, directing the petitioner to pursue the statutory appellate remedy [Order attached]
The issue was whether the dates on Forms GST DRC-01 and DRC-07 could render the proceedings time-barred, rather than the dates of the substantive Show Cause Notices (SCNs) and adjudication orders. The Court held that Form GST DRC-01 is merely an electronic summary of the SCN under Rule 142 of the CGST Rules, 2017, and the limitation period should be based on the date of the SCN. Since the SCNs were issued before the deadline, the proceedings were not time-barred.
Similarly, for Form GST DRC-07, the Court noted that it is a summary of the adjudication order under Rule 142(5). The adjudication orders were issued within the prescribed five-year period, making them valid. The Court also stated that issues regarding fraud and ITC admissibility should be examined by the Appellate Authority under Section 107 of the CGST Act.
Since the petitioner participated in the proceedings and no denial of hearing was evident, the Court declined to use its writ jurisdiction under Article 226, allowing the petitioner to challenge the orders before the Appellate Authority.
Order Date - 05 October 2026
Parties: M/s Aparna Collection Vs Union of India & Ors.
Facts -
- M/s Aparna Collection, a proprietorship concern registered under the CGST Act, challenged GST proceedings initiated against it for allegedly availing and passing on inadmissible Input Tax Credit (ITC) through non-existent suppliers and invoices issued without actual supply of goods.
- In the first case, the Department alleged wrongful availment of ITC amounting to ₹23,06,264. The substantive SCN was dated 11.07.2024, whereas Form GST DRC-01 was dated 23.08.2024. The adjudicating authority subsequently confirmed the demand through an Order-in-Original dated 27.01.2025.
- In the second case, the Department proposed a demand of ₹2,68,320 for alleged wrongful availment of ITC. The substantive SCN was dated 09.07.2024, while Form GST DRC-01 was dated 28.08.2024. The Order-in-Original was passed on 29.01.2025, followed by Form GST DRC-07 dated 21.02.2025.
- The Petitioner contended that the proceedings were barred by limitation since the DRC-01 forms were issued after 04.08.2024 and, in the second case, DRC-07 was issued after 04.02.2025. It also challenged the invocation of Section 74, alleging absence of evidence of fraud, wilful misstatement or suppression of facts
Issue -
- Whether the subsequent dates appearing on Forms GST DRC-01 and DRC-07, instead of the dates of the substantive SCNs and adjudication orders, could render proceedings time-barred?
Order -
- The Court held that Form GST DRC-01 is merely an electronic summary of the substantive SCN under Rule 142 of the CGST Rules, 2017. Therefore, the limitation under Section 74(2) must be examined with reference to the date of the substantive SCN and not merely the date appearing on DRC-01. Since both SCNs were dated before 04.08.2024, the proceedings could not be treated as time-barred.
- Similarly, the Court observed that Section 74(10) requires the substantive adjudication order to be issued within the prescribed five-year period. Form GST DRC-07 is only an electronic summary of the adjudication order under Rule 142(5), and its subsequent uploading does not automatically make the order time-barred. Both Orders-in-Original were dated before 04.02.2025.
- The Court further held that the allegations concerning the absence of fraud, wilful misstatement or suppression, the Petitioner's knowledge of suppliers' alleged fraudulent activities and the admissibility of ITC involved examination of facts and evidence. These issues were appropriately examinable by the statutory Appellate Authority under Section 107 of the CGST Act.
- Since the Petitioner had participated in the adjudication proceedings and no denial of opportunity of hearing was established, the Court declined to exercise its extraordinary writ jurisdiction under Article 226. It disposed of the writ petitions while granting liberty to the Petitioner to challenge the orders before the Appellate Authority, leaving all contentions open.
