GST Authorities Ignoring DRC-01A Replies, Payments & Judicial Precedents

The Karnataka Taxpayers Association has submitted a letter to the Finance Minister of India and other officials, highlighting several critical issues faced by taxpayers under the GST regime. The association points out that replies filed in Form DRC-01A are often not considered, with officials proceeding to issue show-cause notices as if no response was received. Furthermore, voluntary payments made through Form DRC-03 are frequently disregarded, leading to fresh demands and, in some cases, the attachment of bank accounts despite the dues being settled. The letter also addresses the non-consideration of judicial precedents cited by taxpayers in their replies, which forces them into unnecessary litigation and adds to the burden on the appellate system. The association appeals for corrective measures, urging the government to instruct tax officers to acknowledge and credit taxpayer replies and payments, respect legal precedents, and stop the practice of attaching bank accounts when liabilities have been discharged. The letter argues that these practices undermine the goals of transparency and trust intended by the GST system.

Subject: Non-consideration of replies filed in DRC-01A, disregard of judicial precedents, non-accounting of payments made through DRC-03, and attachment of taxpayers’ bank accounts despite payment.

 Respected Sir/Madam,

We, the members of Karnataka Taxpayers Association (R), a registered body representing the collective voice of taxpayers across the State of Karnataka, take this opportunity to submit before you an issue of grave concern that is repeatedly being faced under the GST regime. Our Association has always stood for genuine and voluntary compliance and has been working closely with professionals and trade bodies to encourage a transparent tax culture. However, the repeated hardships caused due to the following practices by the authorities are defeating the very spirit of GST.

It is an alarming reality that when taxpayers respond to Intimations issued in Form DRC-01A, their replies filed on the GST portal, often supported by additional submissions through email and registered post, are not being acknowledged or considered. In several cases, officers are still proceeding to issue Show Cause Notices in Form DRC-01 with the remark that “no reply has been filed by the taxpayer.” This practice directly undermines the purpose of Form DRC-01A, which was introduced to encourage voluntary settlement before resorting to litigation.

Equally distressing is the fact that even where taxpayers have made voluntary payments of tax, interest, or penalty through Form DRC-03 in response to such intimations, those payments are not being given due credit. Instead, fresh notices are issued and demands are raised as though no payment has been made, forcing taxpayers to once again prove what has already been discharged. To add to this injustice, in some cases, the bank accounts of taxpayers have been attached by officers despite the fact that dues were already settled through DRC-03. Such harsh measures against compliant taxpayers who have acted in good faith create an atmosphere of fear and harassment rather than trust and cooperation.

We must also highlight the repeated non-consideration of judicial pronouncements and precedents. Taxpayers, in their replies, cite binding decisions of the various Hon’ble High Courts, and even the Hon’ble Supreme Court. Yet, the orders that follow often ignore these judgments completely, without even a reference or reasoning. This disregard of judicial discipline places an undue burden on taxpayers to pursue unnecessary appeals, further choking the already overburdened appellate system.

The cumulative impact of these practices is that taxpayers who wish to comply are not being encouraged but instead are being discouraged. Their payments are not credited, their replies are not read, their case laws are not respected, and their bank accounts are attached even after compliance. This goes against the stated policy of the Government that GST is meant to be a good and simple tax, built on transparency and trust.

We, therefore, most humbly appeal to your good offices to take urgent corrective steps. Officers across GST formations must be instructed to acknowledge and consider replies filed in DRC-01A, to give proper credit to payments made through DRC-03, and to immediately refrain from attaching bank accounts where liabilities have already been discharged. At the same time, strict directions are required to ensure that judicial precedents are respected and discussed in orders. By doing so, not only will the taxpayers’ confidence in the system be restored, but the vision of GST as a transparent and fair regime will also be achieved in its true spirit.

We trust that this genuine grievance of taxpayers will be treated with the seriousness it deserves and that suitable instructions will be issued at the earliest to safeguard the interest of both taxpayers and the administration.

With respectful regards,

For Karnataka Taxpayers Association (Regd.)

 Zafarulla Sattar Khan
Founder- President

Date: 21-09-2025
Place: Shivamogga.