South East Asia Company Through Its Prop. Ishank Gupta Vs Superintendent (Delhi High Court)
The petitioner filed a writ petition under Articles 226 and 227 challenging an Order-in-Original and Form DRC-07, both dated 3 February 2025, under which GST demands were raised. The petitioner argued that the proceedings were defective on two grounds: first, that separate Forms DRC-07 were not issued for different financial years; and second, that invocation of Section 74 of the CGST Act was improper because the Show Cause Notice dated 26 July 2025 was based solely on GSTR-3B, GSTR-9, and the balance sheet, all of which were already available on the GST portal.
The respondent, represented by the Senior Standing Counsel, disputed these contentions. It was submitted that the impugned order contained separate audit findings for each financial year across audit paragraph numbers 1 to 7, and that Form DRC-07 merely consolidated those amounts into a single figure corresponding to the single impugned order. It was further argued that whether Section 74 had been correctly invoked was an issue to be raised in appeal.
The Court examined Form DRC-07, which reflected a total demand of Rs. 40,82,014 including interest and penalty. The Court also reviewed the impugned order, noting that the audit findings were clearly itemized. These included short payment of tax due to reconciliation discrepancies (Rs. 17,44,603); excess availment of Input Tax Credit for FY 2019-20 and 2020-21 (Rs. 36,125); non-payment of tax on other income (Rs. 10,636); interest on late filing of GSTR-3B (Rs. 5,686); non-payment of interest on supplier payments beyond 180 days (Rs. 1,00,098); reversal of ITC relating to blocked credit for FY 2018-19 (Rs. 1,75,226); and non-payment of tax on profit from sale of fixed assets (Rs. 21,524, Rs. 1,05,784, and Rs. 19,88,114). The Court held that these amounts were clearly identifiable in the order despite spanning multiple financial years.
