Dhruv Medicos Pvt Ltd Vs Deputy Commissiner (Delhi High Court)
The Delhi High Court has intervened in a case involving Dhruv Medicos Pvt. Ltd. and the Deputy Commissioner of GST, highlighting a crucial interpretation of Rule 101(4) of the Central Goods and Service Tax Rules, 2017 (CGST Rules). The court emphasized that a GST audit cannot be finalized without due consideration of the taxpayer’s reply, even if the initial communication of discrepancies and the filing of a reply are framed as optional.
Dhruv Medicos Pvt. Ltd., a pharmaceutical distributor, underwent an onsite audit from March 20 to March 25, 2025. An Audit Memo was issued on March 28, 2025, received by the company on April 5, 2025. The company sought clarification on the memo’s basis and computations on April 11, 2025. Crucially, the CGST Department finalized and submitted its Audit Report on April 29, 2025, before providing the complete Audit Report to Dhruv Medicos on May 14, 2025. The company then submitted a detailed reply on June 19, 2025, but this was after the audit report had already been finalized. This sequence of events led to a Show Cause Notice being issued on June 27, 2025, which Dhruv Medicos challenged.
