Telangana HC Permits GST Appeal Despite Alleged Defect in Unsigned DRC-07

SBC Chem Corporation Vs Superintendent of Central Tax (Telangana High Court)

Telangana High Court Permits GST Appeal Despite Alleged Defect in Unsigned DRC-07 Analysis of M/s. SBC Chem Corporation v. Superintendent of Central Tax & Ors., W.P. No.14857 of 2026

The Telangana High Court in M/s. SBC Chem Corporation v. Superintendent of Central Tax & Ors., W.P. No.14857 of 2026, decided on 04.05.2026, dealt with an increasingly recurring issue under GST adjudication proceedings — whether unsigned summaries uploaded in Forms GST DRC-01 and DRC-07 can be challenged as invalid and non-est in law.

While the Court did not adjudicate upon the legality of unsigned GST forms, it granted liberty to the petitioner to pursue the statutory appellate remedy and directed the appellate authority to consider the delay sympathetically in light of the pendency of the writ proceedings.

Background of the Dispute

The petitioner challenged:

• Show Cause Notice dated 27.05.2024;
• Summary of Notice in Form GST DRC-01 dated 14.06.2024;
• Order-in-Original dated 28.08.2024; and
• Summary of Order in Form GST DRC-07 dated 30.08.2024,

all issued under Section 73 of the CGST/SGST Act for the tax period 2019-20.

The principal grievance raised before the High Court was that:

• the Summary of Notice and Summary of Order uploaded on the GST portal did not contain either:
  • physical signature, or
  • digital signature;
• therefore, the proceedings were illegal, arbitrary and non-est in law.

Petitioner’s Contention

The petitioner specifically argued that:

• absence of digital signature in Form GST DRC-07 rendered the proceedings defective;
• and because of such defect, the petitioner was unable to effectively file an appeal before the appellate authority.

The challenge was therefore founded on procedural illegality and non-compliance with statutory requirements relating to authentication of GST orders and notices.

Revenue’s Stand

The Revenue contended that:

• the petitioner had an effective alternate remedy of appeal;
• all grounds relating to legality, validity and procedural defects could be raised before the appellate authority itself.

Findings of the High Court

After hearing the parties, the Division Bench comprising Hon’ble Sri Justice P. Sam Koshy and Hon’ble Sri Justice Narsing Rao Nandikonda refrained from examining the merits of the controversy.

Instead, the Court recorded the petitioner’s request for liberty to avail the appellate remedy and disposed of the writ petition with the following directions:

• if appeal is filed within two weeks;
• along with statutory pre-deposit and delay condonation application;
• the appellate authority shall consider the delay sympathetically;
• while taking into account that the petitioner was bona fide pursuing remedy before the High Court.

The Court further clarified that:

• all legal and factual grounds remain open;
• and if delay is condoned, the appeal shall be decided on merits.

Important Legal Significance

1. High Court Reiterates Preference for Statutory Remedy

The judgment continues the consistent approach adopted by Telangana High Court in GST matters:

• where appellate remedy exists,
• writ jurisdiction is generally not exercised,
• unless there is patent lack of jurisdiction or gross violation of natural justice.

Even where procedural defects are alleged, courts are increasingly directing assessees to pursue statutory appeals.

2. Issue of Unsigned DRC-07 Left Open

Importantly, the Court did not decide:

• whether unsigned DRC-07 is void,
• whether absence of digital signature invalidates proceedings,
• or whether such orders are unenforceable.

Accordingly, the legal issue remains open and may arise for authoritative determination in future litigation.

3. Procedural Defects Can Still Be Raised Before Appellate Authority

The Court expressly permitted the petitioner to raise:

• all grounds in law,
• procedural objections,
• and factual disputes,

before the appellate authority.

This indicates that defects relating to authentication, digital signatures and portal irregularities can still constitute valid appellate grounds.

Broader GST Litigation Trend

This order aligns with a broader trend seen in recent Telangana GST writ cases where the High Court:

• avoids entering into merits where alternate remedies exist;
• protects assessees from limitation consequences;
• and balances procedural fairness with statutory discipline.

Rather than quashing proceedings outright, the Court often:

• preserves appellate rights,
• permits delay condonation,
• and directs authorities to decide matters on merits.

Practical Implications for Taxpayers

Taxpayers encountering unsigned or improperly authenticated GST orders should consider the following:

Verify Authentication Requirements

Check whether:

• the order bears digital signature;
• authentication complies with Rule 26 and related GST provisions;
• and the downloadable portal copy matches statutory requirements.

File Appeals Without Delay

Even where procedural defects exist, assessees should avoid prolonged inaction and preferably:

• file appeal within limitation or with condonation application;
• while simultaneously raising procedural invalidity grounds.

Preserve Technical Evidence

Maintain:

• screenshots,
• downloaded portal copies,
• metadata where available,
• and evidence showing absence of digital authentication.

These may become relevant in appellate or writ proceedings.

Conclusion

The Telangana High Court in M/s. SBC Chem Corporation once again emphasized the primacy of statutory appellate remedies in GST disputes. While the Court did not adjudicate the legality of unsigned GST DRC forms, it protected the petitioner’s right to appeal and directed sympathetic consideration of delay caused by pendency of the writ petition.

The decision is significant because it leaves open an important procedural issue under GST law — whether unsigned DRC-01 and DRC-07 forms can sustain adjudication proceedings — a question that may receive fuller judicial examination in future cases.

FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT

The instant Writ Petition has been filed by the petitioner under Article 226 of the Constitution of India praying the Court for issuance of a Writ of Mandamus to declare the action of respondent No.1 in issuing / passing the show-cause Notice vide DIN : 20240556YP05009959A2, dated 27.05.2024, accompanied by Summary of Notice in form GST DRC-01, vide Ref.No.ZD3606240356011, dated 14.06.2024 and Order-in-Original No.20240189-SGRRG-SUPT, dated 28.08.2024, accompanied by Summary of Order in Form GST DRC-07, vide Ref.No.ZD360824137174B, dated 30.08.2024, issued under Section 73 of CGST / SGST Act, for the tax period 2019-20, particularly Summary of Notice / Order in Form GST DRC-01 and DRC-07, uploaded in GST portal without affixing signature either physical or digital as illegal, arbitrary, non-est in the eye of law, violative of principles of natural justice, and contrary to the provisions of the CGST / SGST Act, 2017; and consequently, to set aside the same.

2. Heard Mr. Kohir Bhaskar Reddy, learned counsel for the petitioner; and Mr. N. Bhujanga Rao, learned Deputy Solicitor General of India, for respondent No.2; and Mr. Dominic Fernandes, learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs (CBIC), for respondent Nos.1 and 3.

3. Learned counsel for the petitioner submitted that in the absence of digital signature in the Summary of Order in Form GST DRC-07, dated 30.08.2024, an appeal cannot be filed by the petitioner; and therefore, contended that this Court may interfere in the impugned proceedings.

4. However, after arguing for some time, learned counsel for the petitioner sought liberty to the petitioner to prefer an appeal against the impugned Order-in-Original, dated 28.08.2024, and contended that though some delay would have occurred in approaching the Appellate Authority, the said Appellate Authority may be directed to consider the delay sympathetically.

5. On the other hand, learned Senior Standing Counsel for the CBIC submitted that petitioner is at liberty to prefer an appeal against the Order-in-Original, dated 28.08.2024 and also Summary of Order in Form GST DRC-07, dated 30.08.2024, by raising all grounds available in law and on facts before the Appellate Authority in respect of subject tax period.

6. Upon hearing both sides and having regard to the aforesaid facts and circumstances of the case, since the petitioner seeks liberty to prefer an appeal before the Appellate Authority, this Court is not inclined to make any comment on the merits of the contentions raised by both parties.

7. If the petitioner herein prefers an appeal within a period of two weeks with statutory pre-deposit along with a delay condonation application, the learned Appellate Authority would consider the same in accordance with law by taking into consideration that the petitioner had been pursuing the writ remedy before this Court in the meantime as well. Further, the petitioner herein would be at liberty to take / raise all grounds in law and on facts before the Appellate Authority. If the Appellate Authority comes to the conclusion that delay occurred in preferring appeal by the petitioner herein before the Appellate Authority is satisfactory, the Appellate Authority shall proceed with the appeal and decide the same on merits.

8. With these observations, the Writ Petition stands disposed of with the aforesaid liberty. No costs.

9. As a sequel, miscellaneous applications pending if any, shall stand closed.