Telangana HC Permits GST Appeal Against Unsigned DRC-01 & DRC-07

Indus Ecowater Vs Superintendent of Central Tax (Telangana High Court)

Telangana High Court Permits GST Appeal Against Unsigned DRC-01 and DRC-07 Proceedings While Leaving Merits Open

The Telangana High Court granted liberty to the taxpayer to file a statutory appeal against an Order-in-Original passed under the CGST Act after the petitioner challenged the validity of unsigned Form GST DRC-01 and Form GST DRC-07 proceedings. Without examining the merits of the dispute, the Court directed that if the appeal is filed within two weeks along with the statutory pre-deposit and a delay condonation application, the appellate authority shall consider the matter in accordance with law.

Introduction

In M/s. Indus Ecowater v. Superintendent of Central Tax & Another, the Telangana High Court considered a writ petition challenging GST adjudication proceedings on the ground that the statutory forms initiating and concluding the proceedings were unsigned.

Instead of deciding the legality of the impugned proceedings, the Court allowed the petitioner to avail the statutory appellate remedy and directed the appellate authority to consider the appeal in accordance with law.

Facts of the Case

The petitioner challenged:

• Show Cause Notice dated 25.11.2024.
• Form GST DRC-01 dated 27.11.2024.
• Order-in-Original dated 24.02.2025.
• Summary of the order in Form GST DRC-07 dated 25.02.2025.
• The dispute related to the tax period April 2020 to March 2021.

The petitioner contended that:

• Form GST DRC-01 did not contain the required signatures.
• The summary order in Form GST DRC-07 was also unsigned.
• Therefore, the impugned proceedings were null and void.

Petitioner’s Contentions

The petitioner argued that:

• The GST proceedings suffered from procedural defects as the statutory forms lacked signatures.
• During the hearing, the petitioner sought permission to pursue the statutory appellate remedy.
• The petitioner also requested that any delay in filing the appeal be considered sympathetically.

Revenue’s Stand

The CBIC submitted that:

• The petitioner had an effective statutory remedy of appeal.
• All legal and factual grounds, including objections regarding unsigned GST forms, could be raised before the appellate authority.

Court’s Observations

The High Court observed that:

• Since the petitioner intended to pursue the statutory appellate remedy, it was unnecessary for the Court to examine the merits of the challenge.
• The petitioner should be permitted to file an appeal raising all available factual and legal grounds.
• The appellate authority should independently consider the delay condonation request and decide the appeal in accordance with law.

Final Judgment

The Telangana High Court:

• Granted liberty to the petitioner to file a statutory appeal within two weeks.
• Directed the petitioner to file the appeal along with the statutory pre-deposit and a delay condonation application.
• Permitted the petitioner to raise all legal and factual grounds before the appellate authority.
• Directed the appellate authority to consider the question of delay and, if satisfied, decide the appeal on merits in accordance with law.
• Disposed of the writ petition without expressing any opinion on the merits.

Author’s Analysis

1. Procedural objections can be raised in appeal

Even allegations relating to unsigned statutory GST forms may be examined by the appellate authority where an effective statutory remedy exists.

2. High Court reiterated the alternate remedy principle

The Court once again emphasized that writ jurisdiction should ordinarily not be exercised when a statutory appeal is available.

3. Delay may still be condoned

Where sufficient reasons are shown, the appellate authority has the discretion to consider a delay condonation application in accordance with law.

4. Merits remain open

Since the High Court refrained from examining the validity of the unsigned DRC forms, all issues remain open for adjudication before the appellate authority.

Conclusion

In M/s. Indus Ecowater v. Superintendent of Central Tax & Another, the Telangana High Court declined to adjudicate the validity of GST proceedings allegedly based on unsigned Form GST DRC-01 and DRC-07. Instead, it directed the taxpayer to avail the statutory appellate remedy by filing an appeal with the prescribed pre-deposit and delay condonation application. The ruling reinforces the consistent judicial approach that disputes involving procedural defects in GST adjudication should ordinarily be addressed through the statutory appellate mechanism before invoking writ jurisdiction.

FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT

Learned counsel Ms. K.Prabhabati appears for the petitioner.

Sri Dominic Fernandes, learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs (CHIC), appears for respondent No.1 .

2. The writ petition has been preferred challenging the show cause notice dated 25.11.2024 along with the proceedings in Form GST DRC-01 dated 27.11.2024 and the order-in-original dated 24.02.2025 along with its attachment and summary of the order in Form GST DRC-07 dated 25.02.2025 issued for the tax period April 2020 to March 2021.

3. The petitioner has approached this Court alleging that the impugned proceedings are null and void as there are no signatures on Form GST DRC-01 dated 27.11.2024 and the attachment and summary of the order in Form GST DRC-07 dated 25.02.2025.

4. However, after some arguments, learned counsel for the petitioner seeks liberty to the petitioner to prefer an appeal against the order-in-original. He submits that some delay might have been occurred in approaching the appellate authority and therefore, he may be directed to consider it sympathetically.

5. Learned Senior Standing Counsel for CHIC submits that the petitioner was at liberty to prefer an appeal against the order-in-original and DRC-07 taking all the grounds as are available in law and on facts before the appellate authority in respect of the subject tax period.

6. However, upon hearing the learned counsel for the parties, since the petitioner seeks liberty to prefer an appeal, we do not wish to comment on the merits of the contentions raised by the parties.

7. We grant liberty to the petitioner to prefer and appeal within a period of two weeks with statutory pre-deposit and a delay condonation application. The petitioner may take all such grounds of law and facts in the memo of appeal as are available to it. Needless to say, the appellate authority would consider the question of delay taking into account the aforesaid facts and circumstances and if he is satisfied on the point of delay, proceed to decide the appeal on merits in accordance with law.

8. The writ petition is accordingly disposed of with the aforesaid liberty. There shall be no order as to costs.

Miscellaneous applications pending, if any, shall stand closed.