Delhi High Court Allows Consolidated Appeal for Multi-Year GST Proceedings - Procedural Relief

The Hon'ble High Court of Delhi in Delhi Foils & Abinox Industries v. Additional Commissioner and Anr., W.P.(C) 7626/2025 & W.P.(C) 7676/2025, decided on May 28, 2025, held that since a common show cause notice was issued upon the petitioners and a common impugned order has been passed covering three financial years (2017-18 to 2019-20), the petitioner shall be permitted to file one consolidated appeal before the Appellate Authority under Section 107 of the Central Goods and Service Tax Act, 2017. The Court observed that although Form DRC-07 dated February 5, 2025 specified only Financial Year 2017-18, it actually related to all three financial years and the earliest year was mentioned only to reflect that the same was being passed within the limitation period. The Court granted time till July 15, 2025 to file the appeal along with pre-deposit on the tax amount, with protection that if filed by this date, the appeal shall not be dismissed on ground of limitation.

Facts of the Case

The Petitioners, Delhi Foils and Abinox Industries, filed two separate writ petitions challenging the same show cause notice dated August 31, 2022 and final order dated February 3, 2025. Delhi Foils was a partnership concern of Mr. Alok Bhargava and Ms. Neena Bhargava, while Abinox Industries was a proprietorship concern of Mr. Akul Bhargava. The show cause notice was issued by Respondent No. 2, Directorate General Goods & Service Tax Intelligence, Gurugram Zonal Unit on August 31, 2022 in respect of the wrongful availment of Input Tax Credit through issuance of good-less invoices.

The proceedings were a result of the search which was conducted at the Petitioners' premises on December 29, 2020 and the Petitioners' proprietors/partners were even arrested on December 30, 2020 in this matter. The show cause notice related to the period 2017-18 to 2019-20 and was duly replied to by the Petitioners. The show cause notice was adjudicated and the impugned order dated February 3, 2025 was passed, raising demands upon the Petitioners.

A perusal of the Form DRC-07 dated February 5, 2025 specified the tax period as July 2017 to March 2018. However, learned Counsel for the Department submitted that said Form DRC-07 related to all three financial years i.e. 2017-18 to 2019-20 and the earliest year had been mentioned only to reflect the fact that the same was being passed within the limitation period. Learned Counsel for the Petitioner submitted that the show cause notice was issued in respect of three financial years and hence the Petitioner would be compelled to file three different appeals qua the impugned order. The Petitioners were aggrieved by having to potentially file multiple appeals for what was essentially a single proceeding covering multiple years.

Issue

Whether petitioners who received a common show cause notice covering three financial years but whose impugned order mentioned only one financial year in Form DRC-07 would be required to file separate appeals for each financial year or could file one consolidated appeal.

Held by the Court

The Hon'ble High Court of Delhi in Delhi Foils & Abinox Industries v. Additional Commissioner and Anr., W.P.(C) 7626/2025 & W.P.(C) 7676/2025, decided on May 28, 2025, held that:

• The Court observed that since a common show cause notice was issued upon the Petitioners and a common impugned order has been passed and only Financial Year 2017-18 is mentioned in respect of the impugned order dated February 3, 2025, the Petitioner shall be permitted to file one consolidated appeal before the Appellate Authority under Section 107 of the Central Goods and Service Tax Act, 2017. The Court noted that despite Form DRC-07 showing only one financial year, the Department had clarified that it actually covered all three years involved in the proceedings.

  
  

• The Court held that considering the amount that has been demanded from the Petitioners and the pre-deposit that is to be made, the Petitioners are given time till July 15, 2025 to file the said appeal along with the pre-deposit on the tax amount. The Court provided protection by ruling that if the appeal is filed by July 15, 2025, the same shall be considered and adjudicated on merits and shall not be dismissed on the ground of limitation.

  
  

• The Court also directed that the ground in respect of Form GST DRC-07 having been improperly issued, may also be raised before the Appellate Authority by the Petitioners. The Court thus resolved the practical difficulty faced by taxpayers who would otherwise have to file multiple appeals for what was essentially a single proceeding, thereby providing relief in terms of both procedure and costs involved in multiple appeals.

  
  

Relevant Sections

• Section 107 of Central Goods and Service Tax Act, 2017

• Form DRC-07 under GST Rules

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