Non-Uploading of GST DRC-07 May Impact Appeal Limitation Period: Allahabad HC Sets Aside Order Rejecting Appeal as Time-Barred [Read Order]

In a recent ruling, the Allahabad High Court set aside the order of the appellate authority which had rejected a GST appeal filed on the ground of limitation and sent the matter back for reconsideration of the delay condonation application.

The case began when Tenet Networks Private Ltd engaged in wireless networking business and registered under the UPGST/CGST Act, 2017, purchased wireless networking equipment worth Rs. 26,25,000 from Brij Systems Ltd., Delhi. An e-way bill was generated on 20 July 2022 with GST at 18%.

The goods were intercepted by the Assistant Commissioner, Sales Tax, Mobile Squad-4, Noida because Part-B of the e-way bill was not filled by the transporter. Physical verification of the goods was done and no discrepancy was found.

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Later, the authority issued notice in Form MOV-07 and passed a penalty order in Form MOV-09 under Section 129(1)(a) of the GST Act imposing penalty of Rs. 9,50,000. The petitioner argued that the summary of the demand order in Form GST DRC-07 was uploaded only on 26 November 2022 after a request was made to the department.

The petitioner filed an appeal before the Additional Commissioner (Appeals) explaining that delay happened because Form DRC-07 was not uploaded earlier. The appellate authority rejected the appeal saying it was filed beyond the limitation period under Section 107 of the GST Act.

Before the High Court, the petitioner argued that limitation should run from 26 November 2022 when Form DRC-07 was uploaded and communicated. It was also argued that Form DRC-07 is necessary for filing the appeal.

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Justice Vikas Budhwar observed that the petitioner had already raised the issue of non-uploading of Form DRC-07 in the memo of appeal. The court explained that when such ground is taken, the appellate authority must consider it while deciding the matter.

The court also pointed out that earlier decisions say Form GST DRC-07 is a mandatory requirement. The court further observed that the appellate authority did not properly consider the petitioner’s explanation for delay and rejected the appeal without examining the ground raised.

In view of this, the court set aside the order and sent the matter back to the appellate authority to decide the delay condonation application again according to law within two months.

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