The Hon’ble Delhi High Court in Rishi Enterprises v. Additional Commissioner Central Tax Delhi North & Anr [W.P.(C) 4374/2025, order dated August 20, 2025] held that delay in uploading DRC-07 summary order does not invalidate GST adjudication proceedings, service of order via email is valid, and consolidated SCN spanning multiple years is permissible in cases involving fraudulent ITC availment.
Facts:
Rishi Enterprises (“the Petitioner”), engaged in trading, was one among 89 recipients issued notices arising from an investigation into fraudulent Availment of Input Tax Credit (ITC) linked to a non-existent supplier, M/s DS Enterprises. The investigation revealed that DS Enterprises was a bogus firm used to generate fake invoices for fraudulent ITC passing and availment amounting to Rs. 26.42 crores in total.
Additional Commissioner Central Tax Delhi North and others (“the Respondents”) issued a consolidated Show Cause Notice (SCN) and an adjudication order imposing tax and penalties totalling Rs. 51.87 lakhs on Rishi Enterprises, alleging wrongful availment of ITC between 2017 and 2023.
The Petitioner challenged the adjudication primarily on three grounds: (i) delay in uploading the DRC-07 summary beyond the limitation period made the order time-barred; (ii) service of the order via email was invalid under Section 169(2) of the CGST Act; and (iii) a consolidated SCN/orders spanning multiple years were impermissible.
The Respondents contended that the SCN and order were issued within the limitation period, service by email was valid under Section 169 of the CGST Act, and consolidated SCNs are necessary to address the modus operandi of fraudulent ITC availment spanning multiple tax periods.
Issues:
- Whether delay in uploading DRC-07 summary order affects limitation and validity of adjudication?
- Whether service of GST adjudication order through email is valid, and whether consolidated SCNs and orders spanning multiple financial years are permissible in GST fraud cases?
Held:
The Hon’ble Delhi High Court in W.P.(C) 4374/2025 held as under:
- Observed that, delay in uploading DRC-07, which is a summary of the adjudication order, does not invalidate the proceedings or render the order time-barred. The limitation under Section 74(10) requires issuance of the order itself within the period, not the upload of the summary.
- Noted that, service of adjudication orders by email on the registered email address is a valid mode under Section 169 of the CGST Act and suffices for the purpose of “issuance” and service of the order, even if the email does not fall into the specifically defined ‘deemed service’ modes under Section 169(2).
- Held that, issuance of consolidated SCNs and orders spanning multiple years is permissible, especially in cases involving fraudulent availment or utilization of ITC across periods. The statutory language in Sections 73 and 74 envisages notices and orders for “any period” or “such periods,” allowing consolidated proceedings.
- Held that, the extended limitation of five years under Section 74 applies as the fraud and suppression allegations justify extended limitation.
- Allowed the Petitioner liberty to file appeals under Section 107 of the CGST Act by September 30, 2025, with required pre-deposit, and held such appeals shall not be dismissed on limitation grounds but adjudicated on merits.
Our Comments:
The Delhi High Court’s ruling regarding the issue of limitation and timing of DRC-07 upload, the judgment aligns with the consistent judicial view that the limitation period under Section 74(10) applies only to the issuance of the adjudication order itself and not necessarily the summary upload of DRC-07 for the purpose of initiating appeals or enforcing the demand. This follows the reasoning in Suresh Kumar v. Commissioner CGST Delhi North [W.P.(C) 12199/2025 dated August 13, 2025] and the Telangana High Court Division Bench decision in Sahithi Marketers v. Superintendent of Central Tax [(2025) 29 Centax 129], which specifically held that delay in the summary order (DRC-07) upload does not invalidate the order or render it time-barred.
The Court’s validation of service by email as a valid mode under Section 169 is consistent with the legislative intent to incorporate modern communication modes for efficiency in GST proceedings, despite not falling within the “deemed service” modes under Section 169(2). This position finds support in judgments by the Madras High Court as in Poomika Infra Developers v. State of Tamil Nadu [W.P. No 33562 of 2024 decided on April 25, 2025] upholding service through common portals and electronic communication as legally sufficient.
On the permissibility of consolidated SCNs/orders across multiple financial years in cases of fraudulent ITC availment, the judgment follows the rationale in Ambika Traders through proprietor Gaurav Gupta v. Additional Commissioner, DGGSTI, CGST Delhi North [W.P.(C) 4853/2025 decided on July 29, 2025], which emphasizes the necessity to address the intricate modus operandi of ITC frauds extending across years through consolidated proceedings, to holistically uncover fraudulent schemes.
However divergent judicial views exist on consolidated SCNs in GST by the Kerala High Court in Joint Commissioner v. M/s Lakshmi Mobile Accessories [2025: KER: 9253] took a restrictive view disallowing consolidated SCNs or orders for multiple years, emphasizing statutory language requiring separate proceedings per financial year.
Relevant Provisions:
Section 169 of the CGST Act, 2017:
“Service of notice in certain circumstances.-
(1) Any decision, order, summons, notice or other communication under this Act or the rules made thereunder shall be served by any one of the following methods, namely:-
(a) by giving or tendering it directly or by a messenger including a courier to the addressee or the taxable person or to his manager or authorised representative or an advocate or a tax practitioner holding authority to appear in the proceedings on behalf of the taxable person or to a person regularly employed by him in connection with the business, or to any adult member of family residing with the taxable person; or
(b) by registered post or speed post or courier with acknowledgement due, to the person for whom it is intended or his authorised representative, if any, at his last known place of business or residence; or
(c) by sending a communication to his e-mail address provided at the time of registration or as amended from time to time; or
(d) by making it available on the common portal; or
(e) by publication in a newspaper circulating in the locality in which the taxable person or the person to whom it is issued is last known to have resided, carried on business or personally worked for gain; or
(f) if none of the modes aforesaid is practicable, by affixing it in some conspicuous place at his last known place of business or residence and if such mode is not practicable for any reason, then by affixing a copy thereof on the notice board of the office of the concerned officer or authority who or which passed such decision or order or issued such summons or notice.
(2) Every decision, order, summons, notice or any communication shall be deemed to have been served on the date on which it is tendered or published or a copy thereof is affixed in the manner provided in sub-section (1).
(3) When such decision, order, summons, notice or any communication is sent by registered post or speed post, it shall be deemed to have been received by the addressee at the expiry of the period normally taken by such post in transit unless the contrary is proved.”
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