Consolidated Appeal Allowed Against Common Order in Multi-Year ITC Dispute

Court: High Court of Delhi
Case Title: Delhi Foils & Abinox Industries v. Additional Commissioner & Anr.
Petition Nos.: W.P. (C) 7626/2025 & W.P. (C) 7676/2025
Date of Judgment: 28.05.2025
Bench: Justice Prathiba M. Singh, Justice Rajneesh Kumar Gupta
Relevant Sections: Section 107, CGST Act, 2017
Category of Dispute: Input Tax Credit (ITC) – Good-less Invoices

Facts of the Case 📌

[Para 3–6]

• Petitioners Delhi Foils (a partnership) and Abinox Industries (a proprietorship) challenged a common Show Cause Notice dated 31.08.2022 and a final adjudication order dated 03.02.2025.

• The allegations involved wrongful availment of ITC via good-less invoices for FYs 2017–18 to 2019–20.

• A search was conducted on 29.12.2020, followed by the arrest of the partners/proprietors on 30.12.2020.

• Form DRC-07 dated 05.02.2025 was issued, reflecting only FY 2017–18, which petitioners contended was misleading.

Questions in Consideration ❓

[Para 7–9]

1. Can a consolidated appeal be filed under Section 107 of CGST Act where one SCN and one order relate to multiple financial years?

2. Is the limitation period valid when DRC-07 mentions only one financial year while the SCN covered three?

3. Can issues regarding improper issuance of Form DRC-07 be raised before the Appellate Authority?

Observations of the Court 👩‍⚖️

[Para 9–12]

• The Court noted that both SCN and impugned order were common to both petitioners and covered all three financial years.

• It held that the appeal need not be split year-wise despite multi-year coverage, allowing one consolidated appeal.

• Clarified that limitation would not be a ground for rejection if appeal is filed by the granted date (15.07.2025).

• Permitted raising of grounds concerning procedural irregularities in Form GST DRC-07 before the appellate authority.

Judgment of the Court ⚖️

[Para 13]

• Directed that consolidated appeal may be filed by 15.07.2025 under Section 107 of the CGST Act, 2017.

• Pre-deposit may be made accordingly.

• The Appellate Authority must consider the appeal on merits and not dismiss on limitation.

• Petitions were disposed of with liberty to raise procedural contentions before the appellate forum.

🧵 Between Fine Lines:

• Businesses served with a consolidated SCN covering multiple years may file a single appeal under Section 107 CGST.

• A mere mention of one year in DRC-07 won’t invalidate appeal rights for other covered years.

• Limitation will not defeat appeal rights if deadline compliance is ensured.

• Procedural defects in DRC forms can be agitated before appellate forums.

• Courts continue to lean towards substantive justice in procedural ambiguity.

📚 Summary of Referred Cases

No external judgments cited or relied upon in this decision.