Rishi Enterprises v. Additional Commissioner Central Tax Delhi North & Anr.

11. On these grounds, ld. Counsel for the Petitioner submits that impugned SCN and the impugned order are liable to be quashed.

12. A brief summary of all the grounds are as follows a) Firstly, that single SCN cannot be issued for multiple financial years. b) Secondly, that neither the impugned order nor the DRC-07 have been issued within the period of limitation, and therefore the impugned order is liable to be quashed. c) Thirdly, that the grounds for invoking Section 74 of the Act are not satisfied.

13. He has relied upon the following decisions as well. ● Akash Garg v. State of M. P., [W.P. No.16117/2020 decided on 19th November, 2020] ● L&T Hydrocarbon Engineering Ltd. v. Union of India, [R/Special Civil Application No.11308 of 2019 decided on 3rd February, 2022]

14. On the other hand, Mr. Aditya Singla, ld. Sr. Standing Counsel on behalf of the Respondent - Department has submitted that -

(i) On the issue of provision of consolidated SCN for multiple years, the judgment of this Court in Ambika Traders through proprietor Gaurav Gupta v. Additional Commissioner, Adjudication DGGSTI, CGST Delhi North (W.P.(C) 4853/2025 decided on 29th July, 2025) has held that, if the allegations of fraudulent availment of ITC is raised in an SCN, then the same can deal with multiple financial years.

(ii) Secondly, addressing the issue of belated uploading of DRC-07, he submits that this Court in its decision in Suresh Kumar v. Commissioner CGST Delhi North, [W.P.(C) 12199/2025, decided on 13th August, 2025] has held that the belated uploading of the DRC-07 would not, in itself, make the order barred by limitation.

(iii) Thirdly, reliance has also been placed on the fact that in this case, though the uploading of the impugned order happened subsequently on 11th February, 2025, an email was sent to the Petitioner on 4th February, 2025 on the registered email address of the Petitioner communicating the impugned order.

15. In response to this, Mr. Garg on behalf of the Petitioner submits that the order relates to 90 parties and the email which has been shown, does not show that it has been transmitted to all the parties. Secondly, the attachment is 17MB, which is beyond the normal storage that's compatible with an email on established platforms such as Google, Hotmail, Yahoo. He further submits that under Section 169(2) of the Act, ‘deemed service’ only would be in case of service, which is under Section 169(1)(a), 169(1)(e) or 169(1)(f) of the Act in view of the terms ‘tendered’ or ‘published’ or ‘affixed’ being used in said subsection. The Petitioner’s contention is that no ‘deemed service’ can be attributed where service is effected through the modes prescribed under the remaining sub-clauses. Analysis and Findings

16. The Court has heard the parties.

17. At the outset, it is relevant to point out that the impugned order deals with a case where there were 90 noticees. The investigation was based on the information, which was received by the Department, consequent to which an investigation was initiated against M/s D S Enterprises. It was found that the firm did not exist in the Anand Parbat area, which was the registered address of the said firm. The said M/s D S Enterprises was issued a notice, and summons were also issued on 19th October, 2023. It is the Department’s case that the firm was only incorporated for the purpose of obtaining GST registration and utilisation of ITC. The said firm had filed a GSTR[1] form for the period from September, 2017 to September, 2023. All the invoices were retrieved by the IO, which showed that the ITC was passed on to 229 recipients to the tune of ₹26.42 crores (Approx.). Out of the said entities, who had received the ITC, it is alleged that in respect of 89 firms, the invoices were goods-less invoices totalling to an amount of ₹11,61,03,114. As mentioned above the Petitioner is listed at serial no.14 as Noticee no.15 in the impugned order in this case.

18. Reply to the impugned SCN was filed by the Petitioner in which the stand taken was that all the e-way bills, e-voices and payments have been duly supported by the documents. However, it is relevant to note that the said reply does not mention what goods were which were sold or received. The invoices collected by the Department show ‘D[3] Round’ and ‘Alloy Steel Round’ as the products which were being sold. These are four invoices, which, according to the Petitioner, are the invoices from M/s D S Enterprises.

19. Thereafter, the impugned order was passed on 31st January, 2025. As per Table A of the impugned order the transaction value with M/s D S Enterprises and the ITC availed of by the Petitioner is mentioned along with the GST registration number. As per the invoices, the total value of the goods, insofar as the Petitioner is concerned, is to the tune of ₹1,44,10,717/- and the ITC involved is to the tune of ₹25,93,929/-. The impugned order -

(i) confirms the demand of ITC along with interest,

(ii) imposes a penalty equivalent to the tax liability and

(iii) also imposes a penalty under Section 122 of the Act against noticee no. 2 - 90, except 34, 75 and 76 i.e., against Petitioner- Rishi Enterprises as well.

20. It is against the said order that the present petition has been preferred. One of the primary contentions of the Petitioner is that the reply has not been considered. However, a perusal of paragraph 14 of the impugned order shows that three hearings were fixed. But it is the case of the Petitioner that no notice for personal hearing was received. This would be a factual issue and at this stage, when such detailed investigation has taken place, the Petitioner has filed a reply and hearing notices are stated to have been issued, there is no reason to disbelieve the Department. Moreover, once the reply was filed by the Petitioner, a duty was cast upon it to be diligent and attend any hearings that may be fixed. Paragraph 14 of the impugned order reads as under:

The above paragraph would show that personal hearings, as mentioned above, were, in fact, given to the Petitioner on three occasions.

21. Coming to the issue raised by ld. Counsel for the Petitioner on the aspect of multiple orders years being covered in a single SCN, the issue is squarely covered by the decision in Ambika Traders (supra) where this Court has observed as under:

Principle* 73 of the CGST Act. The relevant provisions read as under:

the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice.”

44. Some of the other provisions of the CGST Act, which are relevant, include Section 2(106) of the CGST Act, which defines “tax period” as under: “2.[…] (106) “tax period” means the period for which the return is required to be furnished”

45. Thus, Sections 74(3), 74(4), 73(3) and 73(4) of the CGST Act use the term “for any period” and “for such periods”. This would be in contrast with the language used in Sections 73(10) and 74(10) of the CGST Act where the term “financial year” is used. The said provisions read as under: “73.[…] (10) The proper officer shall issue the order under sub-section (9) within three years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within three years from the date of erroneous refund” “74.[…] 10) The proper officer shall issue the order under sub-section (9) within a period of five years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund.” The Legislature is thus, conscious of the fact that insofar as wrongfully availed ITC is concerned, the notice can relate to a period and need not to be for a specific financial year.

46. The nature of ITC is such that fraudulent utilization and availment of the same cannot be established on most occasions without connecting transactions over different financial years. The purchase could be shown in one financial year and the supply may be shown in the next financial year. It is only when either are found to be fabricated or the firms are found to be fake that the maze of transactions can be analysed and established as being fraudulent or bogus.

47. A solitary availment or utilization of ITC in one financial year may actually not be capable of by itself establishing the pattern of fraudulent availment or utilization. It is only when the series of transactions are analysed, investigated, and enquired into, and a consistent pattern is established, that the fraudulent availment and utilization of ITC may be revealed. The language in the abovementioned provisions i.e., the word `period’ or `periods’ as against `financial year’ or `assessment year’ are therefore, significant.

48. The ITC mechanism is one of the salient features of the GST regime which was introduced to encourage genuine businesses. In the words of Shri Pranab Mukherjee, the then Hon’ble President of India, who addressed the Nation at the launch of the GST on 1st July, 2017, ITC was highlighted as one of the core features integral to the framework of the GST regime. The relevant extract of the said speech of the Hon’ble President is set out below: “I am told that a key feature of the system is that buyers will get credit for tax paid on inputs only when the seller has actually paid taxes to the government. This creates a strong incentive for buyers to deal with honest and compliant sellers who pay their dues promptly.”

49. It is seen that the said feature of ITC has been misused by large number of unscrupulous dealers, businesses who have in fact utilized or availed of ITC through non-existent supplies/purchases, fake firms and non-existent entities. The ultimate beneficiary of the ITC in the most cases may not even be the persons in whose name the GST registration is obtained. Businesses, individuals, and entities have charged commissions for passing on ITC. In several cases, it has also been noticed that the persons in whose name the GST registration stands are in fact domestic helps, drivers, employees, etc., of businessmen who are engaged on salary and who may not even be aware that their identities are being misused.

50. In fact, Parliamentary questions have been raised on such fraudulent availment of ITC. In one such Parliamentary question, it was revealed as under: “The press release issued by Ministry of Finance on 07.01.2024 (Annexure 1) brought out that 29,273 bogus firms involved in suspected Input Tax Credit (ITC) evasion of Rs 44,015 crore were detected in a sustained drive against non-existent tax payers by GST formations across the country since May 2023. An amount of Rs. 44,015 Crore (Rs.15240 Crore (State) + Rs. 28775 Crore (Centre)) of fake ITC has been detected.” XXXX

54. The present case appears to be one such case where a substantial amount of ITC is alleged to have been availed/utilized running into more than Rs.83 Crores. The Petitioner is alleged to be one of the main entities/persons involved in the said activity. The transactions are between the years 2017 to 2021. A consolidated notice is, therefore, not merely permissible but, in fact, required in such cases in order to establish the illegal modality adopted by such businesses and entities. The language of the provision itself does not prevent issuance of SCN or order for multiple years in a consolidated manner.

55. Even in the order which has been impugned before this Court, the details of the amounts for each year are set out clearly in the content of the order itself and is, therefore, clearly decipherable. Thus, it cannot be held that the issuance of consolidated notice or order violates the language of the provisions. Especially, in the case of fraudulent availment of ITC or utilization of ITC such consolidated notice and order would not just be in fact, be required to show the wilful misstatement or suppression or the fraudulent availment/utilization.”

22. Even in the present case, there are a maze of transactions, which may be spreading over various financial years and, therefore, owing to the statutory language and the view already taken by this Court in the above decision, it cannot be held that a SCN or an order passed under Section 74 of the Act relating to fraudulent availment of ITC cannot relate to multiple financial years.

23. Coming to the issue of limitation, it is relevant to note that the Petitioner assails the impugned order on the ground of limitation on two sub-grounds namely:

(i) The impugned order along with DRC-07 was uploaded on the portal only on 11th February, 2025 which was beyond the period of limitation.

(ii) The email communication of the impugned order cannot constitute valid ‘service’ as the Petitioner allegedly had not received it and even otherwise email as a mode of communication would not fall into the scope of ‘deemed service’ under Section 169(2) of the Act.

24. A perusal of Section 74(10) of the Act would show that the order issued under Subsection 74(9) has to be issued within a period of 5 years from the due date of filing of annual returns. The said provision reads as under:

which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund.” It is relevant to note that the above section only requires the order to be issued within a period of 5 years.

25. Rule 142 of the CGST Rules relied upon by the parties shall also be relevant which reads as under:

It is also essential to note that the summary order in FORM DRC-07 is required to be uploaded electronically.

26. That being said, the question that has to be adjudicated, is what would constitute ‘issue the order’ in the present case because the impugned order appears to have been -

(i) signed on 31st January, 2025,

(ii) sent to the Petitioner via email on 4th February, 2025 and

(iii) uploaded along with DRC-07 on the portal on 11th February, 2025.

27. A perusal of Section 74(10) of the Act reveals that it merely requires the order and not the DRC-07 to be mandatorily issued within the period of limitation. In fact, Rule 142 of the CGST Rules, as pointed out above, makes it clear that DRC-07 is merely a summary of the order issued. After the issuance of the order, DRC-07 is to be uploaded electronically. Thus, the order is issued first and, thereafter, the DRC-07 which is the summary, is to be uploaded. The amount, which would be liable to be paid or demanded in any particular order, is already contained in the order itself. For example, in the present case, the same is contained in paragraph 2 of the impugned order, which reads as under: “2) In respect of Noticee No.2 to 90 (except Noticee NO. 34,75 & 76):

(i) I confirm the demand and order to recover the 'Input

Tax Credit' (ITC) amount(s) from Noticee No. 2 to 90 (except Noticee No. 34, 75 & 76), as mentioned against their names, Column (6) of Table-A, wrongly availed and utilized by them, is disallowed under the provisions of Section 74(1) of CGST Act, 2017 read with the DGST Act, 2017 and IGST Act, 2017, by invoking the extended period of limitation;

(ii) I also confirm the demand of Interest, at applicable rates, from Noticee No. 2 to 90 (except Noticee No.34, 75 & 76) against the amount of demand, as mentioned against their respective names, in Column (6) of Table-A, under Section 50 of CGST Act, 2017 read with the DGST Act, 2017 and IGST Act, 20l[7];

(iii) I also impose Penalty, equivalent to tax liability, upon

Noticee No. 2 to 90 (except Noticee No. 34,75 & 76) as mentioned in Column (6) of Table-A, under Section 74(1) of CGST Act, 2017 read with the DGST Act, 2017 and IGST Act, 2017;

(iv) I refrain from imposing Penalty under Section 122(1)

(vii) & (xvii), Section 122(2)(b) and Section 122(3) (a) &

(d) of the CGST Act, 2017 and the DGST Act, 2017 and

GSTIN Trade Name Taxable Value ITC Involved 1 Notice No.2 07AACPC3626L1ZW Nanak Enterprises 7,03,82,426 1,26,68,837 **************

28. The Petitioner is Noticee no.15 in this case. The amount is specifically calculated in Chart A as extracted above. Thus, upon the impugned order being issued to the Petitioner via email, the amount that is demanded is clearly decipherable from the order itself.

29. Further, this issue has also been considered by this Court in Suresh Kumar (supra) wherein it has been held clearly that especially in the case of hundreds of noticees, a reasonable period may be taken by the Department to actually generate the DRC-07 in order to clearly specify the demand against each of the noticees, so that there is no ambiguity whatsoever. However, there is no doubt that the DRC-07 ought to ideally accompany the order or should be uploaded within a reasonable time, as without the DRC-07, no appeal can be filed and no demand can be enforced. Relevant portion of the decision in Suresh Kumar (supra) is set out below:

appeal, the Petitioner is also permitted to raise the issue of limitation.

15. Let the appeals challenging the impugned orders be filed by 30th September, 2025 along with the requisite pre-deposit. If the same are filed by the said date, they shall not be dismissed on the ground of limitation and shall be adjudicated on merits.”

30. The decision of the Telangana High Court, which has been placed before this Court, in Sahithi Marketers v. Superintendent of Central Tax, (2025) 29 Centax 129 (Telangana) also deals with a similar situation where there is delay in uploading of the DRC-07, which the Court held would not be liable to be raised as a ground for filing of writ petition. In the said decision, the ld. Division Bench of the Telangana High Court has pithily captured this very position in the following words:

73 of the GST Act. By placing reliance on the judgment of the Apex Court in CCT v. GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED, it is submitted that the petitioner could have preferred an appeal within ninety (90) days extendable by thirty (30) days under the GST Act. The petitioner has not filed the petition within aforesaid time. This point is considered by the Apex Court to the aforesaid case and in view of principles laid down therein this petition may not be entertained.

6. We have heard the parties at length. *********

8. Admittedly, the petitioner had a remedy of appeal under the GST Act and did not avail such remedy. This petition is not filed within the statutory time limit prescribed under the GST Act. Thus, in view of the judgment of the Apex Court in GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED (supra), we find substance in the argument of learned Senior Standing Counsel for CBIC that this petition is not liable to be entertained. Otherwise, it will be against the scheme and intention of the statutory provision. The O.I.O. dated 24.04.2024 contained physical signature and it is issued within the limitation period which was extended upto 30.04.2024. DRC-07 is only a ‘summary of order’ and even if it did not contain any signature, it will not cause any prejudice to the petitioner.”

31. Coming to the second sub-ground on which the impugned order is being assailed, i.e., mode of service, Section 169 of the Act, provides for various options/modes for service of any decision, summons or order which reads as under:

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.”

32. A perusal of the above provision would show that the service can be effected either -

(i) through physical tendering, or

(ii) by registered post or speed post or courier with acknowledgment due, or

(iii) by a communication to the email address, or

(iv) uploading on the common portal, or

(v) by publication in a newspaper or by affixation.

It is not in dispute that service can be effected by any one of the above modes under Section 169 of Act. However, ld. Counsel for the Petitioner raises an interesting issue under Section 169(2) that ‘deemed service’ only would be in case of service, which is under Section 169(1)(a), 169(1)(e) or 169(1)(f) of the Act in view of the terms ‘tendered’ or ‘published’ or ‘affixed’ being used in said subsection. The Petitioner’s contention is that no ‘deemed service’ can be attributed where service is effected through the modes prescribed under the remaining sub-clauses.

33. Insofar as this argument is concerned, the Court has no doubt as to the fact that ‘limitation’ and ‘service’ are interlinked with each other. Therefore, the term issuance of an order has to be interpreted in the context of Section 169 of the Act and Rule 142 of the CGST Rules. Under the scheme of Section 169 of the Act the usual modes of service are stipulated and some modes of service are also construed as ‘deemed service’ under Section 169(2). The usual modes of service could be physical service, registered post, speed post, courier, email, uploading on the common portal, affixation etc., In the case of some modes of service, the service is deemed to have been effected. However, it cannot be argued or held that only when the service is done by any of the deemed service modes, that the order would stand issued. The issuance of the order in any of the stipulated modes of service would constitute service. There is a difference between issuance of an order and deemed service under Section 169(2) of the Act. Issuance of the order is what is required under Section 74(10) of the Act and service through a mode which would constitute deemed service of the order is not mandated. Therefore, communicating an order by email would be sufficient service in terms of Section 169 of Act for constituting issuance of an order. Rule 142 is also clear in the initial portion where it uses the expression, summary of the order issued under Section 74 of the Act.

34. Coming to the last and final issue of whether there is sufficient ground to invoke the extended period of limitation under Section 74 of the Act, there cannot be any doubt that Section 74 is to be invoked in circumstances where there is an allegation of fraud, wilful misstatement or suppression. In the present case, the impugned order as well as the impugned SCN itself reveal that the investigation was commenced sometime in October 2023 when the information was received from the investigation wing. Immediately, thereafter, M/s Padmavat Industries and M/s D S Enterprises have been investigated, and it has been found, as per the Department, that there is a fraudulent availment and passing on of ITC.

35. It is relevant to point out that, though the total number of recipients in the case of M/s D S Enterprises is 229, it is only in the case of 89 firms that the jurisdiction has been exercised by the Department. If, prima facie, in the process of investigating 89 entities and their documents, instances of fraudulent availment are revealed, then the extended period of limitation would obviously apply.

36. In L&T (supra) which has been relied upon by the Petitioner, the Court was considering a case where there was only an issue of law to be decided and no factual averment was to be considered. Paragraph 72 of the said judgment is relevant and is extracted herein below:

Unlike in the case of L&T (supra), in the present case, there are various factual issues would have to be considered and analysed, which in writ jurisdiction cannot be gone into. Accordingly, this Court, upon a consideration of the overall conspectus of the matter, is satisfied that the provisions of Section 74 of the Act are applicable to the present case.

37. In this factual and legal background, this Court is not inclined to entertain the present writ petition. The Petitioner is, however, permitted to file the appeal under Section 107 of the Act before the Appellate Authority by 30th September, 2025 along with the requisite pre-deposit. If the same is filed within the stipulated period, the Appellate Authority shall not dismiss it on the grounds of limitation and adjudicate it on its own merits.

38. The petition is dismissed in the above terms. Pending applications, if any, are also disposed on in the above terms.

PRATHIBA M. SINGH JUDGE SHAIL JAIN JUDGE AUGUST 20, 2025/dk/Ar. (corrected & released on 26th August, 2025)