Facts of the Case

Crown Metal Scraps challenged an order dated 27.08.2024 passed for the tax period 2019-20 (GSTIN 33AANFC9639A1ZH), along with the consequential recovery order dated 20.02.2025 in FORM GST DRC-13 under Rule 145(1) read with Section 79(1)(c) of the TNGST Act. The petitioner's case was that for the identical period, an earlier order had already been passed on 04.10.2023 in GST DRC-05 under Section 74 of the TNGST Act, 2017, so the impugned order amounted to double jeopardy. Further, the impugned order dated 27.08.2024 was passed without the petitioner having participated in the adjudication proceedings initiated vide DRC-01 dated 20.12.2023.

Issues Involved

  1. Whether passing a fresh order for a tax period already the subject of an earlier DRC-05 intimation amounts to double jeopardy or an impermissible overlap.
  2. Whether an order passed under DRC-07 without the assessee's participation in the DRC-01 adjudication can be sustained.

Petitioner's Arguments

  • An order had already been passed on 04.10.2023 in GST DRC-05 (a form meant for intimation of conclusion of proceedings, not a determination) for the same period, so the impugned DRC-07 order for the identical period resulted in double jeopardy.

Respondent's Arguments

  • The Additional Government Pleader for the respondents appeared and did not seriously contest the factual overlap once it was pointed out by the Court.

Court Order / Findings

  • The Court noted that FORM GST DRC-05 is meant to be issued under Rule 142(3) merely to intimate the conclusion of proceedings, whereas the order following a DRC-01 show-cause notice is normally passed in FORM GST DRC-07 — and it appeared the same mistake (issuing DRC-05 instead of DRC-07) had occurred in the earlier round on 04.10.2023.
  • In any event, the impugned order dated 27.08.2024 had been passed without the petitioner participating in the adjudication initiated vide DRC-01 dated 20.12.2023, and there appeared to be an overlap that needed to be looked into.
  • Both impugned orders were quashed and the matter remitted to the first respondent to pass fresh orders on merit within 30 days, with the petitioner free to substantiate its case and the respondents required to explain why orders were passed for the same period.

Important Clarification

  • FORM GST DRC-05 (mere intimation of conclusion of proceedings under Rule 142(3)) is not a substitute for a reasoned determination order in FORM GST DRC-07 following a DRC-01 show-cause notice; using DRC-05 in place of DRC-07, and later issuing a fresh order for the same tax period without the assessee's participation, creates a procedural overlap that courts will remit for the Department itself to explain and resolve, rather than allowing recovery to proceed.

Sections Involved

  • Section 74, TNGST Act, 2017 – determination of tax not paid by reason of fraud, wilful misstatement or suppression of facts.
  • Rule 142(3), TNGST Rules – intimation of conclusion of proceedings in FORM GST DRC-05.
  • Rule 145(1) read with Section 79(1)(c), TNGST Act – recovery of amounts due, under FORM GST DRC-13.

Decision – In Favour of

Decided in favour of the Assessee. Both impugned orders were quashed and the matter remitted for fresh orders on merit.

Case Details

  • Court: Madurai Bench of Madras High Court
  • Case No.: W.P.(MD) No. 16183 of 2025 and W.M.P.(MD) Nos. 12257 & 12259 of 2025
  • Coram: Hon'ble Mr. Justice C. Saravanan
  • Date of Order: 16 June 2025

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