Facts of the Case:

In this case, the petitioners being a Company and its Managing Director, challenged an Order-in-Original and summary order in Form GST DRC-07 passed under Section 74(9) of the CGST Act. The proceedings originated from a show cause notice in Form GST DRC-01 alleging fraudulent availment and passing of Input Tax Credit (ITC).

The adjudicating authority passed a composite order, fastening tax, interest, and penalty liabilities jointly on the Company and its Managing Director, including penalty under Section 122(1A) of the CGST Act. However, a single composite Form GST DRC-07 was issued for both parties.

The Managing Director, being an unregistered person under GST, was unable to file an appeal due to absence of a separate DRC-07 and lack of registration/identification. The petitioners contended that such procedure deprived the Managing Director of an effective statutory remedy of appeal.

Issue: Whether issuance of a composite Form GST DRC-07 covering both a company and its Managing Director is valid in law. Whether an unregistered person i.e. Managing Director can exercise the right of appeal without separate summary order, and GST registration/identification. Whether the Department is required to grant temporary identification under Rule 16A, and issue separate DRC-07 forms to enable independent appellate remedies.

Held That:

The Court accepted the submission of the Revenue that under Rule 16A of the CGST Rules (as amended, 2025), the Proper Officer is empowered to grant a temporary identification number to an unregistered person such as the Managing Director. It observed that since the impugned summary order in Form GST DRC-07 had been issued in a composite manner, fastening liability on both the Company and its Managing Director, the Managing Director must be enabled to avail the appellate remedy independently.

Accordingly, the Court held that separate fresh Form GST DRC-07 must be issued, one for the Company and another for the Managing Director, so as to facilitate independent appeals. It further clarified that the Managing Director shall be at liberty to raise all grounds of fact and law before the appellate authority, and that the limitation period for filing appeal shall commence only from the date of issuance of such fresh DRC-07.

The Managing Director was permitted to apply for a temporary registration/identification number, and the competent authority was directed to grant the same within the stipulated time. The writ petitions were disposed of with these directions, without examining the merits of the case.

Case Name: Mr. Bharat Kumar Agarwal and M/s. Sugna Metal Limited. Versus Joint Commissioner (AE) Office of the Commissioner of Central Tax, Central Excise and Service Tax, Medchal Commissionerate. dated 08.04.2026

To read the complete judgement 2026 Taxo.online 907