Facts of the Case:

In this case, the petitioner challenged a garnishee notice issued in Form GST DRC-13 dated 22.05.2026, whereby the department sought to recover ₹27,26,235 towards interest and penalty. The petitioner contended that the recovery proceedings were without jurisdiction as they were contrary to the adjudication order dated 01.12.2025 and the corresponding summary order in Form GST DRC-07, which reflected a demand only of ₹50,840 towards tax and showed nil interest and penalty.

Relying on the DRC-07 summary, the petitioner discharged the outstanding tax of ₹50,840 along with interest of ₹73,210 on 20.05.2026 and did not prefer an appeal. During the hearing, the Revenue pointed out that the original adjudication order had in fact confirmed not only the tax demand but also the levy of applicable interest under Section 50(3) and penalty under Section 74(9).

However, due to an apparent clerical or procedural discrepancy, these components were omitted from the DRC-07 summary. The department submitted that it proposed to issue a rectified DRC-07 correctly reflecting the interest and penalty. The petitioner argued that until such rectification was made, the garnishee notice seeking recovery of interest and penalty was unsustainable.

Issue:

Whether the department could initiate recovery proceedings through Form GST DRC-13 for interest and penalty when the corresponding Form GST DRC-07 summary did not reflect any such demand, notwithstanding that the adjudication order itself had confirmed the levy of interest and penalty.

Held That:

The High Court observed that there was an undeniable discrepancy between the adjudication order and the summary order in Form GST DRC-07. While the adjudication order expressly confirmed the levy of applicable interest and penalty, the DRC-07 summary reflected only the balance tax demand of ₹50,840 and omitted the interest and penalty components.

Since the petitioner had acted upon the DRC-07 summary by discharging the tax liability and had not been put on notice of any demand towards interest or penalty through the statutory summary, the garnishee notice in Form GST DRC-13 seeking recovery of ₹27,26,235 could not be sustained.

The Court accordingly set aside the DRC-13 recovery notice. At the same time, it granted liberty to the department to rectify the Form GST DRC-07 so as to correctly reflect the adjudication order. Upon such rectification, the petitioner would be at liberty to avail the appropriate statutory remedy, including filing an appeal, if so advised. The writ petition was accordingly disposed of.

Case Name: Asianet Digital Network Private Limited Versus The Union of India, New Delhi and 3 others dated 18.06.2026

To read the complete judgement 2026 Taxo.online 1722