Penalty Cannot Be Confirmed Beyond What is Specified in Statutory Form GST DRC-01

Last updated: 14 August 2026

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The Allahabad High Court has ruled that a GST penalty cannot be confirmed if the statutory Form GST DRC-01 states '0' penalty, regardless of a detailed show cause notice proposing one. The court emphasised that Rule 142 of the CGST Rules requires full disclosure of tax, interest, and penalty within the DRC-01 form itself. Failure to do so renders the adjudication order invalid and allows the taxpayer to seek rectification of the notice.

Court :
High Court of Judicature at Allahabad

Brief :
The Hon’ble High Court of Judicature at Allahabad in the case of Comfort Battery vs Additional Commissioner Central Goods and Services Tax [Writ Tax No. 2097 of 2026, order dated April 22, 2026] held that penalty demand cannot be confirmed where the statutory Form GST DRC-01 mentioned ‘0’ penalty, even though the annexed detailed show cause notice proposed penalty. The Court held that Rule 142 of the CGST Rules mandates complete disclosure of tax, interest and penalty in Form GST DRC-01 itself, and any ambiguity therein would defeat the statutory right available under Section 74(8) of the CGST Act. Accordingly, the adjudication order confirming penalty was set aside and liberty was granted to the Revenue to rectify the notice and proceed afresh.

Citation :
Writ Tax No. 2097 of 2026, order dated April 22, 2026

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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