Zodiac Energy543416Tax or GST

Gujarat High Court quashes GST show cause notice and DRC-07 demand order for FY 2018-19

Gujarat High Court quashed the GST show cause notice dated June 30, 2025 and the GST DRC-07 order dated December 24, 2025 for FY 2018-19.

By ScoutQuest · Sat 17 Oct 2026, 5:37 PM IST · 2 min read

The Hon'ble High Court of Gujarat at Ahmedabad, by judgment dated September 29, 2026, quashed and set aside a Show Cause Notice dated June 30, 2025 issued by the Assistant Commissioner of State Tax, Unit-5, Ahmedabad.
It also quashed the consequential order dated December 24, 2025, passed in Form GST DRC-07.
The company received the judgment by email on October 17, 2026.

The GST authorities alleged short payment of GST on composite contracts for the supply and installation of solar power generating systems during FY 2018-19.
The proceedings concerned the application of the 70:30 ratio for the valuation of goods and services, and the alleged consequential short payment of GST, along with interest and penalty.
The High Court held that the ingredients of Section 74 of the applicable GST legislation were not attracted in the circumstances of the case, and quashed the notice and the order.

In the update's own words, "there is no impact on the financial, operational, or other activities of the Company."
The disclosure relates to a past financial year, 2018-19.

A show cause notice is a formal notice asking a company to explain why a tax demand should not be raised against it.
A DRC-07 order is the formal demand order that follows such proceedings.
Both the notice and the demand order have been set aside by the High Court, which means they no longer stand as per this judgment.

The development is a court outcome in the company's favour on a previously disclosed GST dispute.
The company has not indicated any financial, operational or other impact arising from this outcome.

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