Whenever we have a demand from he department we rush to make payment. DRC 03 is the form we use to make the voluntary payment. This may be after a notice and without any notice also. When the time to declare a liability via GSTR 3b is lapsed we can use DRC 03. (The public_profile can be reached at shaifaly.ca@gmail.com)
In many cases it is filed in a hurry without looking into all facts. But this negligence can cost you a lot. Always make sure to enter the year for which the payment is made. Also specify the reason.
In case the year is not entered , the department may refuse it to adjust for that year and may ask to pay again and claim refund for the amount deposited wrongly. Although if that can be substantiated , the benefit will be there.
But yes, litigation cost will be a sunk cost.