P S K Engineering Construction & Co. Vs Assistant Commissioner of GST & Central Excise
Date: June 9, 2024
Subject Matter
Central Authorities can audit under section 65 if the subject matter differs from that of state GST audit
Summary
The writ petition challenges a notice issued under Section 65 of the CGST Act by the Central GST authorities. The petitioner argues that the State GST authorities have already undertaken comprehensive proceedings for the assessment years 2019-20 to 2022-23, thus the Central authorities should not initiate proceedings on the same subject matter. The counsel representing the Central authorities clarifies that Section 6(2)(b) applies only if the new proceedings pertain to the same subject matter as those initiated by the State authorities. After reviewing the audit notice, it becomes clear that it was issued with consideration of the prohibitions in the CGST Act. The authorities indicate that as long as the audit subject does not overlap with the subject addressed by the State authorities, they can proceed with the audit. Consequently, the court disposes of the writ petition, allowing the petitioner to respond to the audit notice while closing the related miscellaneous petitions without costs.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
A notice under Section 65 of the Central Goods and Services Tax Act, 2017 (the CGST Act), is the subject of challenge in this writ petition.
2. By stating that State GST authorities initiated proceedings against the petitioner in respect of assessment years 2019-20, 2020-21, 2021-22 and 2022-23 and that such proceedings culminated in orders dated 29.02.2024, the present writ petition was filed on the ground that Central GST authorities cannot initiate proceedings in spite of the same subject matter.
3. Learned counsel for the petitioner referred to the show cause notices and orders issued by the State GST authorities and contended that such proceedings were comprehensive and that the Central GST authorities are endeavoring to resurrect the same issues. He further
4. Rajendran Raghavan, learned senior standing counsel, accepts notice for the first respondent and Mr. V.Prashanth Kiran, learned Government Advocate, accepts notice for respondents 2 to 4.
5. Mr. Rejendran Raghavan and Mr. V. Prashanth Kiran pointed out that the prohibition under Section 6(2)(b) of the CGST Act would apply only if the subsequent proceedings by the Central GST authorities are on the same subject matter. At this juncture, they submit that the scope of audit cannot be second-guessed.
6. On perusal of the impugned audit notice, it is clear that such notice was issued while being fully aware of Section 6(2)(b). After extracting the said provision, it is recorded, in relevant part, as under:
“… However, there is no restriction to initiate any proceeding on any other subject matter by Central Tax Authority. Accordingly, this office is intended to conduct audit under the provisions of section 65 of CGST Act as usual.”
7. Provided the subject matter of audit is not the same subject matter as proceedings initiated by the State GST authorities, there is no restriction in the statute. Therefore, subject to the said observation, W.P.No.13418 of 2024 is disposed of by leaving it open to the petitioner to respond to the audit notice. Consequently, W.M.P.Nos.14578 & 14579 of 2024 are closed. No costs.