Surya Businees Private Limited Vs State of Assam (Gauhati High Court)
In this case, the Gauhati High Court considered a challenge to a show cause notice dated 28.09.2023 issued under Section 73 of the CGST/AGST Act for FY 2017-18 after completion of audit proceedings under Section 65. The audit had concluded with a final audit report dated 17.06.2023, which dropped objections relating to suppression of turnover, unreconciled turnover and short payment of tax after considering the petitioner’s replies, while confirming only interest of Rs. 1,34,580 for delayed payment of tax, which the petitioner paid through DRC-03. The Court observed that “audit” under Section 2(13) covers verification of turnover, taxes paid, refunds and input tax credit, and that Section 65(7) permits proceedings under Sections 73 or 74 only where the audit detects unpaid or short-paid tax, erroneous refund, or wrongly availed or utilised ITC. As the audit had concluded without such findings and both parties agreed that the Section 73 notice was not issued in continuation of the audit, the Court held that the notice for the same period and subject matter was not maintainable. The writ petition was allowed and the show cause notice dated 28.09.2023 was quashed and set aside.
