Mag Filter and Equipment Private Limited Vs Commissioner of CGST Audit Gurugram And Others (Punjab and Haryana High Court)
The case Mag Filter and Equipment Private Limited Vs Commissioner of CGST Audit Gurugram pertains to a writ petition filed by the petitioner challenging the audit proceedings initiated under Section 65 of the CGST Act, 2017. The petitioner argued that the audit was unnecessary as earlier anti-evasion actions and notices under Section 73 had resulted in a tax demand of ₹70.35 crore (along with interest), which was already paid. Additionally, a demand for FY 2018-19 amounting to ₹94.86 lakh was later dropped, leaving only ₹11.84 lakh confirmed towards excess ITC. The petitioner contended that the fresh audit for the same period (FY 2017-22) caused undue harassment and was unwarranted since no new tax evasion was alleged.
The Punjab and Haryana High Court, however, dismissed the petition, noting that Section 65 of the CGST Act allows the Commissioner to conduct audits without restrictions on frequency or time. The Court held that an audit is a preliminary inquiry and does not necessarily imply prejudice against the taxpayer. It further stated that prior proceedings under Section 73 do not preclude authorities from initiating audits, which could identify unpaid taxes, erroneous refunds, or even result in findings favorable to the taxpayer. The Court concluded that the Department’s powers under Sections 65 and 74 are independent and valid, dismissing the petition as devoid of merit.
