SVS Aqua Technologies LLP Vs Superintendent (Bombay High Court)
Summary: The Bombay High Court considered a writ petition filed by M/s. SVS Aqua Technologies LLP concerning an audit conducted under Section 65 of the Central Goods and Services Tax Act, 2017. The petitioner contended that, based on the audit findings, the authority had proceeded directly to recovery without any adjudication proceedings under Section 73 or Section 74 of the CGST Act, which the petitioner submitted was impermissible.
The respondents submitted that the impugned communication was, in all probabilities, only an administrative action which would culminate in a show cause notice for adjudication, and that if this was so, nothing would survive for consideration in the writ petition. The Court found substance in this submission. It held that the notice was clearly issued under Rule 101(5) of the Central Goods and Services Tax Rules, 2017, which requires the proper officer, on conclusion of audit, to inform the registered person of the audit findings in accordance with Section 65(6) in FORM GST ADT-02.
The Court further held that the apprehension that recovery would be effected merely on the basis of the audit findings was misconceived. It observed that the GST Department would take further action in accordance with the provisions of the CGST Act. The writ petition was accordingly disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Heard learned counsel for the petitioner.
2. It is the submission of learned counsel that an audit was conducted under Section 65 of the Central Goods and Services Tax Act, 2017 (‘CGST Act’ for short). Based on the audit, without there being any adjudication proceeding either under Section 73 or Section 74 of the CGST Act, the authority has directly proceeded to effect the recovery. This according to learned counsel for the petitioner is impermissible.
3. Mr. Ochani, learned counsel appears and fairly submits that in all probabilities the impugned communication is just an administrative action and the same shall obviously culminate into a show cause notice for adjudication. If that is so, nothing would survive for consideration in the petition.
4. We find substance in the submission of Mr. Ochani as the notice is clearly under Rule 101 (5) of the Central Goods and Services Tax Rules, 2017. Rule 101 (5) reads thus:-
Rule 101 (5).- On conclusion of the audit, the proper officer shall inform the findings of audit to the registered person in accordance with the provisions of sub-section (6) of section 65 in FORM GST ADT-02.
5. We thus find that on conclusion of audit, the proper officer has informed the findings of audit to the registered person in accordance with the provisions of sub-section 6 of Section 65 in Form GST ADT-02. The apprehension of the petitioner that the recovery will be effected on the basis of such information is misconceived. It is obvious that the GST Department shall take further action in accordance with the provisions of the CGST Act.
6. In such view of the matter, the petition is disposed of.
