LJ- Victoria Properties Private Limited Vs Union of India (Bombay High Court)
The Bombay High Court dismissed the writ petition challenging a GST audit notice issued under Section 65 of the Maharashtra Goods and Services Tax Act, 2017, and the related preliminary audit findings. The petitioner, engaged in rental and leasing of commercial properties, had obtained GST registration in March 2019 and subsequently sought cancellation of registration due to closure of business. The registration was cancelled with effect from 1 April 2023. Thereafter, the authorities initiated audit proceedings for Financial Year 2020-21, a period during which the petitioner was a registered person.
The petitioner contended that Section 65, which authorizes audit of a “registered person,” could not be invoked after cancellation of registration. Reliance was placed on a Madras High Court decision to argue that a person whose registration stood cancelled was outside the scope of Section 65. The respondents, however, argued that the audit related to a period when the petitioner was registered and that cancellation did not extinguish liability for tax or other dues determined before or after cancellation under Section 29(3) of the Act.
The Court examined the definitions of “audit” and “registered person,” along with Sections 29(3) and 65 of the SGST Act and Rule 101 of the GST Rules. It observed that the definition of “registered person” excludes only a person having a Unique Identity Number and does not exclude a person whose registration has subsequently been cancelled. The Court held that, for the purposes of Section 65, the phrase “registered person” includes a person who was registered during the period for which the audit is sought, even if registration was cancelled later.
