Mag Filters And Equipments Private Limited v. Commissioner Of Cgst Audit Gurugram

1.

Petitioner, by way of present writ petition, assails the proceedings initiated by the respondents under Section 65 of the CGST Act, 2017, (hereinafter referred to 'the Act'), for conducting audit. 2.

It is submitted by learned Senior counsel for the petitioner that the impugned notice demands several documents which were already made available while conducting anti-evasion action and notices were issued to the petitioner under Section 73 of the Act, whereafter tax demand from the period 2017-18 up to 2021-22, amounting to Rs.70,35,44,181/- and interest amounting to Rs.43,29,194/- was raised and deposited by the petitioner.

3.

Learned Senior counsel for the petitioner further submits that after the said proceedings had ended, a fresh proceedings under Section 65 of the Act ought not have been initiated, and the same is a cause of great harassment to the petitioners, who are ready to get audit done for the year 2022-23.

4.

Learned Senior counsel for the petitioner has also pointed out that for FY 2018-19, a demand has been raised totalling to Rs.94,86,762/-, which was later on dropped, and an amount of Rs.11,84,867/- was confirmed towards the excess Input Tax Credit (ITC). In view thereto, there was no occasion for the respondents to initiate the audit afresh for the concerned Financial Year 2017-18 to 2021-22.

5.

We have considered the submissions addressed by learned Senior counsel for the petitioner and examined the provisions of Section 65 of the CGST Act of 2017, which provides as under:- "

6.

From the perusal of the aforesaid provision, it is apparent that the Commissioner can conduct the audit at such frequency and in such manner as may be prescribed. There is no embargo on conducting audit of a registered person and there is also no time period prescribed therein. 7.

In the opinion of this Court, the audit is akin to a preliminary inquiry and the Department ought not been prevented from conducting preliminary inquiry relating to the books of accounts of a registered person

and no prejudice can be said to have been caused to the concerned registered person.

8.

We therefore, do not find any reason to interfere with the audit proceedings.

9.

The submission of learned Senior counsel for the petitioner that the respondents have already taken action under Section 73 of the Act, would not be a ground to restrain the authorities from conducting audit, as the audit may result in detection of tax not paid or short paid or erroneously refunded or it may be even otherwise, to the benefit of the concerned registered person. In the event that it is found that the tax has been evaded fraudulently, the power is available to the Department to initiate proceedings under Section 74 of the Act, independent of the proceedings which may have been undertaken under Section 73 of the Act. 10.

In view of the above, we do not find any reason to interfere with the proceedings initiated. The writ petition is accordingly, dismissed. 11.

Pending miscellaneous application(s), if any, shall also stand disposed of.

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