10.07.2024: CGST Authorities can conduct audit u/s 65, provided subject matter different than what the State GST authorities have addressed: Madras High Court

The Madras High Court in the case of M/S. PSK ENGINEERING CONSTRUCTION & CO. VERSUS THE ASSISTANT COMMISSIONER OF GST & CENTRAL EXCISE AUDIT CIRCLE, SALEM vide W. P. No. 13418 of 2024 and W. M. P. Nos. 14578 & 14579 of 2024 dated 10.06.2024has permitted the Central GST authorities to conduct an audit under Section 65 of the CGST Act, provided it is on a different subject matter than what the State GST authorities have already addressed.

Facts of the Case:- In this case, the State GST authorities conducted proceedings against the petitioner for the assessment years 2019-20, 2020-21, 2021-22, and 2022-23. These proceedings resulted in orders dated 29.02.2024. The petitioner claims that the Central GST authorities are attempting to address the same issues, which is not permissible under the CGST Act. 

The Petitioner contends that the State GST authorities' proceedings were comprehensive. However, The Central GST authorities are allegedly trying to resurrect the same issues already settled by the State GST authorities. This action is argued to be impermissible under Section 6(2)(b) of the CGST Act. 

On the other hand, the respondent department argued that Section 6(2)(b) of the CGST Act prohibits subsequent proceedings by Central GST authorities only if the subject matter is the same. Also, the scope of the audit cannot be presumed to be the same without proper examination.

Held that :-  The Court acknowledged Section 6(2)(b) and states there is no restriction on initiating proceedings on other subject matters. The Central GST authorities intend to conduct an audit under Section 65 of the CGST Act.

The court concluded that, as long as the subject matter of the Central GST audit is different from that of the State GST proceedings, there is no statutory restriction. The petitioner is allowed to respond to the audit notice. The present petition is disposed of with these observations.

To read the complete judgment 2024 Taxo.online 1231

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