2024 (6) TMI 1034 - HC - GST

Madras HC permits Central GST audit if subject differs from State GST, allowing petitioner response to audit notice.

The HC of Madras ruled that Central GST authorities can initiate proceedings under Section 65 of the CGST Act, 2017, provided the audit's subject matter ... Prohibition on initiation of proceedings on same subject matter - Concurrent jurisdiction of Central and State GST authorities - Scope of audit under Section 65 CGST Act - Section 6(2)(b) CGST Act - bar against duplicate proceedingsProhibition on initiation of proceedings on same subject matter - Scope of audit under Section 65 CGST Act - Section 6(2)(b) CGST Act - bar against duplicate proceedings - Whether the Central GST authority is barred by Section 6(2)(b) from issuing an audit notice under Section 65 where State GST proceedings on the same subject matter are pending or concluded - HELD THAT: - The Court examined the impugned audit notice and noted that Section 6(2)(b) prohibits initiation of proceedings by one authority only insofar as they relate to the same subject matter already dealt with by the other. The audit notice itself acknowledged Section 6(2)(b) and expressly stated that there is no restriction to initiate proceedings on any other subject matter by the Central Tax Authority. The Court held that the statutory prohibition applies only if the subsequent proceedings are on the same subject matter as the earlier State proceedings. Accordingly, an audit under Section 65 by the Central authority is not impermissible under Section 6(2)(b) provided the subject matter of the audit is different from that already covered by the State GST proceedings. The Court did not attempt to pre-empt or circumscribe the scope of the audit but left it open for the petitioner to respond to the notice and for the authorities to proceed within the statutory limits. [Paras 6, 7]The petition is disposed of by observing that Section 6(2)(b) bars only duplicate proceedings on the same subject matter; the Central audit may proceed if it concerns a different subject matter, and the petitioner may respond to the audit notice.Final Conclusion: Writ petition disposed of with the observation that Section 6(2)(b) bars duplicate proceedings on the same subject matter; the Central GST audit under Section 65 may proceed if it relates to a different subject matter, and the petitioner is left free to respond to the audit notice; connected miscellaneous petitions closed. The High Court of Madras addressed a challenge to a notice under Section 65 of the CGST Act, 2017. The petitioner argued that Central GST authorities cannot initiate proceedings on the same subject matter as State GST authorities. The court held that as long as the subject matter of the audit is different from the State GST proceedings, Central GST authorities can proceed. The petition was disposed of, allowing the petitioner to respond to the audit notice.