Central Authority Cannot Conduct Audit on the Same Subject Matter as State Authority

By: Admin | September 18, 2024 | Categories: Important Pronouncements | 4 Min Read

The Hon’ble Madras High Court, in the case of P S K Engineering Construction & Co. v. Assistant Commissioner of GST & Central Excise [W.P. No. 13418 of 2024, dated June 10, 2024], held that Central GST authorities may initiate proceedings, provided they are on a different subject matter from those initiated by the State GST authorities. The court allowed the Assessee to respond to the audit notice, as long as the audit did not involve the same subject matter as the State GST proceedings.

Facts of the Case:

State GST authorities initiated proceedings against P S K Engineering Construction & Co. (“the Petitioner”) for the assessment years 2019-20 to 2022-23, leading to an order dated February 29, 2024 (“Impugned Order”).

The Petitioner argued that the State GST proceedings were comprehensive and that Central GST authorities were attempting to address the same issues. As a result, the Petitioner filed a writ petition challenging the notices and orders issued by the Central GST authorities.

Issue:

Can the Central Authority conduct an audit after the State Authority on the same subject matter?

Held:

The Madras High Court ruled:The Central GST authority, per Section 6(2)(b) of the CGST Act, has no restrictions on initiating proceedings on a different subject matter.The subject of the audit by the Central Authority was distinct from the proceedings by the State GST authorities. Hence, the court dismissed the writ petition but allowed the Petitioner to respond to the audit notice.

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