Acts and Sections Discussed:

1. Maharashtra Goods and Services Tax Act, 2017 (SGST Act)
   • Section 2(13) - Definition of "audit."
   • Section 2(94) - Definition of "registered person."
   • Section 29(3) - Liability post-cancellation of registration.
   • Section 65 - Audit by tax authorities.
2. Goods and Services Tax Rules, 2017 (GST Rules)
   • Rule 101 - Provisions governing audit.

Para-Wise Analysis with Headings

1. Introduction to the Petition

• [Para 1-2]
  • The petitioner challenged notices issued under Section 65 of the SGST Act for an audit for the FY 2020-21.
  • Primary contention: Audit provisions are inapplicable post-registration cancellation.

2. Factual Background

• [Para 3-6]
  • Registration issued on 2 March 2019 and canceled on 2 May 2023 upon closure of business.
  • Audit initiated for FY 2020-21.
  • Petitioner relied on Tvl. Raja Stores v. AC (ST) (Madras High Court) to argue against post-cancellation audits.

3. Issues for Consideration

• [Para 7-9]
  • Key Issue: Whether Section 65 audits apply to persons whose registration has been canceled.

4. Analysis of Relevant Provisions

• [Para 10-15]
  • Defined "registered person" under Section 2(94) to include past registrants.
  • An audit examines historical records, not concurrent compliance, making it relevant even post-deregistration.

5. Legislative Intent of Section 65

• [Para 16-19]
  • Rule 101 emphasizes audit applicability to financial years where registration was active.
  • Section 65 audits are preparatory steps for recovery under Sections 73/74.

6. Submissions and Court’s Observations

• [Para 20-23]
  • Petitioner’s reliance on Tvl. Raja Stores was found misplaced.
  • The Court held that liability persists under Section 29(3), even post-cancellation.

7. Conclusion and Decision

• [Para 24-31]
  • Section 65 audits remain applicable for periods when registration was active.
  • Petition dismissed, affirming the validity of the audit notice and preliminary findings.

Ratio Decidendi

1. Definition of "Registered Person": Includes individuals registered during the period under audit, regardless of subsequent deregistration.
2. Continuing Obligations: Cancellation of registration does not absolve compliance for earlier periods under Section 29(3).
3. Purpose of Audit: Section 65 enables verification of historical compliance, even post-deregistration.

Subjects:

GST Compliance and Audits
SGST Act, GST Audit, Registration Cancellation, Compliance Obligations, Tax Liability, Rule 101.