Case Note & Summary
The petitioner, Kiran Gems Private Limited, a private limited company, filed a writ petition under Articles 226 and 227 of the Constitution of India before the Bombay High Court seeking quashing of a notice/intimation dated 10.01.2019 issued by the Superintendent, Range-III, CGST, Division IV, Mumbai East. The notice intimated that the petitioner's case had been selected for scrutiny/audit by LAP-XII CERA (GSTA) for the period January 2019 to March 2019 and required submission of information/records for the period 2015-16 to 2017-18 to officers of CERA for audit. The petitioner's primary assertion was that the impugned notice was without jurisdiction as it was issued without invoking any statutory provision under which a special audit could be conducted. The period for which accounts were sought appeared differently in the covering letter and the annexure. The respondents, Union of India and others, contended that CERA audit is conducted under the overall supervision of the Principal Director of Audit, (Central) Kolkata, and that the notice was valid. The court examined the issue of whether the power to conduct CERA audit of a private entity's records requires a specific statutory enabling provision. The court held that the power to audit is a statutory power and must be traceable to a specific provision in the relevant statute. In the absence of any such provision under the Central Goods and Services Tax Act, 2017 or the Finance Act, 1994, the impugned notice was without jurisdiction and suffered from a jurisdictional error. The court quashed and set aside the notice dated 10.01.2019.
Headnote
A) Constitutional Law - Writ Jurisdiction - Articles 226 and 227 of the Constitution of India - Maintainability - Petition filed by a private limited company seeking quashing of a notice/intimation for CERA audit - Court entertained the petition as the notice was issued without any statutory backing, thus suffering from jurisdictional error (Paras 2, 4). B) Taxation - CERA Audit - Central Excise Revenue Audit - Statutory Authority - The power to conduct audit must be traceable to a specific statutory provision - In the absence of any enabling provision under the Central Goods and Services Tax Act, 2017 or the Finance Act, 1994, the notice for CERA audit of a private entity's records for the period 2015-16 to 2017-18 is without jurisdiction - Held that the impugned notice is quashed and set aside (Paras 4, 29).
Issue of Consideration
Whether the impugned notice/intimation issued by the Superintendent, CGST, for CERA audit of the petitioner's accounts for the period 2015-16 to 2017-18 is without jurisdiction for want of any enabling statutory provision.
Final Decision
The impugned notice/intimation dated 10.01.2019 is quashed and set aside. The writ petition is allowed.
Law Points
- Statutory audit power must be traceable to a specific enabling provision
- CERA audit of private entity requires statutory authority
- Audit notice without invoking statutory provision is without jurisdiction
- Articles 226 and 227 of Constitution of India
