HC Restrains State Audit as Central GST Audit Already Finalised

Case Details: Niraj Kumar Jaiswal vs. Deputy Commissioner of State Tax, Bureau of Investigation (S.B.)/H.Q. - [2025] 175 taxmann.com 466 (Calcutta)

Judiciary and Counsel Details

• Raja Basu Chowdhury, J.
• Vinay Shraff, Ms P.S. Paul & D.K. Agarwal for the Appellant.
• Anirban Ray, Ld. GP, Md. T.M.Siddiqui, Tanoy Chakraborty & D. Sahu, Advs. for the Respondent.

Facts of the Case

The petitioner, a registered person under the GST Act, filed a writ petition challenging the initiation of audit proceedings by the State tax authorities under Section 65. The petitioner submitted that the Central Goods and Services Tax authorities had already conducted an audit for the same period and had issued a final audit report in Form GST ADT-02. The said report acknowledged that the petitioner had discharged his tax liability along with interest and penalty. Despite being informed of this final report by a letter, the State authorities issued a fresh communication calling upon the petitioner to appear before them for the same period. The petitioner contended that initiation of parallel proceedings by different authorities for the same period was legally unsustainable.

High Court Held

The Calcutta High Court examined the submissions made by both parties and reviewed the documents placed on record. The Court noted that the final audit report issued under Section 65 of the CGST Act clearly recorded that the petitioner had paid the applicable tax, interest and penalty. In view of the finality of the central authority’s audit, the Court held that the State tax authorities could not initiate or continue proceedings for the same tax period. Accordingly, the Court passed an interim order restraining the State authorities from proceeding further on the basis of their communication, until the final disposal of the writ petition or until further orders, whichever is earlier. The interim relief was granted in favour of the petitioner.