The Delhi High Court has set aside a GST special audit communication in Form ADT-03 and a DRC-01 issued for the FY 2018-19 after the department considered that no order u/s 73 of the Central Goods and Services Tax (CGST) Act had been passed by the deadline of 30 April 2024.
A writ petition has been submitted by Koenig Solutions Private Limited. It contested the communication dated 24 August 2023 issued in Form GST ADT-03 for conducting a special audit for the financial year 2018-19. The applicant said that the special audit communication had been issued in breach of Section 66 of the Central Goods and Services Tax Act, 2017, and the Delhi Goods and Services Tax Act, 2017, along with Rule 102 of the corresponding rules.
It contested DRC-01 dated 1 August 2024. The applicant mentioned that the document was not signed and had been issued without a proper SCN u/s 73. The applicant questioned an undated and unverified two-page special audit report that had been forwarded via a covering letter dated 6 December 2023.
The counsel for the applicant at the hearing focused on the limitation period for passing an adjudication order under Section 73. They claimed that Notification No. 56/2023 authorised the competent authority to pass the order merely up to 30 April 2024.
They said that no order had been passed within that period and that the proceedings could not persist after the statutory deadline had lapsed.
Also Read: Easy Guide to Audit Provisions Under GST with Procedure
Directions are sought by the department’s counsel from the authorities. She did not object to the factual position placed before the Court and considered that the competent authority had not passed any order before 30 April 2024.
The Division Bench, consisting of Justice Anil Kshetrapal and Justice Shail Jain, noted that the department’s admission made it clear that the timeframe for issuing the order had expired.
Since no adjudication order was passed within the extended period, the court ruled that the challenged proceedings could not be upheld. Consequently, the court set aside the communication dated August 24, 2023, which was issued in Form GST ADT-03 for conducting a special audit for the FY 2018-19.
For the same reason, the court also set aside Form DRC-01, dated August 1, 2024. The writ petition was granted based on the GST authority’s acknowledged failure to issue the Section 73 order within the required timeframe.
| Case Title | M/s Koenig Solutions Pvt Ltd Vs Assistant Commissioner Audit Branch |
| Case No. | W.P.(C) 11410/2024 |
| For Petitioner | Dr J.K. Mittal, Mr Harshvardhan Tyagi |
| For Respondent | Mr Sumit K. Batra, Ms Priyanka Jindal |
| Delhi High Court | Read Order |
