The audit provisions under Section 65 of the SGST Act apply to individuals who were registered during the audit period, even if their registration is cancelled thereafter.

JUDGMENT :

(Per Jitendra Jain J):-

1. Rule. By consent of the parties taken on production board and heard finally since only legal issue is involved.

2. By this petition under Article 226 of the Constitution of India, the petitioner seeks to challenge the notice dated 21 August 2024 issued under Section 65 of the Maharashtra Goods and Services Tax Act, 2017 (“SGST Act”) in Form No. GST ADT-01 read with Rule 101 of the Goods and Services Tax Rules, 2017 (GST Rules) by which the respondents seek to conduct an audit for the financial year 2020-21. Consequently, the petitioner also aims to challenge the preliminary audit findings dated 11 October 2024.

Brief facts :-

3. The petitioner was engaged in the rental and leasing services of commercial properties and other ancillary activities relating to the same.

4. On 2 March 2019, the petitioner was issued a registration certificate under the Central Goods and Services Tax Act, 2017 (CGST Act). After conducting business since then, on 27 March 2023, the petitioner applied for cancellation of its CGST registration on the ground that they have ceased to be liable to pay tax on account of the closure of business. On 2 May 2023, the respondents passed the order for cancellation of registration, and the registration was cancelled on 1 April 2023.

5. On 6 November 2023, the respondents issued notice for conducting an audit for the period April 2021 to April 2022, although in reference, it is stated as 2020-21. The said notice was replied by the petitioner on 11 November 2023 wherein the petitioner relying upon the decision of the Madras High Court in the case of ‘Tvl. Raja Stores Vs. Assistant Commissioner (ST)’, (2023) 153 taxmann.com 657 (Madras) submitted that since the petitioner's registration is cancelled, an audit under Section 65 of the Act cannot be conducted. However, on 21 November 2023, the respondents issued the requisition calling for various documents from the petitioner. The respondents rejected the aforesaid objection of the petitioner and stated in their e-mail dated 9 August 2024 that they would proceed with the audit and requested the petitioner to keep the required documents ready for inspection.

6. On 21 August 2024, another notice for conducting audit for the financial year 2020-21 was issued by the respondents to the petitioner. It is against this backdrop that the petitioner has filed the present petition to challenge Exhibit-A and Exhibit-B to the petition, which is the notice for conducting an audit for the financial year 2020- 21 dated 21 August 2024 and the preliminary audit findings report dated 11 October 2024 for the said financial year.

Submissions of the Petitioner:-

7. Mr. Raichandani, learned counsel for the petitioner, submitted that since the petitioner’s registration has been cancelled vide order dated 2 May 2023 and in the said order, it is stated explicitly that no amount is payable by the petitioner, provisions of Section 65 of the SGST Act which deals with audit would not be applicable. It is his submission that the provisions of Section 65 of the SGST Act would apply only to a registered person and not to a person whose registration has been cancelled. He further submits that since there is no tax due determined before or after the date of cancellation, provisions of Section 29(3) of the SGST Act would also not be applicable. Mr. Raichandani, in support of his submission, relied upon the decision of the Madras High Court in the case of ‘Tvl. Raja Stores’ (supra). We may note that no other submissions have been canvased, although, in the petition, various grounds are raised, including on merits.

Submissions of the Respondents :-

8. Mr. Takke, learned AGP for respondents nos.2 and 3, submitted that the audit is proposed to be conducted for the period when the petitioner was a registered person and, therefore, the authority has exercised its jurisdiction correctly in accordance with the provisions of Section 65 of the SGST Act. It is his submission that even if