2019 (4) TMI 522 - HC - GST

Jurisdiction - notice issued for Central Excise and Service Tax Audit of its unit for the period from 2013-14 to 2017-18 - Section 174(2)(e) of Central Goods and Services Tax Act, 2017 - Held that - The provision incorporated in the Constitution Act, 2016 as aforesaid, in no manner, restrict the operation of the provisions of Section 174(2) incorporated in CGST Act beyond the period of one year, which provides that repeal of the Acts specified in sub-section (1) of Section 174 and the amendment of the Finance Act, 1994 to the extent mentioned in sub-section (1) or Section 173, as the case may be, shall not amongst others affect an investigation, enquiry or verification (including scrutiny and audit), assessment proceedings, adjudication or other legal proceeding or recovery of arrears etc., and all such proceedings may be instituted, continued or enforced as if the Act had not been so amended or repealed. The impugned notice issued by the Assistant Commissioner, CGST, Audit Circle, Udaipur cannot be said to have been issued acting without jurisdiction - petition dismissed.

Summary

Issues:
1. Legality of notice issued by Assistant Commissioner for Central Excise and Service Tax Audit.
2. Interpretation of Section 174(2)(e) of the Central Goods and Services Tax Act, 2017.
3. Application of Section 19 of the Constitution (ONE HUNDRED AND FIRST AMENDMENT) Act, 2016.

Analysis:
1. The petitioner challenged the legality of a notice issued by the Assistant Commissioner, Audit Circle, Udaipur, regarding the Central Excise and Service Tax Audit of their unit for a specific period. The petitioner contended that the audit functions for the previous period should be under the administration control of C.B.E. & C. as per Section 174(2)(e) of the CGST Act.

2. The Court examined Section 174(2)(e) of the CGST Act and noted that the power for audit functions for the previous period continues to be exercised by C.B.E. & C. over taxpayers previously registered with Central Excise and Service Tax. However, the Court highlighted that the power does not survive after the expiry of one year as per Section 19 of the Constitution (ONE HUNDRED AND FIRST AMENDMENT) Act, 2016.

3. Section 19 of the Constitution Act, 2016, is a transitional provision saving any law relating to tax on goods or services inconsistent with the amended Constitution for a year unless amended or repealed. The Court clarified that this provision does not restrict the operation of Section 174(2) of the CGST Act, which allows for investigations, audits, assessments, and legal proceedings to continue unaffected by amendments or repeals.

4. The Court concluded that the impugned notice for audit issued by the Assistant Commissioner, CGST, Audit Circle, Udaipur was not issued without jurisdiction. The Court dismissed the writ petition, upholding the legality of the notice based on the interpretation of relevant provisions of the CGST Act and the Constitution Act, 2016.