Facts of the Case

The petitioner, M/s. Bidya Agency, Bolangir, approached the High Court of Orissa at Cuttack challenging a notice dated 18.09.2023 (Annexure-6) issued by the State Tax Officer seeking clarification on discrepancies found during a GST audit. According to the petitioner, this notice was traceable to an earlier notice dated 04.07.2023 and was issued beyond the statutory time limit prescribed under Section 65(4) of the OGST/CGST Act, 2017, which requires an audit report and any related communication to be issued within a fixed period after commencement of audit. The Revenue, represented by the Standing Counsel, submitted that a final audit report had already been passed on the basis of the impugned notice, and that the petitioner ought to pursue the matter before the appropriate departmental authority rather than invoke the writ jurisdiction of the High Court at this preliminary stage.

Issues Involved

  1. Whether a notice seeking clarification on audit discrepancies, issued in continuation of an earlier audit notice, could be challenged in writ jurisdiction on the ground that it was time-barred under Section 65(4) of the OGST/CGST Act.
  2. Whether the writ petition was maintainable at the stage of a preliminary clarification notice, when a final audit report had already followed and a statutory remedy was available.

Petitioner's Arguments

  • The notice dated 18.09.2023 could not be sustained in law as it was issued beyond the statutory time limit provided under Section 65(4) of the OGST/CGST Act.
  • The impugned notice arose out of, and was vitiated by, an invalid earlier notice dated 04.07.2023.

Respondent's Arguments

  • A final audit report had already been passed on the basis of the impugned notice, so the writ petition had, in effect, been overtaken by subsequent proceedings.
  • The petitioner ought to approach the appropriate departmental authority for redressal instead of invoking the writ jurisdiction of the High Court against a clarificatory notice.

Court Order/Findings

  • The notice under challenge sought clarification on discrepancies found during audit and represented only a preliminary stage of the audit process.
  • Since the petitioner had approached the Court against a notice that was only at the preliminary, clarificatory stage, the Court held that the petitioner ought to comply by filing a detailed reply in conformity with the statutory provisions, rather than invoking writ jurisdiction, and declined to entertain the petition.
  • The petitioner was granted liberty to approach the appropriate authority in accordance with law for redressal of the grievance, including the limitation objection under Section 65(4), if so advised.

Important Clarification

Where a GST audit notice or clarification notice is challenged while it is still at a preliminary, pre-adjudication stage, and a statutory reply/objection mechanism exists, High Courts will ordinarily decline to exercise writ jurisdiction under Article 226 and will instead require the taxpayer to raise all objections — including limitation objections under Section 65(4) — before the departmental authority itself.

Sections Involved

  • Section 65, OGST/CGST Act, 2017 — empowers the Commissioner to conduct audit of a registered person's records and prescribes the timelines within which audit findings/reports must be communicated.
  • Section 65(4), OGST/CGST Act, 2017 — fixes the time limit within which the audit must be completed and its findings communicated to the registered person.
  • Article 226, Constitution of India, 1950 — the writ jurisdiction invoked by the petitioner and declined by the Court at this stage.

Decision – In Favour of

This is a procedural disposal, not a merits decision. The Court did not rule on whether the audit notice was time-barred under Section 65(4); it simply declined to entertain the writ at the preliminary clarification stage and left the petitioner free to raise the same limitation objection before the departmental authority. The outcome is neutral — neither the Assessee nor the Department obtained a substantive finding in its favour.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Orissa at Cuttack
  • Case No.: W.P.(C) No. 36669 of 2023
  • CNR: Not available
  • Coram: Acting Chief Justice Dr. B.R. Sarangi and Justice Murahari Sri Raman
  • Decision Date: 15 November 2023
  • Disposal Nature: Disposed of; not entertained at preliminary stage, liberty to approach authority

Link to Download the Order

Download the full judgment (PDF)

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.