Facts of the Case

The petitioner, Shalimar Chemical Works (P) Ltd., challenged an audit report dated 18 April 2023 and a consequent notice issued under Section 65(6) of the OGST Act, 2017, which directed it to discharge certain statutory liabilities flagged in the audit, failing which further proceedings would be initiated. The petitioner objected to certain specific findings in the audit report, contending it was not liable to be charged in respect of those particular objections, and sought to have the audit report and notice quashed before any actual demand order had been passed.

Issues Involved

  1. Whether a writ petition challenging an audit report and a Section 65(6) notice — issued before any formal demand or assessment order — was maintainable, or premature.

Petitioner's Arguments

  • Certain specific objections raised in the audit report were factually or legally incorrect, and the petitioner was not liable to be charged to the extent of those specific items.

Respondent's Arguments

  • The writ petition was wholly premature, since if any notice was ultimately issued on the basis of the audit report, the petitioner would then get a full opportunity to contest the correctness of the audit objections at that stage.

Court Order / Findings

  • The Court held that the petitioner had not come to court against any actual order passed by the assessing authority — only against the audit report itself and the Section 65(6) notice calling for compliance.
  • It found that the petitioner would get a proper opportunity to raise its objections before the assessing authority in the assessment proceeding to follow, and that challenging the audit report at this stage was premature.
  • The writ petition was dismissed as not maintainable at this stage, leaving the petitioner free to raise its objections when the assessment proceeding is initiated.

Important Clarification

This order does not decide whether the audit objections raised against Shalimar Chemical Works were correct — it only holds that a writ petition is not the appropriate stage to contest an audit report before any demand notice or assessment order has actually been passed. GST taxpayers facing an adverse audit report under Section 65 should preserve their objections for the assessment stage rather than approaching the High Court prematurely.

Sections Involved

  • Odisha Goods and Services Tax Act, 2017 — Section 65(6)

Decision – In Favour of

Decided against the petitioner on maintainability grounds; the writ petition was dismissed as premature, with the substantive audit objections left open to be raised at the assessment stage.

Case Details

Court: High Court of Orissa at Cuttack
Case No.: W.P.(C) No. 15894 of 2023
Coram: Dr. Justice B.R. Sarangi & Mr. Justice M.S. Raman
Date of Order: 18 May 2023

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