Facts of the Case

M/s Shalimar Chemical Works (P) Ltd challenged an audit report dated 24.03.2023 issued by the Commissioner of Commercial Taxes and GST, Cuttack, and the consequential notice issued under Section 65(6) of the Odisha Goods and Services Tax Act, 2017, directing it to discharge statutory liability flagged in the audit, failing which further proceedings could follow.

Issues Involved

  1. Whether a writ petition challenging an audit report and a Section 65(6) notice is maintainable before any final order or assessment is passed.
  2. Whether the petitioner's objections to specific audit observations could be raised before the writ court at this stage.

Petitioner's Arguments

  • Certain objections in the audit report were factually and legally incorrect, and the petitioner should not be held liable for the amounts flagged where it disputed the liability.

Respondent's Arguments

  • The writ petition was premature, since the audit report and Section 65(6) notice were merely a precursor; if a further notice or assessment followed, the petitioner would get a full opportunity to contest the audit objections at that stage.

Court Order / Findings

  • The Court agreed with the department that the challenge was premature, since no final order had been passed and the petitioner had not yet been proceeded against on the basis of any assessment.
  • The petitioner was directed to raise its objections before the assessing authority when the matter reached that stage.
  • The writ petition was dismissed as not maintainable at this stage.

Important Clarification

The order does not decide whether the audit objections were correct or incorrect on merits. It only holds that a writ court will not intervene at the audit/Section 65(6) notice stage before an assessment order is passed. Taxpayers receiving similar audit-based notices under GST should raise their substantive objections during the assessment proceedings rather than filing a premature writ petition.

Sections Involved

  • Odisha Goods and Services Tax Act, 2017 – Section 65(6) (audit findings and consequential action)

Decision – In Favour of

Respondent (Commissioner of Commercial Taxes and GST) – the writ petition was dismissed as premature, without deciding the audit objections on merits.

Case Details

Court: High Court of Orissa at Cuttack
Case Number: W.P.(C) No. 13540 of 2023
Coram: Dr. Justice B.R. Sarangi and Justice M.S. Raman
Date of Order: 4 May 2023

Link to Download the Order

Click here to view/download the full order

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