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2023 (10) TMI 889 - HC - Service TaxService Tax Audit - Post GST era - Power of Officers of the Central Goods and Service Tax Audit to conduct audit as per Section 174 (2) (e) & (f) of the Act of 2017 read with the Act of 1994 - HELD THAT:- W.e.f. 01.07.2017, i.e. the date on which the CGST Act of 2017 came into force, all such powers which were vested upon the authorities in respect to the period prior to 01.07.2017 pertaining to inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication or other legal proceedings etc. were saved as if the Act of 1994 had not been amended or repealed. How the authorities would exercise their powers which were saved in respect to the period prior to 01.07.2017? - HELD THAT:- A perusal of Section 174 (2) (e) of the CGST Act, 2017 shows that the various powers of the authorities were saved including the power to scrutiny and audit. However, the procedure in which the power of audit is to be exercised which is Section 72(A) of the Act of 1994 is not saved - Reference in this regard is made to the observation of the Supreme Court in the case of Vivek Narayan Sharma and Others vs. Union of India and Others, [2023 (1) TMI 337 - SUPREME COURT] wherein at paragraph No.148, the Supreme Court observed that an interpretation which advances the purpose of the Act and which ensures the smooth and harmonious working should be chosen. Now coming into the facts involved in the instant case, it would be seen that for the period from April, 2012 to March, 2015, audit was duly completed. Subsequent thereto, on 17.08.2017, there was initiation of audit for the period from April, 2015 to 30.06.2017 - the provision of Section 73 of the Act of 1994 empowers the Central Excise Officer to issue demand-cum-show cause notice within a period of 30 months from the relevant date and if it falls within the proviso to Sub-Section (1) of Section 73 of the Act of 1994 within 5 years. This power to do so has been saved under Section 174 (2) (e) of the Act of 2017. It is also seen from Section 174 (2) (e) of the Act of 2017 that not only the said power to make recovery is saved, but to carry out investigation, enquiry and verification (including scrutiny and audit) have also been saved. In view of coming into effect the CGST Act of 2017, if any audit is carried out for the purpose of verification or investigation, the same has to be done in terms with Chapter- XIII of the CGST Act of 2017. At the cost of repetition, Chapter-XIII of the CGST Act of 20017 has two Sections, i.e. Section 65 which relates to audit by Tax Authorities and Section 66 which relates to Special audit. The question for interference with the said demand-cum-show cause notice as well as the impugned audit so carried out is devoid of any merit - Petition dismissed.
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