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2022 (6) TMI 390 - HC - Companies LawAppointment of Cost auditors - whether the first petitioner- Company has not appointed Cost Auditor within the prescribed limits as contemplated under the proviso to Section 148 of the Companies Act? - liability for punishment under Section 148 of the Companies Act - HELD THAT:- Sub-section (2) of Section 148 of the Companies Act, 2013, makes it clear that the Central Government may direct that the audit of cost records of class of companies which are covered under sub-section (1) and which have a net worth of such amount as may be prescribed or a turnover of such amount as may be prescribed, shall be conducted in the manner specified in the order. The amendment of Rule 4(2) of the amended Companies (Cost Records and Audit) Rules, 2014 shows that the aggregate turnover in respect of individual product or products or service or services for which the cost records are required, be maintained under Rule 3, is Rs.35 crore or more, in respect of item (B) of Rule 3. Therefore, the said Rule makes it clear that as far as the production is concerned, if the turnover is below Rs.35 crore, the cost audit is not required - In the present case, the statements filed for the financial year 2014-2018 attached in the typed set of papers, which have not been disputed by the respondent, clearly show that the turnover is below Rs.35 crore. This Court is of the view that the very initiation of the prosecution itself is against the amended Rules - Petition allowed.
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