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2023 (12) TMI 1166 - ANDHRA PRADESH HIGH COURTValidity of show cause notice (SCN) u/s 73 - demand based on improper Audit Report u/s 65(3) - Violation of principles of natural justice - petitioner had no ‘not less than 15 working days’ of statutory period to file the response to the SCN for Audit u/s 65 - HELD THAT:- Section 65 (3) of Andhra Pradesh Goods and Services Tax Act, 2017 clearly provides that the registered person shall be informed by way of a notice not less than fifteen working days prior to the conduct of audit in such manner as may be prescribed - Rule 101 (4) of the Rules, 2017, thus also provides that the proper officer may inform the registered person of the discrepancies noticed, if any, as observed in the audit and the said person may file his reply and the proper officer shall finalise the findings of the audit, after due consideration of the reply furnished. In the present case, the notice does not comply with sub-section (3) inasmuch as there is no clear ‘not less than 15 working days’ time prior to the conduct of audit. The audit has been finalized on 29.09.2023 based on the revised notice, which notice though revised on 04.09.2023 itself, but was uploaded on 14.09.2023. As such the registered dealer had the information of the notice on 14.09.2023 - From that date upto 29.09.2023, there are no clear 15 working days. The findings have been finalized by the Audit Officer within the statutory notice period, without waiting for completion of the statutory notice period. The petitioner’s reply is dated 28.09.2023, which though reached on 03.10.2023, was submitted within the statutory period, and even it be taken that it could not reach in time, as it was sent on 28.09.2023, the audit could not be finalized and the audit report could not be submitted on 29.09.2023. In the present case, what is found from perusal of the show cause notice under Section 73, is that there is a reference of the Audit Report dated 29.09.2023, and therefore, it cannot be said that in the present case the show cause notice is independent of the audit report. It is based on the audit report, which in turn is not in accordance with the statutory provisions but is in violation of the principles of natural justice as also the due procedure of law. The impugned show cause notice under Section 73 of the Act is set aside - respondent authorities/competent authorities are directed to pass fresh order/report on the audit, after taking into consideration the petitioner’s reply dated 28.09.2023 received on 03.10.2023 and consequent there upon to proceed further in accordance with law - petition allowed in part.
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