2025 (7) TMI 467 - HC - GST

Challenge to impugned Audit Report along with the ADT-04 notice - permissibility of special audit as per Section 66 of Central Goods and Services Tax Act 2017 - HELD THAT - Considering the fact that this is a special audit under Section 66 of the Central Goods and Service Tax Act 2017 the Petitioner prays that the Petitioner may be given an opportunity of being heard after filing of a reply in respect of the special Audit Report. This would be in consonance with the scheme of Section 66 of the CGST Act. Though the Petitioner has missed the deadline for filing the reply considering the quantum of demand being raised it is deemed appropriate to permit the Petitioner to withdraw the present petition with liberty to the Petitioner for filing of a reply and an opportunity of being heard. The present petition is dismissed as withdrawn with liberty as aforesaid - Let the reply be filed to the Audit report within 10 days from now. After the filing of reply a hearing shall be granted and the GST Department shall proceed in accordance with law.

Summary

The Delhi High Court, presided by Justices Prathiba M. Singh and Rajneesh Kumar Gupta, addressed W.P.(C) 8967/2025 filed by HYT Engineering Company Pvt. Ltd. under Article 226 of the Constitution, challenging the Audit Report dated 21st April 2025 and the subsequent ADT-04 notice dated 16th June 2025 demanding Rs. 84,67,96,589.25. The special audit was conducted under Section 66 of the Central Goods and Services Tax Act, 2017 (CGST Act). The Petitioner failed to file a reply within the stipulated seven-day period after the Audit Report was communicated on 20th May 2025. Noting the Petitioner's missed deadline, the Court emphasized that under Section 66 CGST Act, the Petitioner must be afforded an opportunity to be heard. Despite the delay, considering the substantial demand, the Court allowed the Petitioner to withdraw the petition with liberty to file a reply within 10 days. The Court held that after the reply is filed, a hearing will be granted and the GST Department shall proceed "in accordance with law." The petition was accordingly dismissed as withdrawn with liberty for further proceedings.